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Latest Cases & Developments
Date:
U.S. Department of Education Opens Foreign Funding Investigation into University of Pennsylvania (May 8, 2025)
U.S. Department of Education (the Department) announced a foreign funding investigation into the University of Pennsylvania after a review of the university’s foreign reports revealed allegedly “inaccurate” and “incomplete” disclosures. Specifically, the Department asserts that the University failed to disclose any foreign funding prior to February of 2019. To ensure compliance with Section 117, the Department requested that the University produce (1) tax records from January 1, 2017, through present; (2) University systems and written procedures; (3) a copy of each written agreement with a foreign government, foreign educational institution, foreign non-governmental entity, or foreign corporate entity detailing admissions agreements for international students, faculty, scholars, and any research personnel; (4) identification of all personnel involved in research collaborations with non-U.S. research institutions, who oversee the University’s compliance with federal Foreign Government Talent Recruitment Program requirements; and (5) a complete list of all foreign gifts, grants, contracts, and/or restricted or conditional gifts, grants, or contracts between the University and any foreign source.
Topics:
Endowments & Gifts | International Ventures | Research | Taxes & FinancesDate:
U.S. Department of Education Office for Civil Rights Title IX Investigation into Western California University (May 8, 2025)
U.S. Department of Education’s Office for Civil Rights (OCR) announced the commencement of a Title IX investigation into Western California University based on allegations that the University refused to comply with Title IX and “ensure sex-separated intimate spaces in federally funded institutions of higher education.” OCR states that it received credible reports that the University did not make changes based on President Trump’s Executive Order and “allowed a male to room with a female in a girls’ dormitory” and that the University “opened an investigation against a female student asking for a male student to leave a female locker room.”
Topics:
Endowments & Gifts | International Ventures | Research | Taxes & FinancesDate:
Transparency Regarding Foreign Influence at American Universities (Apr. 23, 2025)
Executive Order “Transparency Regarding Foreign Influence at American Universities.” This Order seeks to “end the secrecy surrounding foreign funds in American educational institutions, protect the marketplace of ideas from propaganda sponsored by foreign governments, and safeguard America’s students and research from foreign exploitation.” The Order appoints the Secretary of Education to take all appropriate actions to enforce the requirements of section 1011f of Title 20, U.S.C. to require complete and timely disclosure by higher education institutions of foreign funding, including: (1) reversing or rescinding any actions by the prior administration that permit higher education institutions to maintain improper secrecy regarding their foreign funding; (2) require universities to more specifically disclose details about foreign funding, including the true source and purpose of the funds; (3) provide the American people with greater access to information about foreign funding to higher education institutions; and (4) hold accountable higher education institutions that fail to comply with the law concerning disclosure of foreign funding by way of conducting audits and investigations where necessary to ensure compliance. The Order states that Federal grant funds will not be provided in cases of noncompliance. The White House also issued a Fact Sheet with the Order.
Topics:
Endowments & Gifts | International Activities | Taxes & FinancesDate:
U.S. Department of Education Issues Records Request to Harvard University (Apr. 17, 2025)
The U.S. Department of Education (the Department) sent a records request to Harvard University following a review of the University’s foreign reports, that revealed allegedly incomplete and inaccurate disclosures. To verify compliance, the University must produce within thirty calendar days: (1) a complete and accurate copy of its procedures to achieve compliance with Section 117; (2) a list of all foreign gifts, grants, and contracts from or with foreign sources; (3) the identities of all known parties involved in each of the University’s foreign source gifts; (4) all records regarding or referencing gifts or contracts between the University and foreign governments, without limitation; (5) all records relating to expelled foreign students or foreign students who have had their University credentials canceled from January 1, 2016, through the present; (6) a list of any electronic mail usernames known by Harvard or its personnel to have been utilized by such foreign students; (7) a list of all University personnel with responsibilities relating to the facilitation of the expulsion of foreign students or foreign students who have had their University credentials canceled from January 1, 2016, through the present; (8) a list identifying all full or partial funding sources and amounts for any research conducted by foreign expelled students; and (9) a list of all visiting or temporary researchers, scholars, students, and faculty at the University who are from or affiliated with foreign governments.
Topics:
Contracts | Employment of Foreign Nationals | Endowments & Gifts | Faculty & Staff | Grants, Contracts, & Sponsored Research | Immigration | International Students | International Ventures | Research | Taxes & FinancesDate:
ACE Urges Changes to Foreign Gift Reporting Bill Passed by U.S. House of Representatives (Mar. 31, 2025)
The American Council on Education (ACE) and several other higher education associations urged lawmakers to revise the “Defending Education Transparency and Ending Rogue Regimes Engaging in Nefarious Transactions” (DETERRENT) Act, which passed the House of Representatives on March 27, 2025. ACE sent a letter to House leadership on March 25, 2025, outlining concerns with the DETERRENT Act, which it avers would dramatically expand foreign gift reporting requirements for colleges and universities by lowering the threshold for reporting foreign gifts and contracts from $250,000 to $50,000—and to $0 for “countries of concern.” Concern is also expressed for the legislation’s intent to (1) ban institutions from signing contracts with countries of concern unless the secretary of education grants a waiver, (2) require some institutions to maintain public-facing databases listing foreign gifts and contracts to individual researchers, (3) mandate that certain private colleges report foreign investments or holdings, and (4) impose steep new penalties for noncompliance, some tied to eligibility for federal student aid.
