UT Foundation Policies

Overview

Pursuant to Article VIII (Conflicts of Interest) of the University of Tennessee Foundation (UTFI) Bylaws, pursuant to Article IV, Paragraph 5 of the “Affiliation and Services Agreement between The University of Tennessee and The University of Tennessee Foundation, Inc.,” and in light of its mission and responsibility to operate in an open and transparent manner, the UTFI Board of Directors establishes the following Ethics and Responsibility Policy.

To effectively carry out its mission of supporting the educational, research, and public service activities of the University of Tennessee through fundraising, it is essential that the activities of UTFI be accomplished with unquestioned credibility.

Gratuities and Gifts

No director, officer or staff member of UTFI shall accept or give any gift or gratuity that is offered, or reasonably appears to be offered, because of the individual’s position with UTFI. Any potential violations should be reported to the chair of the UTFI Audit Committee (the committee) and will be considered as outlined below in Section II.B.4.

Conflicts of Interest

The purpose of this section of the policy is to provide guidelines to help the UTFI Board and President maintain objectivity and integrity in situations that may involve a conflict of interest. Board members and the President are expected to take all reasonable precautions to ensure that their outside financial interests do not place them in conflict with carrying out their responsibilities.

Definitions

• Interested Person: Any UTFI board member, whether elected, ex officio, voting or non- voting, who has a direct or indirect financial interest, as defined below, is an “interested person” for purposes of this policy.
• Financial Interest: A person has a financial interest if the person has, directly or indirectly through business, investment, or family one or more of the following:
  • An ownership or investment, except those held in a mutual fund, in any entity with which the foundation has a transaction or arrangement,
  • A compensation arrangement with the foundation or with any entity or individual with which the foundation has a transaction or arrangement, or
  • A potential ownership or investment interest, except for those held in a mutual fund in, or compensation arrangement with, any entity or individual with which UTFI is negotiating a transaction or arrangement.
• Family: Family includes all immediate family, including children and their spouses who no longer reside with interested person.
• Compensation: Compensation includes all direct and indirect remuneration and includes gifts or favors that are substantial in nature.
  • As a guide, substantial in nature would include ownership, either legally or equitably, in excess of 5% or $100,000, in face value of the stock of a publicly or privately-held corporation or business interest, except for those held in a mutual fund.

