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Alumni Council's Stand Cause for Confusion?

by on April 21, 2015 6:15 AM

I've been a proud lifetime member of the Penn State Alumni Association for the better part of three decades, shamelessly promoting Penn State wherever I go and doing what I can to promote communication and networking among all my Penn State "peeps."

Except now I'm a little confused.

Perhaps you've heard that several members of the Penn State Board of Trustees wanted to run for election to the Penn State Alumni Association's Alumni Council, were refused spots on the ballot, and now have filed a lawsuit to get their names on the ballot. This is the source of my confusion.

Before we go any further, please know that my only affiliation on this topic is with the alumni association – which I hold in high regard. I have served as an officer in an alumni interest group, know several people who work at the alumni association, and as I mentioned above, have been a lifetime member for years. The bottom line, in those immortal declamatory words -- my views and opinions are my own and do not reflect those of anyone or anything with which I may be associated.

First, the Trustees. Four of them would like to be elected to the alumni council. My feeling about alumni council is simple: if you are an alumnus and a lifetime member of the alumni association (c'mon, you gotta put your money where your mouth is) then you should be allowed to run for a seat. If the alumni association wants to put a "gate" in the process similar to the one used in almost all public office elections – a minimum number of elector signatures – that is a fine precondition any nominee should meet. Meet those conditions and voilà, your name is on the ballot. Works for America, should work for this.

That being said, the four trustees have gone one step further and outlined a good reason why they would like to be elected: to advocate for inclusive and transparent governance processes within the alumni association. Seems like a no-brainer to me, so what's the issue?

Now, the alumni association. Roger Williams, the executive director of the alumni association, has said that the alumni council's nominating committee decided university administrators and trustees, and nominees engaged in lawsuits against the university or association, cannot run for seats. The three primary reasons for this are; the potential for disproportionate influence in council proceedings; potential conflicts of interest; and the potential for compromising the association's independence and autonomy as a 501(c)(3) nonprofit organization. Basically the association is disinclined to acquiesce to their request. Means "no."

In expounding on the first two reasons, Mr. Williams makes several interesting comments.

He predicts that by virtue of their inherent power as trustees, the four could dominate council proceedings. Keep in mind this is an organization with 86 members that meets all of two times a year. There are not that many proceedings to dominate, and even though there's no reason to believe that they would, if they did, it may be beneficial anyway. This is legislating out a problem you don't even have.

He then makes the following argument – if four are allowed to run this year, how many more would follow suit the year after? This is the same argument many Pennsylvania legislators use to keep Penn State's appropriation where it is – abysmally small. If we give you more money this year, how much more will you ask for the year after? The point is simple: you are the alumni association, if I'm an alumnus I should be able to run. And how many decide to run will be a lot less than the 10 seats the association will have available anyway. As to the legislators, if they're going to call Penn State a public university, at least 50 percent of the budget ought to come from the state.

But my favorite reason is that third one: the potential for compromising the association's independence and autonomy as a 501(c)(3) nonprofit organization.

As someone who has worked with nonprofit groups for years, I am perplexed by this comment. Without getting into the extended details, alumni associations have 501(c)(3) "charitable" status only BECAUSE of their dependence on and association with an educational institution. An alumni association's mission in and of itself is not "charitable" in nature. Because of that the IRS clearly outlines this dependence for alumni associations. Here is the entire paragraph on page 26 of IRS Publication 557, Tax-Exempt Status for Your Organization, that explains what criteria an alumni association needs to meet to be considered a 501(c)(3):

Alumni association. An alumni association should establish that it is organized to promote the welfare of the university with which it is affiliated, is subject to the control of the university as to its policies and destination of funds, and is operated as an integral part of the university or is otherwise organized to promote the welfare of the college or university. If your association does not have these characteristics, it may still be exempt as a social club if it meets the requirements described in chapter 4, under 501(c)(7) - Social and Recreation Clubs.

The point being that Penn State controls the alumni association because if it didn't the association would have 501(c)(7) tax status -- the same as the Elks Club – i.e. your donation would not be tax-deductible.

To drive that point home, all you need to do is check the alumni association's tax returns. The most recent one available covers July 1, 2012 – June 30, 2013. It lists a salary for Mr. Williams, but no other salaries or benefits for anyone else, and includes this explanation on Page 3 of Schedule J:


In other words, everyone who works for the association is paid by Penn State. I'm fairly sure "independence and autonomy" are not words that would describe that relationship. (For simplicity sake I'm leaving out Penn State's own interesting relationship with tax-exempt status – it doesn't claim to be a 501(c)(3). That's a column in itself!)

Given all of the information above, here's the root of my confusion.

In January, Roger Williams announced his retirement effective June 30th. He has been the executive director of the Penn State Alumni Association since June 2003. He previously worked at Penn State from 1978 to 1995.

He holds three degrees from Penn State: a bachelor's, a master's, and a doctorate. He leads the largest dues-paying alumni association in the WORLD, and increased annual revenue 33% during his tenure. I've had the honor of meeting him several times and he is a wonderful, genuinely easy-going, open and principled individual.

I like him.

By all accounts he bleeds blue and white and the general alumni perception of the association is, has been, and continues to be very good. Considering many alum's 180-degree opposite perception of the primary leadership group at the university, this alone could be considered an unbelievable feat.

When the unparalleled success of your organization has been based on inclusion, why take a step now toward exclusion?

This, dear readers, is what confuses me.



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John Hook is the president of The Hook Group, a local management consulting firm, and active in several nonprofit organizations. Previously John spent 25 years in executive, management and marketing positions with regional and national firms. John lives in Ferguson Township with his wife Jackie and their two children.
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