Photo credit: @SJSUAthletics
By: Ana Kieu
This morning, San Jose State Athletics tweeted that the SJSU Media Relations released findings, cited inaccuracies, and requested corrections to the Spartan Daily’s May 15 reporting on donor funding to SJSU Athletics. Of course, the Spartan Daily received the correction requests and worked on reviewing them, but their line “It’s always our priority to ensure we get the story right” just doesn’t sound right. If they truly cared, then they’d go the extra mile.
I usually stay out of politics on social media, but fake news was an issue that I couldn’t ignore. Sure, the term was popularized by President Donald Trump, but fake news is indeed an issue in the United States–and it’s more than just fake news. Although a single line can mean different things among different types of people, it’s still wrong for one to think that it’s okay to publish such information. Now, I’m not saying the Spartan Daily intentionally wrote with the intent to mislead the masses, but it’s sort of scary to know that they’re journalists in training.
To be clear, I majored in Communication Studies at San Jose State University, but still, this was a disappointing news update to see on a Monday morning. Yes, there has been a lot of controversy at San Jose State–possibly more than any other university in the Mountain West Conference, but the fact the fake news was reported by many news sources–whether local or national, like, say, USA Today and 247Sports–makes me wonder how gullible some people really are. At this point, it’s too little, too late, but this is an issue that we should think about moving forward.
Here’s the list of corrections SJSU Media Relations sent to the Spartan Daily:
Spartan Daily published a series of stories in its May 15, 2019 special edition that contained 22 inaccuracies ranging from allegations of mishandled Spartan Foundation funds and endowments to mismanagement of donor money. On June 13, SJSU Media Relations formally submitted a list of inaccuracies to Spartan Daily with a request to provide readers an accurate account of information by making corrections on its online and print editions. This page provides a full summary of the list submitted to the student newspaper with the inaccuracies highlighted in blue for each statement.
Spartan Daily “Millions Misused” article (05/15/19, print publication, page one)
Statement
Less than 5% of Spartan Foundation money intended for athletic scholarships was distributed to San Jose State athletes from 2013-2016 according to sources and confirmed by document reviewed by the Spartan Daily
Correction
Every donation designated by the donor for athletics scholarships was used for that purpose.
Statement
The Spartan Foundation was marketed to donors on SJSU athletics’ website as a fund that provides athletic scholarships, and was managed as part of the Tower Foundation since 2014.
Correction
Spartan Foundation (SF) is a separate 501(c)3. SF is not managed by Tower Foundation. It deposited its donations into accounts at the Tower Foundation.
Statement
The Spartan Foundation was marketed to donors on SJSU athletics’ website as a fund that provides athletic scholarships, and was managed as part of the Tower Foundation since 2014.
Correction
Bylaws of Spartan Foundation, Inc. (revised, June 20, 2012) articulate the primary purpose of the Spartan Foundation as described below. Fundraising for scholarships was not the only or sole purpose.
BYLAWS OF SPARTAN FOUNDATION, INC. (source document)
ARTICLE II FOUNDATION PURPOSE
Section 1. THE PRIMARY PURPOSE. The primary purpose of the Spartan Foundation is to raise funds to support nearly 450 student-athletes annually for the following;
A. Scholarships for all varsity sports.
B. Assist with the operating budgets and Sports Improvement Funds (coaches’ salaries, travel, equipment, recruiting) for the varsity teams.
C. Building, renovating and maintaining facilities for these teams.
D. Student-Athletes Academic Center and provide support to our academic staff.
Statement
“The Spartan Foundation is the fundraising arm of the San Jose State University Athletics Department,” the website previously stated. “As its primary objective, the Spartan Foundation provides scholarship support for all of San Jose State’s NCAA Division I athletic teams.”
Correction
Primary objective does not equal sole objective.
Bylaws of Spartan Foundation, Inc. (revised, June 20, 2012) articulate the primary purpose of the Spartan Foundation as described below. Fundraising for scholarships was not the only or sole purpose.
BYLAWS OF SPARTAN FOUNDATION, INC. (source document)
ARTICLE II FOUNDATION PURPOSE
Section 1. THE PRIMARY PURPOSE. The primary purpose of the Spartan Foundation is to raise funds to support nearly 450 student-athletes annually for the following;
A. Scholarships for all varsity sports.
B. Assist with the operating budgets and Sports Improvement Funds (coaches’ salaries, travel, equipment, recruiting) for the varsity teams.
C. Building, renovating and maintaining facilities for these teams.
D. Student-Athletes Academic Center and provide support to our academic staff.
Statement
$4.5 million was not distributed per year for athletic scholarships through the foundation fund, according to Spartan Foundation account details.