Procedures

• Duty to Disclose: An interested person must disclose the existence of any financial interest to the committee should he or she perceive the financial interest constitutes a conflict of interest.
  • The UTFI President or Executive Vice President and Chief Operating Officer (COO) shall report any financial interests held by UTFI employees to the committee.
• Determining Whether a Conflict of Interest Exists: The committee shall convene in accordance with UTFI Bylaws and its charter to review all financial interest disclosures.
  • After discussion with the interested person and consideration of any other relevant material, the committee shall convene in executive session, with only committee members present, to determine if a conflict of interest exists.
  • If the interested person is a member of the committee, he or she shall not participate in the executive session.
  • Nothing in this section shall preclude the committee from meeting by conference call, where deemed appropriate.
• Procedures for Addressing the Conflict of Interest:
  • A conflict of interest shall not necessarily invalidate any transaction or arrangement entered into as a result of a bid process whereby at least three bids are received and the winning bid is determined by a person who does not have a financial interest.
  • The President or Chairman of the board shall, if appropriate, appoint a disinterested person or committee to investigate alternatives to the proposed transaction or arrangement.
  • After exercising due diligence, the committee shall determine whether UTFI can obtain a more advantageous transaction or arrangement with reasonable efforts from a person or entity that would not give rise to a conflict of interest.
  • If a more advantageous transaction or arrangement is not reasonably attainable under circumstances that would not give rise to a conflict of interest, the UTFI audit committee shall determine by a majority vote of the disinterested committee members whether the transaction or arrangement is in UTFI’s best interests and for its own benefit and whether the transaction is fair and reasonable and shall make its decision as to whether to enter into the transaction or arrangement in conformity with such determination.
• Failure to Disclose: If a UTFI board member or the UTFI President has reasonable cause to believe that an interested person has failed to disclose actual or possible conflicts of interest, he/she shall inform the committee chair. The committee chair shall inform the interested person of the allegations and afford the interested person an opportunity to explain the alleged failure to disclose to the committee.
  • If, after hearing the response of the interested person and making such further investigation as may be warranted in the circumstances, the audit committee determines that the interested person has in fact failed to disclose an actual or possible conflict of interest, it shall take appropriate disciplinary and corrective action.
  • Notwithstanding any other provision in the UTFI bylaws to the contrary, by a two-thirds (2/3) vote of its elected directors, the UTFI board may remove any member of the UTFI board for a material violation of the Ethics and Responsibility Policy.
    • A vote to remove a member shall only be taken after the accused member has been afforded a due process contested case hearing in accordance with the Tennessee Uniform Administrative Procedures Act, compiled in Tennessee Code Annotated title 5 chapter 4 and a finding has been made that the member did violate UTFI’s Ethics and Responsibility Policy.
    • If a member is removed in accordance with this subsection, such position shall be considered vacant and the vacancy shall be filled as provided for in the bylaws.
• Records of Proceedings
  • The minutes of any committee and board meeting(s) held pursuant to section II (B)(4) of this policy shall contain the names of the persons who disclosed or otherwise were found to have a financial interest in connection with an actual or possible conflict of interest; the nature of the financial interest; any action taken to determine whether a conflict of interest was present; and, the committee’s or board’s decision as to whether a material violation in fact existed.
  • The minutes of all committee meetings held pursuant to sections II (B)(2) or II (B)(3) of this policy shall disclose the names of the persons who were present for discussions and votes relating to the transaction or arrangement; the content of the discussion, including any alternatives to the proposed transaction or arrangement; and, a record of any votes taken in connection therewith.

Annual Statements

Each UTFI board member and officer shall receive a copy of this Ethics and Responsibility Policy, shall certify that she or he has read and understands the policy, and agrees to comply with the policy by executing an assent form annually. All new board members will be provided with a list of those firms with whom UTFI is doing business at the time the member joins the board.

EFFECTIVE: 11/19/2010 · REVISED: 10/19/2022

Organization

The Nominating and Governance Committee is a standing committee of the board established pursuant to Article VI (Committees of the Board), Paragraph 2 (Other Standing Committees), of the Foundation’s bylaws and shall operate pursuant to the bylaws.

Roles and Responsibilities

The Committee shall oversee:

Nominations
Assess the composition of the board and evaluate and propose candidates for service as directors and officers. In fulfilling this role the committee shall, among other responsibilities:

• Assess the ideal composition of the board and regularly review the board profile to assess its changing needs and its capacity for effective
• Evaluate and present nominations for new elected directors at the annual
• Evaluate and present nominations for directors to be re-elected at the annual
• Evaluate and present nominations for Foundation officers at the annual
• Develop and regularly re-evaluate a set of qualifications and core competencies for membership on the
• Review an orientation program for all new directors and a continuing education process for all
• Review a self-evaluation process for the board to be conducted annually.

Governance and Best Practices

• Review matters relating to the governance of the Foundation, including reviewing and making recommendations to the board for proposed changes to the policies and procedures of the board and proposed changes to the bylaws and committee charters. In fulfilling this role the committee shall, among other responsibilities:

• Review the bylaws every year, recommending amendments as
• Review board policies & procedures every year, ensuring that they reflect best practices on the role of affiliated foundation directors as well as on board philosophy and practice, recommending changes as
• Review Board committee structure and committee charters every year, recommending changes as
• Stay informed about governance issues and propose implementation of governance best practices as appropriate.

EFFECTIVE: 1/5/2011 · REVISED: 3/5/2024

Purpose

The Executive Committee (the committee) exercises the power and authority of The University of Tennessee Foundation, Inc. (UTFI) Board of Directors (Board) between regular Board meetings and when timing is critical.  The committee also provides oversight and coordination for the work of other board committees and functions as both the compensation and investment committees of the Board.

