Sam Houston State University (SHSU) has only one institution-related entity formed primarily for the purpose of supporting the institution or its programs: the Sam Houston Foundation (SHF).
Legal Authority and Operating Control of the SHF
The SHF was formed on April 17, 1967 [1], and is still in operation today. On July 31, 1967, it was declared a 501(c)(3) organization by the Internal Revenue Service (IRS) [2]. On September 16, 1971, the IRS declared the SHF a 509(a)(3) organization [3]. The SHF is not controlled by SHSU but by a board of trustees [4], none of whom are SHSU employees. The foundation's financial condition as of 8/31/17 is documented on the SHF Annual Financial Report to the TSUS Board of Regents [5].
Relationship Between the SHF and SHSU
The original trust document [1] demonstrates that there is a formal agreement between the SHF and SHSU, and it accurately describes the relationship between the two entities. Further evidence of the relationship between SHSU and the SHF is seen through the SHF Operating Agreement [6]. Section 6 of the SHF Operating Agreement states, “the University acknowledges that the Foundation is a separate, independent, not-for-profit, tax-exempt corporation, maintaining the direction over its general and fiscal policies, employees, management of its affairs and operations.” Section 9 of the SHF Operating Agreement details the liability of both SHSU and the SHF, stating the following:
The Foundation agrees to indemnify and hold harmless the Texas State University System (System), its Board of Regents, the University and its officers, employees and agents from any claim, loss, damage, liability, injury or expense, in whole or in part arising from the activities and/or negligence by the Foundation. To the extent permitted under the law of the State of Texas and without waiving sovereign immunity, the University agrees to hold the Foundation harmless and indemnify its Board of Trustees from any claim, loss, damage, liability, injury or expense, arising from the negligence of the University.
Fundraising Activities of the SHF
The President does not directly oversee fund-raising activities for the SHF, rather the fund-raising activities of the SHF are defined in a formal, written manner, which assures that those activities further the mission of the institution. The purposes of the SHF are consistent with the mission of SHSU [7]. The purpose of the SHF is to accept, receive, manage, operate, control, administer, and invest real, personal, or mixed property, given, granted, donated, or bequeathed for the benefit of SHSU for educational purposes, student loan and scholarship funds, or any other trust or specified purpose [1]. In accordance with its Operating Agreement [6], the SHF works to “create an environment conducive to increasing levels of private giving in support of the University’s mission and fund-raising priorities” and will “not compete but coordinate with the University on fund-raising programs to ensure efficient, well-planned activities to raise significant private support and to avoid conflicts that the University President determines might confuse donors.”