Correction
As Spartan Foundation fundraising was inadequate to fund all scholarships, SJSU Athletics used other sources of revenue, beyond Spartan Foundation donations, to fully fund all scholarships. Most importantly, all student-athletes who were selected to receive scholarships received them.
Specifically, from 2013 – 2016, SJSU Athletics provided over $25M in student-athlete scholarship aid through multiple revenue sources such as but not limited to sponsorship agreements, television contracts, game guarantees, and ticket sales.
The following data of athletically-related student aid is sourced from EADA (Equity in Athletics Disclosure Act) as SJSU Athletics submits required information to the Department of Education and reported to the NCAA.
Source: EADA (Equity in Athletics Disclosure Act)
Department of Education site:
Survey Year | Athletically-Related Student Aid
2013 | $5,167,667
2014 | $5,733,710
2015 | $6,813,951
2016 | $7,604,545
Total | $25,319,873
Spartan Daily “Demystiying endowments and donations to Tower Foundation” article (05/15/19, print publication, page two)
Statement
Endowment #5. After three years of accruing interest, the revenue from the principal investment is sent from the Tower Foundation to the intended area of use.
Correction
A distribution from the endowment is made every spring based on the trailing three-year average market value of the fund. Distributions from scholarship endowments are directed to the Financial Aid and Scholarship Office; distributions from other endowments are retained in separate accounts at the Tower Foundation. Distributions are not sent to any department other than Financial Aid.
Statement
Donation #2. A donor contract is signed, including the agreed upon amount and where the money will be going. There is no minimum for single-time or recurring donations given.
Correction
Donor contracts are not required for non-endowed donations unless the purpose of the gift is complicated or involves naming a facility or program.
Spartan Daily “What actually happened” (5/15/19, printed version, page three)
Statement
#2. Donors sign a contract, including the agreed upon amount and where the money will be going. There is no minimum amount for single-time or recurring donations.
Correction
Donor contracts are not required for non-endowed donations unless the purpose of the gift is complex or involves naming a facility or program.
Statement
3. The money should be processed through the Tower Foundation, and then distributed to the area of use based on the donors’ original intent. Donations are given out the same year as donated unless specified in the donor contract.
Correction
3. The money should be processed through the Tower Foundation, where it is available for the purpose specified for the donor. Donations are not given out in the same year as they are on deposit in a Tower account for the area (college/division/department/program) designated by the donor to utilize for the intended purpose depending when the funds are needed. It could be next month or even the following year – as it depends upon variables such as donation amount, timing of the gift, and other funds available for the area’s needs.
Spartan Daily “San Jose State’s commitment. Donor Bill of Rights” (5/15/19, printed version, page three)
Statement
The Donor Bill of Rights is an agreed upon list of rights and regulations for donors and San Jose State respectively.
Correction
The Donor Bill of Rights is an agreed upon list of donor rights considered best practices for charitable organizations. San Jose State and the Tower Foundation subscribe to the Donor Bill of Rights.
Spartan Daily “Timeline” (printed version, page four and five)
Statement
According to Spartan Foundation documents reviewed by the Spartan Daily, the foundation had more than $4.5 million in total revenue that year and $0 was transferred to athletic scholarships..
Correction
Of the $4.5 million of revenue, almost $3.3 million was a transfer of Spartan Foundation balances from SJSU to the Tower Foundation.
Statement
The Tower Foundation sets up a separate branch strictly for athletic donations, hiring Josh Thiel to be the university’s first-ever deputy athletics director for advancement.
Correction
University Advancement sets up a separate branch strictly for athletic donations, hiring Josh Thiel to be the university’s first-ever deputy athletics director for advancement. However, prior to the establishment of Athletics Advancement, different individuals in Athletics were involved with fundraising.
Spartan Daily “Address confusion leads to incorrect deposits of donor money” (05/15/19, printed version, page eight)
Statement
The university then announced in 2014 that the Spartan Foundation account was moved out of athletics and into the Tower Foundation, according to the Spartan Athletics website.
Correction
In 2013, Athletics opened accounts for the Spartan Foundation with the Tower Foundation, which it subsequently used for depositing donations.