Organization

The Executive Committee is a standing committee of the board established pursuant to Article VI (Committees of the Board), Section 1 (Executive Committee), of the Foundation’s bylaws and shall operate pursuant to the UTFI bylaws.

Roles and Responsibilities

The Executive Committee shall:

Between Meetings of the Board
Pursuant to Article VI, Section 1 of the bylaws, the committee may exercise all the powers of the Board between meetings, except:

• The committee shall not have the authority to elect, appoint, or remove Directors or officers; to amend the Bylaws or the Charter,
• The committee shall not have the power to dissolve the Foundation or sell all or substantially all of its assets, and
• The committee’s power shall be limited to making commitments on behalf of the Foundation which do not exceed five million dollars ($5,000,000.00).

The committee shall report to the Board at the next regularly scheduled meeting all decisions made.

Compensation
Pursuant to Article VI, Section 1 of the bylaws, the committee shall oversee compensation of UTFI employees (except the President and CEO) and recommend to the Board the UTFI incentive compensation plans and any new UTFI benefit programs.

The compensation of the UTFI President is originally set by the University of Tennessee Board of Trustees at the recommendation of the UT President, as set forth in Article II, paragraph 1(a) of the Affiliation and Services Agreement between The University of Tennessee and The University of Tennessee Foundation, Inc.  UTFI Board leadership shall consult with the President of the UT System as he conducts the annual performance review of the UT Vice President for Development and Alumni Affairs/UTFI President and CEO.

Investment

Until such time as an Investment Committee is created pursuant to Article II, Section 3(a) of the Affiliation and Services Agreement between UT and UTFI, the committee shall recommend to the Board to participate in the University’s Consolidated Investment Pool (CIP) for endowments and accept the CIP’s asset allocation, disbursement, and spending policies, all of which adhere to federal and state laws including the Uniform Prudent Management of Institutional Funds Act.

Other Responsibilities
The committee shall also:

• Coordinate the work of all Board committees.
• Promote good communication among standing committees.
• Serve as liaison between UTFI and any fundraising foundations deemed affiliated by the UT Board of Trustees.
• Serve as liaison between UTFI and key volunteer groups.
• Undertake special projects in furtherance of the purposes of the Foundation which the Board may specifically commit to the committee.
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EFFECTIVE: 6/19/2012 · REVISED: 6/19/2012

Purpose

The Real Estate Committee oversees The University of Tennessee Foundation’s real estate holdings and operations.

Organization

The Real Estate Committee is a standing committee of the board established pursuant to Article VI (Committees of the Board), Paragraph 2 (Other Standing Committees), of the Foundation’s bylaws and shall operate pursuant to the bylaws.

Roles and Responsibilities

The Real Estate Committee shall:

Real Estate Gift Acceptance
The Real Estate Committee shall exercise oversight of UTFI’s Real Estate Gift Acceptance Policy 6.4 and its execution. In fulfilling this role the committee shall, among other responsibilities:

• Receive reports from the UTFI President & CEO of any gifts of real estate which he or she has accepted pursuant to Real Estate Gift Acceptance Policy 6.4.4.
• Evaluate and determine whether or not to accept proffered gifts of real estate pursuant to Real Estate gift Acceptance Policies:
  • 6.4.5 (offers referred to the committee by the President & CEO),
  • 6.4.11 (offers of mortgaged property),
  • 6.4.12 (offers of commercial property subject to lease)
  • 6.4.16 (offers of real estate to fund gift annuities)
• Carry out all other duties outlined in the Real Estate Gift Acceptance Policy 6.4.

Disposition of Real Estate
The Real Estate Committee shall exercise oversight of UTFI’s Fiscal Policy 5.20 governing disposition of real estate owned by UTFI. In fulfilling this role the committee shall, among other responsibilities:

• Receive reports from the UTFI President & CEO of any contracts for the sale or disposition of real estate which he or she has approved pursuant to Fiscal Policy 5.20.5(1).
• Evaluate and determine whether or not to approve contracts for the sale or disposition of real estate pursuant to Fiscal Policy 5.20.2(2).

