Fresno State Foundation approves term limits, board changes as it enacts sweeping reforms

The Fresno State Foundation continued to right itself following a scathing advisory review by the California State University chancellor’s office, voting Tuesday at the first meeting of the fiscal year, and first under the leadership of new chairman Christopher Morse, to adopt recommended governance changes included in a long list of reforms.

That included term limits for its board of governors, and terms limits and a rotation for board and committee officers. It also voted to revise board composition to include appropriate faculty and student representation and ensure alignment with regulatory requirements, and have the university vice president of administration and CFO serve as foundation treasurer.

The changes solidify governance of the $315 million foundation that apparently had stagnated under limited board and officer turnover over many years, which contributed to issues in operations and its financial control environment, according to the review by CSU Audit and Advisory Services.

“Personally, I think it’s important that you have new blood, you have new energy,” Morse said. “And, if somebody is doing a really great job, they can go off for a year and our bylaws say we can bring you back after a year. It’s just good practice.

“Whether it’s called best practice or not, we can argue about that, but I think it’s just good practice. Most boards have that, and it passed unanimously.”

The Foundation board prior to the CSU review included five members that had served for 20 or more years, well past established best practices, according to experts in nonprofit governance. Former board chair Vinci Ricchiuti had served 32 years before leaving the board at the end of June.

University president Saúl Jiménez-Sandoval, who requested the foundation review due to a misunderstanding of the Nonprofit Integrity Act of 2002, was on a business trip in Mexico with state legislators and unavailable for comment.

Jiménez-Sandoval, the only university employee on the foundation board, attended the meeting remotely.

The Fresno State Foundation, which was established in 1931 as a nonprofit public benefit corporation, oversees university gift and donation acceptance and management, endowment management, and grant and contract administration.

The university endowment is $250 million, with another $65 million in government grants.

The CSU review, which was released in January, detailed 45 areas in need of remediation in six areas including board financial practices and endowment management.

It stated weaknesses in those areas heightened exposure to financial misstatement, fraud, and operational inefficiencies. It found no evidence of malfeasance during the review.

The Foundation had voted in 2022 to eliminate term limits for its board of governors that were only loosely and perhaps selectively enforced over decades. Its board members now can serve no more than three consecutive three-year terms, and may return following a one-year absence.

Officers and committee chairs serve 1-year terms, and no more than four consecutive terms.

The board has been composed of community members and the university president, and lacked adequate staff, faculty, and student representation as required by state law, according to the 32-page report by CSU Audit and Advisory Services, which conducted the review.

That will change, following the vote of the board on Tuesday. Specifics on how many faculty members or students will be added to the board are to be determined. The priority Tuesday, Morse said, was to revise Foundation bylaws to include appropriate university representation ahead of a September deadline, agreed to with the CSU chancellor’s office.

The Foundation, Morse said, had completed 29 of 45 remediation actions in the CSU report.

“A lot of the governance stuff are done, we’re two-thirds of the way done with all the findings and most of them aren’t due yet,” Morse said. “We’re on schedule, and the plan is to get done by Dec. 31, even though some aren’t due until later.”