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LSU system president F. King Alexander

Advocate staff photo by HILARY SCHEINUK

The Ethics Board is considering the legality of reorganizing LSU’s private endowment foundation by making its chief also answer to the public university’s president in hopes of energizing fundraising efforts.

Losses over the past couple years in the $616.5 million endowment is not driving the reorganization of the LSU Foundation’s leadership. Rather, the motivation is LSU’s low level of fundraising when compared to other public universities, said Dan Layzell, the university’s chief financial officer and interim CEO at the foundation.

“Anyone you would talk to, not just at LSU, but any of the other public colleges and universities in Louisiana, will tell you that we are generally behind the curve in terms of our private philanthropy activities,” Layzell told The Advocate Friday.

With a few exceptions, “we have not raised significant funds like other public universities across the country,” he said. “We definitely realize we have to catch up and certainly this is one significant step in that regard.”

Endowments are pools contributed money that is invested. The proceeds are used to help fund scholarships, construction projects, research and other university-related activities. Most college endowments have more than $1 billion and the LSU System’s rank as the 114 largest in the country on national surveys.

The LSU Foundation is conducting a nationwide search for a new leader to replace Stephen Moret, who held the post for about 18 months after leaving the Jindal administration. He left the LSU Foundation for an economic development job in Virginia on Dec. 31.

Rearranging the foundation’s leadership is something LSU President F. King Alexander wanted to do since arriving in July 2013, Layzell said. The idea came to the forefront again after Moret left. “It gave the president and the foundation board an opportunity to revisit this concept and they decided the time was right,” Layzell said.

LSU hopes to have the new hire in place in time to prepare for a 2018 campaign aimed at raising more than $1 billion for LSU.

The plan is to make the foundation’s new chief executive officer, who would still report to the private organization’s board, also a vice president in the public university’s hierarchy who would also answer to Alexander.

Layzell said this is the set up used by many public universities.

Having a dual role allows the head of the foundation to work more closely with LSU’s other fundraisers – such as, the Tiger Athletic Foundation, the LSU Alumni Foundation and those set up to help other LSU campuses – as well as coordinate with the deans of the various schools, he said.

Three quarters of the LSU deans have been hired within the last three years and came aboard with the understanding that their ability to raise money was a key expectation.

“Consistent, direct, and strong involvement by college deans is a best practice that many of our more successful peer universities have long had in place,” Foundation Chair Robert M. Stuart Jr. and Layzell wrote the Board of Ethics on Feb. 2. “Deans are the ‘face’ of their respective colleges for alumni and their other supporters, and they are best positioned to articulate the vision and goals for the college and how philanthropy can support them.”

Merging the CEO post of an independent agency with a position in the public realm raises legal issues, which the Board of Ethics is wrestling with now. A final decision is expected soon.

State law has different, often conflicting, requirements for public and private employees.

For instance, a public official cannot solicit contributions from a company or official doing business with the government agency where they work, the latest draft of the Ethics Board advisory opinion states. Nor can a private entity, in this case the LSU Foundation, pay a public employee, such as an LSU vice president. Initially, the foundation had planned to pay the six-figure salary of the CEO/Vice President, even for activities that have nothing to do with the foundation.

LSU will have to pay the vice president. The Foundation, however, can reimburse the university for whatever work the vice president does as the chief executive officer for the fundraisers, the Ethics Board states. Just how to determine what hours are for the university and which ones can be charged to the foundation is an issue still up in the air.

“We need to get some greater clarity ourselves in that regard,” Layzell said.

The ethics codes were written before lawmakers contemplated that the state’s public universities would be involved in private fundraising, he said. “We’re in a much different world now."

Ultimately, the Legislature may have to change state law to allow public employees to fundraise on behalf of a public university, Layzell said, adding that LSU officials may pursue such legislation during the next session, which begins April 10.

Follow Mark Ballard on Twitter, @MarkBallardCnb.