Other Oversight and Reporting Functions
In exercising its oversight function, the Real Estate Committee shall:

• Report on all real estate transactions (gifts accepted, real estate purchased, real estate sold or otherwise disposed of) at each regular Board of Directors meeting.
• Regularly review and assess UTFI’s portfolio of real estate holdings.

EFFECTIVE: 7/18/2012 · REVISED: 7/18/2012

Introduction

The Board of Directors (Board) of The University of Tennessee Foundation, Inc. (UTFI) recognizes that foundations provide opportunities to engage alumni and friends with the institution in a meaningful role. That engagement often leads to greater interest, involvement and, ultimately, financial support. Providing opportunities for engagement is particularly important at the campus level where the involvement and engagement of local leaders can have a critical impact on support of the campus. With this in mind, the Board adopts this policy on UTFI affiliated foundations (affiliates).

University of Chattanooga Foundations

Because of its unique history and structure, this policy does not apply to the University of Chattanooga Foundation (UCF). The relationship between UTFI and UCF is governed by a separate Affiliation and Services Agreement.

Establishing Affiliates

No affiliate shall be established without a thorough, public review that includes the following:

• The chancellor of any campus desiring to establish an affiliate should make a formal request to the UT President.
  • At a minimum the request should set forth
    • The rationale for establishing the affiliate, and
    • Any other material the Chancellor deems appropriate.
  • Affiliates may be established only at the campus level. Colleges, departments or other organizational units are not eligible to establish affiliates.
• If the UT President supports the request, he/she will:
  • Submit the request to the UTFI Board, and
  • Inform the UT Board of Trustees Advancement Committee.
• On receipt of a request from the UT President:
• The UTFI Board shall undertake such investigation and analysis as it deems appropriate before acting on the request.
• Once approved by the UTFI Board, the UTFI Executive Vice President & Chief Operating Officer, working with UTFI counsel, shall create and file the necessary legal paperwork enabling UTFI to do business under the affiliate’s name.

Relationship Between UTFI and Affiliates

The University of Tennessee (UT) has contracted with UTFI for UTFI to provide UT with fundraising services. Accordingly, affiliates will not be separately incorporated organizations. Rather, UTFI will file paperwork with the Tennessee Department of State and appropriate local governments to do business under the proposed name of the affiliate (e.g., “The University of Tennessee Health Science Center Foundation”).

• UTFI will be the sole non-profit, tax-exempt corporate entity.
• UTFI will provide the affiliate with fundraising expertise, staffing and all related services.
  • UTFI will hire, through the Employee Services Agreement with UT (ESA), and manage all current and future fundraising staff.
  • UTFI will provide back office services including, but not limited to:
    • Business (e.g., accounts payable, budgeting, contracting and fiscal policy administration),
    • Communications (e.g., graphic design and publications)
    • Finance (e.g., accounting and audit services, bank and brokerage accounts, financial reporting and insurance),
    • Gift Acceptance & Management (e.g., creating, maintaining, implementing and administering policies)
    • Human Resources (e.g., liaison with UT HR under the ESA, compensation and human resources policy administration),
    • Information technology (e.g., alumni-development database, financial system, liaison with UT OIT).
• The affiliate will serve as the philanthropic arm of the local campus.
• UTFI will own all assets.
  • UTFI will hold, invest and manage gifts received through the affiliate for the benefit of the affiliate and its local campus as designated by the donors.
    • UTFI will hold and manage the affiliate’s current and plant funds in accordance with UTFI fiscal policy.
    • UTFI will invest the affiliate’s endowed funds in UT’s consolidated investment pool.
  • UTFI will account for gifts received through the affiliate separately and apart from other funds held by UTFI.
  • UTFI will provide the affiliate with regular financial reports, including quarterly and annual financial statements.
  • UTFI will collect all approved revenues (e.g., the endowment management fee, interest income on non-endowed gifts, alumni marketing revenue) on all available funds, including affiliate funds, in order to grow the fundraising staff in accordance with the Affiliation and Services Agreement between UT and UTFI.
• The affiliate will be governed by an organizational policy, approved by the UTFI board, that will include the following provisions:
  • Establish the affiliate’s board of directors, including the number of directors, ex officio directors (e.g., the campus chancellor), officers, the nomination process, terms, term limits, and such other provisions as may be appropriate.
    • The affiliate’s board of directors will include two voting directors who are UTFI Board members appointed by the UTFI Board.
    • Affiliate board of director nominations shall be ratified by the UTFI Board before the nominations become effective.
  • The affiliate’s board of directors may nominate individuals from its board, in consultation with the UT President and UTFI chair, to serve, ex officio, as voting members on the following :
    • A minimum of one position on the UT Investment Advisory Committee (subject to possible changes in the UT Board of Trustees Investment Advisory Committee policy), and
    • A minimum of two positions on the UTFI Board of Directors.
  • Any proposed amendments to the organizational policy must be submitted to the UTFI Board, which must approve before the amendments become effective.

