Fresno State Foundation digs in — at odds with CSU over adding faculty, students to board

An embattled Fresno State Foundation appears headed for a fight with the California State University on several key points in a plan to implement governance and operational changes stemming from a highly-critical advisory review from the chancellor’s office.

That review, which was released by the university in January, found weaknesses in the foundation’s governance and financial controls that left it open to financial misstatements, fraud and operational inefficiencies, and impacted its ability to support the university’s missions.

The foundation manages more than $315 million in endowments and post-award grants for the university, and it’s the only independent auxiliary organization in the 22-campus CSU system that oversees philanthropic and research or grant activity.

The foundation governance committee in a meeting Monday morning took no action on several recommended changes, ahead of a June 30 deadline.

That included revising board composition to include appropriate university representation. The foundation has lacked staff, administration, faculty or student representation and according to the advisory review by CSU Audit and Auxiliary Services, is in violation of state law because of it.

The foundation obtained a legal opinion that challenges that conclusion.

“The Fresno State Foundation was incorporated in 1931. Since that date no substantial changes have been made to its board’s composition,” governance committee George Soares said, reading the opinion from outside counsel during a meeting held remotely on Zoom.

“Section 42602 sub B sub 1 of Title V of the California Code of Regulations states that approved auxiliary organizations other than student body organizations operating on April 1, 1969, may continue the composition of their governing boards of directors existing at that time.”

Accordingly, Soares said, this controlling provision allows the foundation to continue with its existing board composition.

Brady Crook, the university’s vice president for advancement, countered.

The lack of appropriate representation on the board, he said, is one of the issues that led to the review requested by university president Saúl Jiménez-Sandoval.

“I think that will be in direct conflict with what the chancellor’s office has said and what they put in the review,” Crook told the committee.

“Their assessment is that we materially changed when we brought on research and other aspects as we updated our articles of incorporation and bylaws, and therefore we are beholden to CCR Title V.”

Governance committee members just dug in.

“We have used outside counsel to study this matter,” Claude Laval III said. “He has given us a written opinion and based on that we cannot alter the board composition as suggested by the chancellor’s office.”

Foundation board chair Vinci Ricchiuti, addressing Crook, said, “What we found in our discovery, the only thing that voids the exemption for Title V is when there’s a change in composition of the board. Those other items that you noted, we did not find triggered a void of the exemption.

“What we read and what we discovered was, the only time that exemption is voided out is if you change the composition, and we have not changed the composition of our board. We have updated bylaws. We have done different things, but the board composition since 1931 has remained the same. Always, community members with the president being the ex-officio member.”

Crook requested a copy of the foundation’s legal opinion to present to CSU attorney’s. That was shut down.

“At this particular moment, it’s a confidential document,” Soares said. “I’ll have to talk to the committee about that. We have our conclusion. What I am looking for from the CSU is their conclusion relative to that particular code section, as to why they think this proposal is appropriate.”

The foundation governance committee also took no action on board terms that are expiring on June 30 or to address a slate of officers for 2026-27 or committee chairs and board members committee assignments for 2026-27, three items that were on its meeting agenda.

According to an implementation plan that was submitted by the Fresno State Foundation to the chancellor’s office, it also by June 30 is to:

• Establish and enforce term limits for its board of governors
• Establish and enforce term limits and a rotation for its officers
• Document a policy for board chair and committee chair rotation in alignment with requirements in the foundation’s governance committee charter.
• Revise its bylaws to reflect current leadership roles, including the assignment of foundation executive director to the university’s vice president for advancement.
• Establish and enforce term limits for its board of governors
• Establish and enforce term limits and a rotation for its officers
• Document a policy for board chair and committee chair rotation in alignment with requirements in the foundation’s governance committee charter.
• Revise its bylaws to reflect current leadership roles, including the assignment of foundation executive director to the university’s vice president for advancement.

The governance committee will meet again before the final meeting of the full board on June 30.

The foundation eliminated term limits in 2022, and only loosely enforce them prior to that. When a board member’s term expires, the university president, board chair and governance committee are to make a determination whether it is in the best interests of the corporation to recommend reelection to the board.

Prior to the change, term limits were set at two consecutive four-year terms, with an option to serve again following a one-year absence from the board.

Ricchiuti is completing a 32nd year on the board and has been its chair since 2016-17. There are four members on the 25-person board that have served for 20 or more years, well beyond accepted industry-standard term limits, and 11 that have served for 10 or more years.