Statement
In 2016, four individuals received more than $150,000 in compensation from the Tower Foundation and “related organizations,” including Faas, Bleymaier, Andy Feinstein, the provost and vice president of academic affairs, and Coleetta McElroy, the president of the SJSU Alumni Association
Correction
As an authorized auxiliary of SJSU, Tower and SJSU are related entities. The IRS requires disclosure of board directors’ compensation from related entities. In 2016, the Tower Foundation’s 990 listed 26 individuals who were affiliated with Tower Foundation. Eight individuals, not four as listed in the article, were from related entities. Other than Bleymaier, none of the eight individuals were paid by the Tower Foundation.
Spartan Daily “Endowments mishandled” (05/15/19, printed version, page eight)
Statement
“Endowments held by each school are not even all distributed,” one source said.
Correction
Endowment distributions are made annually unless the donor requests distributions only be made after a certain date.
Statement
“There are cases where endowments have not been spent with donor intent.”
Correction
In the rare instances that endowment spending isn’t aligned with the donor’s intention for the funds, department personnel are advised what permitted uses are.
Statement
The sources said they saw Tower Foundation money distributed to individual colleges, but the deans spent the money against donors’ intent. When the donors came back to ask where the money went, the Tower Foundation realized the mistakes made by individual colleges.
Correction
This broad statement falsely implies all distributions were mishandled by the colleges. In the rare instances that spending is outside the donor’s intent, Tower Foundation requests the expenditure be paid from another account. At times, Tower has sought donor permission for exceptions.
Statement
Student scholarships sit in the Tower Foundation because sometimes the deans have a hard time reading the Tower Foundation quarterly report or the deans didn’t know the scholarship money existed, sources said.
Correction
Background: Within 90 days of a new dean or VP starting, Tower Foundation’s Chief Operating Officer, Leslie Rohn, meets with them and review every single endowment and current use account in their college with them, answering questions and providing copies of source documents they need. Correction: Donations for student scholarships were transferred to the Financial Aid and Scholarship office two years ago after a Chancellor’s Office audit recommended that scholarships be held in a single location.
Statement
The sources also said that when development officers in charge of donor accounts leave their job, their endowment accounts were forgotten about.
Correction
Endowment account holders (whether they be the dean, department chair or program director) receive monthly reports showing endowment distribution balances and spending. The focus of development officers is on cultivating major gifts rather than accounting for funds in their colleges. Tower has a senior accountant whose focus is the endowment; she not only answers questions, she alerts the dean or department when an endowment isn’t being used.
Statement
Kuehn was hired in December of 2016, and since then, Tower Foundation employees said an accounting system in the Tower Foundation has been instituted to ensure donor money is properly logged and going exactly where it is intended.
Correction
The endowment system referred to as an accounting system was brought online in 2015 by Kuehn’s predecessor. The endowment system streamlined many processes, but prior to it there were internal controls which were designed to ensure donor funds were appropriately used. Tower Foundation has an annual financial audit by an accounting firm approved by the campus and the Chancellor’s Office. There have been no findings nor deficiencies identified by the auditors. The Tower Foundation also has a rigorous triennial Chancellor’s Office audit. There have been no endowment findings or deficiencies identified by the Chancellor’s Office auditors.
Spartan Daily “Tower reforms and resignation” (05/15/19, printed version, page eight)
Statement
In 2018, the Tower Foundation set up a separate branch strictly for athletic donations, hiring Josh Thiel to be the university’s first-ever deputy athletics director for athletics advanement.
Correction
University Advancement sets up a separate branch strictly for athletic donations, hiring Josh Thiel to be the university’s first-ever deputy athletics director for advancement. However, prior to the establishment of Athletics Advancement, different individuals in Athletics were involved with fundraising.
Statement
Then, after being called the Spartan Foundation since 1958, the Spartan Foundation was renamed the Spartan Athletics Fund in August of 2018.
Correction
The Spartan Foundation wasn’t renamed. The annual fundraising Spartan Foundation used to do was taken over by Athletics Advancement. The annual fund was named Spartan Athletics Fund.
Statement
President Papazian announced the resignation of Paul Lanning, who was the CEO of the Tower Foundation
Correction
Paul Lanning was VP for University Advancement and CEO of the Tower Foundation
Spartan Daily “Budget reports disguise fund” (05/15/19, print publication, page eight)
Statement
The Spartan Foundation reported in its 2014 990 EZ tax filings that it had received $0 in gifts, grants, contributions and membership fees. However, according to the documents reviewed by the Spartan Daily, almost $1.5 million was collected that year.
Correction
Spartan Foundation, a 501(c)3 organization, utilized its accounts at the Tower Foundation for depositing funds raised starting in 2013. As a result, the Spartan Foundation was no longer the legal recipient and therefore its 990 EZ tax form stated $0 received in gifts, grants, contributions and membership fees.
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