Role of the Affiliated Foundation Board of Directors

• The primary role of the affiliate’s board of directors is to support the fundraising initiatives of the affiliated foundation campus in the following ways:
  • Through the example of each director’s personal giving,
  • Encouragement of others to support the campus, and
  • Serving as stewards of the funds given for the benefit of the campus.
• The campus chancellor and vice chancellor for development & alumni affairs, in consultation with the affiliate’s board chair, have the responsibility for developing the appropriate role for the affiliate’s board of directors on the campus. In order to maximize the benefit of the affiliated foundation, the campus should provide meaningful opportunities for the affiliate’s directors to be engaged with the campus. Potential opportunities to enhance the affiliate board’s experience include consulting with the affiliate’s directors on:
  • Campus master and strategic plans,
  • Fundraising initiatives, staffing plans and goals,
  • Outreach efforts to the local community and/or campus alumni,
  • Campus Legislative priorities, and
  • Campus branding and communications strategies.

Mission Statement

The UT Foundation enriches the lives of University of Tennessee students, faculty, staff and alumni through private gift support and alumni engagement.

Role of the University of Tennessee Foundation, Inc. Board

The University of Tennessee Foundation, Inc. Board serves as the fiduciary and corporate board to administer the university’s fundraising and alumni programs. The Board assists in raising support publicly, politically and financially for the University of Tennessee.

Fundamental Role of Board Members

The UTFI requires each director to be a proven, valuable volunteer and supporter of the University of Tennessee through contributions of time, talent and treasure. Each director shall discharge his/her duties, including those as a committee member, in good faith, with appropriate care and concern, and in a manner believed to be in the best interest of the UT Foundation and the University of Tennessee.

Tennessee law imposes upon board of directors members the duties of good faith, loyalty, and care. UTFI procures Directors and Officers Liability Coverage as well as Errors and Omissions Liability Coverage. However, under Tennessee law, directors may be personally liable to UTFI for the harm it suffers if fiduciary duties are breached (willful, wanton or gross negligence). Directors also have a duty to disclose material information to the rest of the board if it could affect or require a board decision (unless doing so will violate ethical or confidentiality laws).

Board Member Responsibilities

Duty of Good Faith
You must act in good faith and be fair in your dealings with UTFI. You must not take advantage of the organization and its resources. Be upfront and honest in your dealings and in fulfilling your fiduciary obligations. Best practices in carrying out your responsibilities include:

• Regularly attending meetings of the Board, prepared to ask informed questions and make a positive contribution to discussions,
• Remaining informed about the general business affairs and finances of UTFI and
• Serving as a chair or member of one of the standing committees of the UTFI board.

