5.3 INSTITUTION-RELATED ENTITIES

For any entity organized separately from the institution and formed primarily for the purpose of supporting the institution or its programs:

(a)    The legal authority and operating control of the institution is clearly defined with respect to that entity.

(b)    The relationship of that entity to the institution and the extent of any liability arising from that relationship are clearly described in a formal, written manner.

(c)    The institution demonstrates that (1) the chief executive officer controls any fund-raising activities of that entity or (2) the fund-raising activities of that entity are defined in a formal, written manner which assures that those activities further the mission of the institution.

JUDGEMENT

Compliance     Non-Compliance     Partial Compliance

NARRATIVE

The affiliated entities of North Carolina A&T State University are (linked to their Bylaws):

· North Carolina A&T Real Estate Foundation

· Aggie Athletic Foundation

· North Carolina A&T Investment Foundation

· North Carolina A&T Alumni Association

The Chancellor, as the Chief Executive Officer of the University, is ultimately responsible for the university’s relationship with its affiliated entities. Most of these relational responsibilities are delegated to the Vice Chancellors who serve as liaisons to the respective affiliated entities. 

While these entities support the mission of the university, they are independent of the university, they do not affect the financial soundness of the university, and they create no associated liability for the university.  Examples of Bylaws and other documents that describe the relationships are provided in the supporting documents.

(a) The legal authority and operating control of the institution is clearly defined with respect to that entity.

All affiliated entities of the university, especially those engaged in fundraising activities or the management of university funds, are required to adhere to UNC Policy Manual 600.2.5.2[R], Required Elements of University-Associated Entity Relationship. The regulation governs the roles, responsibilities, activities and reporting of each entity. Affiliated entities must have bylaws that clearly explain the relationship with the university, and the Chancellor’s authority as it relates to the organization. These entities:

a. are organized for the primary purpose of supporting the university;

b. have an up-to-date operating agreement with the university;

c. are organized as non-profit, in compliance with North Carolina law;

d. have tax exempt status;

e. have at least one senior academic or administrative officer (SAAO) of the institution, or a designee, approved by the Chancellor, as an ex-officio member of their governing boards;

f. have appropriate dissolution language in their governing documents conveying their assets to the institution or another approved entity supporting the university.

(b) The relationship of that entity to the institution and the extent of any liability arising from that relationship are clearly described in a formal, written manner.

The Constitution and Bylaws for the North Carolina A&T University Alumni Association, Inc. and the Operating Agreement and Memorandum of Understanding show the relationship of the association with the university, but describes no liability arising from that relationship. 

Formal relationships also exist between the university and the N.C. A&T University Foundation, Inc., (Bylaws provided above and in Supporting Documents) and the N.C. A&T Sports Hall of Famers Educational Foundation, Inc., but none discuss liability arising from the relationships. 

The university does not assume liability for its affiliated entities.

(c) The institution demonstrates that (1) the chief executive officer controls any fund-raising activities of that entity or (2) the fund-raising activities of that entity are defined in a formal, written manner which assures that those activities further the mission of the institution.

In cases where the affiliated entity’s core functions include fundraising, e.g., the Alumni Foundation and the N.C. A&T Sports Hall of Famers, the fund-raising activities of the entity are described in such a manner as to assure the university and the entity that those activities are intended to support the mission of the university.  The Bylaws and supporting agreements have been provided.

SUPPORTING DOCUMENTS

1. Bylaws/Article of Incorporation

i. North Carolina A&T Real Estate Foundation

ii. Aggie Athletic Foundation

iii. North Carolina A&T Investment Foundation

iv. North Carolina A&T Alumni Association

2. UNC Policy Manual 600.2.5.2[R] Required Elements of University-Associated Entity Relationship

3. Constitution and Bylaws for the North Carolina A&T University Alumni Association, Inc.

4. Operating Agreement and Memorandum of Understanding for the University Alumni Association, Inc.

5. N.C. A&T Sports Hall of Famers Educational Foundation, Inc.