The disclosure that Salem State University tapped its foundation to pay Tom Brady $170,000 to speak at the North Shore school has cast a spotlight on college foundations, raising questions about whether they receive adequate oversight.
All of the state’s 29 public colleges and universities — including community colleges and the University of Massachusetts — have foundations, which raise and oversee money from private donors. Colleges have come to rely more on the foundations as state support dwindles.
The foundations, nonprofits associated with the colleges, pay for faculty endowed chairs, research, student activities, and scholarships. They also fund high-profile events, like Brady’s talk last month, that administrators say attract needed exposure to their campuses.
Payment amounts vary. For its annual speaker series, Middlesex Community College’s foundation pays guests anywhere between $15,000 and $125,000, the college said. Speakers have included William Shatner, Robert Redford, and Laura Bush, but the school would not say who got the top dollar.
Some critics say the foundations spend too much on luxuries and not enough on needy students. Salem State’s $31 million foundation last year paid $300,000 in scholarships, less than twice what it paid Brady.
“It’s just outrageous what they spend the money on,’’ said Pablo Eisenberg, a senior fellow at the Georgetown Public Policy Institute who published a 2010 investigation about university foundations in Inside Higher Education.
Eisenberg said more money raised should help needy students, not already wealthy speakers.
“Brady, at least, didn’t insist they rename Salem State the Brady State University,” he said.
Because the groups are not subject to public records laws, some specialists warn that conditions are ripe for abuses, like when former Westfield State president Evan Dobelle racked up tens of thousands of dollars in questionable expenses on the foundation’s credit card.
There are more than 1,500 private foundations associated with public colleges and universities across the country, 25 of which hold endowments of at least $1 billion each, according to Eisenberg.
Nationally, scandals involving college foundation money are not uncommon.
College of DuPage in Glen Ellyn, Ill., charged $162,000 in alcohol in the past four years to a foundation fund intended for student scholarships, according to an investigation by the Chicago Tribune.
The president of Florida State College at Jacksonville charged more than $187,000 to the college and its foundation over two years, including a $1,260 per month Cadillac lease. President Steven Wallace also directed the foundation to make donations to local charities in his name, according to an investigation by the Florida Times-Union.
“Unless these transactions are made public, there’s a great vulnerability to abuse,” said Greg Sullivan, research director at the Pioneer Institute in Boston.
Sullivan rejected the idea that foundations are totally separate from the public schools and therefore deserve privacy. The foundations, and other shadowy quasipublic agencies and trusts, should all make their finances public, he said.
“If they had to disclose that they paid $170,000 to Tom Brady or any speaker, they probably would think twice about it,” Sullivan said.
State Representative Tom Sannicandro, cochairman of the Joint Committee on Higher Education, Wednesday was not as alarmed by the revelation about Brady.
“The fiscal concern is certainly warranted, but there were no public funds used, and that’s what I’m concerned about,” Sannicandro, an Ashland Democrat, said in a statement.
The University of Massachusetts Foundation manages the five-college system’s $770 million endowment. The foundation, which has its own staff, also provides technical assistance to fund-raising departments to the campuses and the president.
The foundation funds events that help with fund-raising, including the university’s annual activities in Florida, which includes a Red Sox spring training game for alumni, according to a UMass spokesman.
“The vast majority of the money is spent on things like scholarships and research. That’s why donors are giving, right?” said Ray Howell, spokesman for the UMass Foundation.
Salem State officials on Tuesday defended their speaker series as a prominent event that draws crowds to campus. Brady’s pay came from ticket sales and sponsorship for the series, not out of the pockets of needy students, they said.
“It’s a great opportunity to bring thought leaders to the North Shore,” said Tom Torello, vice president for marketing and communications at Salem State.
Most of the money managed by the foundation is subject to restrictions imposed by donors, who designate their money for certain purposes, like faculty research or academic programs, Torello said.
“The money from the series comes from people participating in the series,” he said.
Previous speakers at the Salem State’s well-known series, founded in 1982, include Maya Angelou, Archbishop Desmond Tutu, Henry Kissinger, and Rudy Giuliani. The college Wednesday would not say how much those people were paid, but said the amount in recent years has ranged, depending on the speaker, from $30,000 to $170,000, the amount Brady received.
The school paid Brady’s fee — and made a $40,000 profit — through sponsorships and the sale of tickets, which cost between $10 and $100, Torello said.
Fees at Salem State are set to rise next year by about $500 per student, to bring tuition and fees to an annual cost of around $9,000. Half of Salem State students receive financial aid and one-third receive Pell grants, federal assistance for the neediest students. Sixty percent of students take out federal student loans, according to US government data. .