Duty of Loyalty
Directors must act with undivided loyalty in the best interests of UTFI and not seek personal benefit from the activities or resources. In the event that you have a conflict of interest, you must comply with Tennessee law to resolve. Actions that benefit you at the expense of UTFI are a breach of your fiduciary duty. Board members fulfill this duty by:

• Annually completing the conflict of interest disclosure statement as well as a written disclosure of any newly arising conflicts between each annual disclosure statement, and
• Not sharing confidential, proprietary, sensitive or personnel-related information about UTFI with others, including University and/or Foundation staff.

Duty of Care
Directors must act as a prudent person would, be familiar with UTFI’s activities and financial condition, and participate regularly in board meetings. The Board must oversee the work of the CEO and make sure the organization is faithfully carrying out its charitable purpose without extravagance or waste. The Board must supervise and direct its own officers and govern the organization’s efforts in carrying out its mission.

• Fiduciary Attention requires Board members to preserve accountability and financial integrity as well as maintain a standard of credibility. Fiduciary responsibility is often interpreted as only the financial aspects of an organization, but more current and prevailing definitions recognize that the institution’s leadership is a critical asset to the health of UTFI and that the mission is the defining element dictating use of all assets. This expands the duty to assure there is strong leadership guiding the organization and that the organization does not engage in activities inconsistent with its mission. Board members achieve this by:
  • Understanding the structure and budgetary process,
  • Ensuring financial viability; approve long-range financial plans and annual, operating and capital budgets/forecasts,
  • Overseeing the audit process,
  • Accounting for UTFI’s real estate and other assets,
  • Evaluating the overall leadership effectiveness, and
  • Assuring the strategic direction of UTFI is in alignment with its mission and purpose and with the strategic priorities of the University of Tennessee.
• Governance. The role of the Board is to govern, not manage, UTFI. A Board member carries out the powers of his or her office only when acting as a voting member during a duly constituted meeting of the Board or one of its appointed bodies. Directors respect the responsibilities delegated by the Board to the President and UTFI leadership team, avoiding interference with their duties but insisting upon accountability and reporting mechanisms for assessing performance. The Board satisfies these expectations in many ways, the most central are:
  • Approve a mission, vision and strategic plan.
  • Review and approve major transactions and significant new programs and services.
  • Monitor organizational performance against goals.
  • Approve and periodically review major policies affecting UTFI and the operation of the Board.
  • Support, advise and evaluate the chief executive officer in conjunction with the university president. The board holds the CEO accountable and the CEO is responsible for his or her team. Directors do not interfere with the management of other employees.
  • Ensure the effectiveness of Board governance through regular self-assessment and improvement of governance.

Duty of Engagement
Board members have an opportunity to play key roles in generating public, political and financial support for the University of Tennessee. These are achieved by:

• Building relationships and supporting UTFI’s policies with key stakeholders, alumni, donors and political leaders.
• Explaining and supporting the decisions and policies of the Board in discussions with outsiders, even if the Board member voiced other views during a Board discussion.
• Working with the development and alumni staff across the foundation to identify and connect with donors, prospects and potential volunteer leaders.
• Participating as a generous donor to the university relative to financial capability, and
• Joining the University of Tennessee Advocacy Network and actively engaging in legislative advocacy as needed to support higher education and the mission of the University of Tennessee.

EFFECTIVE: 2/27/2012 · REVISED: 2/27/2012

Overview

The Chair of the Board, in consultation with the President & CEO, the Secretary, and committee chairs, may designate items to be approved or received for information by unanimous consent of the Board.

Only items that are routine in nature or noncontroversial shall be designated for unanimous consent. The following are examples of items that may be designated for unanimous consent: approval of minutes, approval of committee charters, approval of the Chair’s appointment of committee members and approval of signatory authority for bank and investment accounts.

Items designated for unanimous consent shall be separately identified on the Board agenda as a consent agenda and shall be voted on by a single motion. Full information about each item on the consent agenda shall be provided to the Board in advance of the meeting.

Any member of the Board may remove an item from the consent agenda by notifying the Secretary prior to the meeting. Before calling for a motion to approve the consent agenda, the Chair or Vice chair shall announce any items that have been removed from the consent agenda and ask if there are other items to be removed.