Protesters at the University of Wisconsin-Madison encampment have demanded the disclosure of Wisconsin Foundation and Alumni Association (WFAA) finances since the encampment began on April 29.
The WFAA manages UW-Madison’s $4 billion endowment, provides direct financial support to UW-Madison and operates as a non-profit corporation. WFAA records and assets are not currently subject to Wisconsin’s Public Records Law, according to a 2018 UW System Board of Regents memo on the relationship between the university and its foundation.
“One of our student negotiators pointed out that [ongoing negotiations] will be pointless without disclosure of the WFAA's investments,” Jules, a media liaison for SJP, told The Daily Cardinal on Friday.
Environmental, social and governance (ESG) criteria could flag companies engaged in environmental violations, labor rights abuses or weapons manufacturing.
When asked how the WFAA integrates ESG criteria, Tod Pritchard, spokesperson for the WFAA, told the Cardinal the “WFAA provides broad investment information in the annual financial report but does not disclose details of investment holdings.”
Pritchard told WPR on Monday the WFAA does “not take directives on how to invest donor money from any parties outside of our board.”
UW-Milwaukee’s Foundation, released a statement on May 3 addressing questions from UW-Milwaukee pro-Palestine protesters. The UW-Milwaukee Foundation does not have any bond investments that “include weapons manufacturers or investments with governments in the Middle East,” the statement said.
They also said that in equity mutual funds the “investor cannot select what stocks or other investments are included in the fund.”
Why are WFAA records private, and could they become public?
Daniel Libit, a journalist with Sportico, sued UW-Madison and the WFAA in February after his records request for a Name, Image and Likeness (NIL) partnership between UW-Madison and Altius, a consulting firm, was denied because the WFAA held the record.
Libit has sued several public universities’ around the country for public records since 2017.
“As long as you're a public university and receive public funding, your records and your business should be accessible to the public,” Libit said.
Libit said university foundations are not completely independent of the university and therefore should be subject to similar public access and accountability.
“The alarming thing is if the Foundation (WFAA) is being used, ostensibly or legitimately, as the party to sign consulting contracts for the athletics department, that suggests that the University of Wisconsin probably is even more reliant on using its foundation than your normal public university,” Libit said.
In an opinion article from May 8, “Wisconsin’s Altius deal shows how colleges hide what public seeks”, Libit reaffirmed his concern that WFAA records are not accessible to the public despite the WFAA’s role in university operations.
“If it requires this kind of effort to get a relatively prosaic NIL consultant contract, imagine the lengths schools are willing to go to keep the really interesting stuff hidden,” the article said.
Libit said most recently UW-Madison argued they did not originally turn over the contract on a technicality. Depending on the final results of the lawsuit a judge could rule that certain WFAA records could become public. In other states, courts have found that public university’s foundation’s are subject to open records requests.
Demonstrators’ disclosure demands
In a proposal on Wednesday from SJP negotiators to UW-Madison administrators, they outlined their “Ethical Investment Strategy” for UW-Madison, including “accountability and oversight.”
“As UW-Madison students, we demand that all future financial contributions to the University, whether made through tuition or donations as alumni, be invested strategically, with ethical investing at the forefront of the University’s Practices,” the proposal said.
A previous Cardinal financial review of UW System’s long-term investments found investments in weapons manufacturing through an Exchange-Traded Fund (ETF), a pooled investment that can be made up of individual companies’ stocks or other ETFs. The pro-Palestine protesters have called for divestment from the ETF, in which the UW system has $249 million invested.
At a UW-Madison Faculty Senate meeting on Monday, Mnookin said the WFAA is a “separate, independent 501(c)(3) non-profit organization, which means we do not and cannot govern their investment decision.”
WFAA Public Records Summary
The Cardinal reviewed recent public records published by WFAA required by state and federal law including Internal Revenue Service (IRS) tax filings, U.S. Securities and Exchange Commission (SEC) filings and state audits. No information regarding WFAA’s specific investments were found in this review.
The WFAA’s most recent publicly available form 990 filed with the IRS shows the total amount invested by the foundation. It also shows the salaries of those employed by the foundation.
Three of the executives make over half a million dollars a year in salary, including Senior Managing Director of Investment Richard Shepley. In 2022, Shepley made more in salary than Mnookin.
Investment managers of an investment fund must disclose personal investment details when exercising investment discretion over $100 million. One of the UAFF’s investment managers was required to file their 2024 Quarter 1 investments, according to Form 13(f) filed with the SEC, including $18.5 million in BlackRock’s IVV. IVV is an Exchange-Traded Fund (ETF) that weights holding to track the S&P 500.
The top 10 U.S. defense contractors make up approximately 1.6% of the BlackRock IVV Index as of May 6, 2024, according to a financial review by the Cardinal. This includes Lockheed Martin, General Dynamics, Northrop Grummann and others.
Editor's Note: Ty Javier and Noe Goldhaber have no direct position in any of the stocks mentioned.
Ty Javier is a senior staff writer and photographer at The Daily Cardinal. He is an Economics major and has specialized in university and campaign finances, economic policy and transit.
Noe Goldhaber is the college news editor and former copy chief for The Daily Cardinal. She is a Statistics and Journalism major and has specialized on a wide range of campus topics including protests, campus labor, student housing, free speech and campus administration. She has done data analysis and visualization for the Cardinal on a number of stories. Follow her on Twitter at @noegoldhaber.