Topics:
Contracts | Endowments & Gifts | Grants, Contracts, & Sponsored Research | Taxes & FinancesDate:
Defending Education Transparency and Ending Rogue Regimes Engaging in Nefarious Transactions Act Amendment (Feb. 19, 2025)
The U.S. House Committee on Education and Workforce advanced an amendment (the “Bill”) to the Defending Education Transparency and Ending Rouge Regimes Engaging in Nefarious Transactions Act (“DETERRENT Act”). The Bill, which would require colleges and universities to report gifts and contracts from most foreign countries moved forward on February 19. It is intended to mitigate foreign influence in higher education would reduce the current threshold of $250,000 to $50,000 or greater. The Bill would also lower the reporting threshold to $0 for “countries of concern” as determined by the U.S. Code or the U.S. Secretary of Education, including China, Russia, Iran, and North Korea, and would prohibit postsecondary institutions from contracting with those countries unless the Secretary issues them an annual waiver.
Topics:
Contracts | Endowments & Gifts | Grants, Contracts, & Sponsored Research | International Activities | Taxes & FinancesDate:
Letter from 25 Attorneys General to Columbia University Regarding Potential Divestment (Oct. 23, 2024)
Letter to Columbia University from twenty-five Attorneys General encouraging the University to resist demands to divest from Israel. The Letter “commend[s] [the] University for its [prior] decision … to not divest from Israel” and urges it to “maintain that position.” The Letter cites a similar letter previously sent to Brown University, wherein the authors asserted that divestment “could trigger laws in nearly three-fourths of States prohibiting [them] from associating with entities that discriminate against Israel, Israelis, or their business partners.”
Topics:
Endowments & Gifts | Public Private Partnerships | Taxes & FinancesDate:
Douglas v. The President & Fellows of Middlebury Coll. (Vt. Super. Oct. 3, 2024)
Opinion and Order granting in part and denying in part Defendant’s Motion for Summary Judgment. Plaintiff, the administrator of the estate of the former Governor of Vermont, brought claims of breach of contract, and unjust enrichment challenging Middlebury College’s decision to remove the Mead name from their campus chapel. In 1914, former Vermont Governor John Mead provided Middlebury College with the financial resources to build a chapel on its campus, which the College named the Mead Memorial Chapel. A century after Governor Mead’s passing, the College decided to remove the Mead name from the chapel. Plaintiff, the appointed special administrator for former Governor Mead’s estate, sued the College, alleging breach of the contract between the College and Mead, which included an alleged name condition. The College argued the chapel was a gift, that there is no name condition-subsequent attached to the gift, and that Mead’s intentions were donative in nature. The court, unable to determine whether the 1914 transaction falls into the category of a contract or a gift, held that the issue must be determined on the evidence at trial. The court found the College entitled to preliminary summary judgment because any naming condition is unenforceable if the transaction is determined to be a gift at trial. However, if the lower court finds the existence of a contract, questions remain as to whether the contract includes terms requiring the chapel to retain the name “Mead Memorial Chapel” in perpetuity. The court dismissed plaintiff’s unjust enrichment claim in light of plaintiff’s inability to demonstrate the retained benefit the College is receiving from the name change. In denying summary judgment related to the claim for breach of good faith and fair dealing, the court held that the jury must first resolve the question of fact as to whether the transaction was a gift or a contract.
Topics:
Endowments & Gifts | Taxes & FinancesDate:
Pearson Foundation v. The Univ. of Chi. (N.D. Okla. June 5, 2024)
Memorandum and Order granting Defendant’s Supplemental Motion for Partial Summary Judgment. Plaintiff, the Thomas L. Pearson and Pearson Family Foundation, brought contract and breach of duty of good faith and fair dealing claims against the University of Chicago, alleging that the University had not fulfilled its obligations in staffing an institute the Foundation had committed $100 million to create. The University counterclaimed for failure to make a $13 million installment when due. The Foundation objected, in particular, to the University’s designation of current faculty for two of three endowed chairs, asserting they were unqualified. The court previously partially denied summary judgment without prejudice, holding that the Foundation could pursue the contract claim on the grounds that the hires did not fulfill the institute’s mission, even though the Grant Agreement included no specific qualifications for the appointments and provided that the Foundation no role in the selection process or in setting the institute’s research agenda. In a surreply to the University’s supplemental motion for partial summary judgment, the Foundation objected that discovery suggested that the University departed from its normal faculty hiring procedures. In granting the motion, the court held that the Foundation had abandoned its express contract claim in its briefing but may still proceed on its good faith and fair dealing claim as to the hiring process.
Topics:
Contracts | Endowments & Gifts | Taxes & FinancesDate:
Hartke v. Bonhams & Butterfields Auctioneers Corp. (S.D. N.Y. Dec. 11, 2023)
Memorandum Opinion & Order granting Defendants’ Motion to Dismiss. Plaintiff is the niece of Father Gilbert V. Hartke, a priest of the Dominican order who taught drama at the Catholic University of America until he died intestate in 1986. She, in her individual capacity and on behalf of Father Hartke’s estate, sued the University and its auctioneers, asserting rights to a “blue pinafore dress with a white blouse, which had been worn by Judy Garland when she appeared as Dorothy in The Wizard of Oz film” that had been given to Father Hartke and that was “discovered” in 2021 “in a storage location” on the University’s campus among other items that had belonged to him. In granting dismissal for lack of standing, the court held that plaintiff did not plead facts sufficient to show that she was the real party in interest, noting that Father Hartke had taken a vow of poverty at his ordination in 1933 whereby he renounced his salary and temporal goods in favor of the Dominican order, that the only item listed in the inventory of his estate during probate proceedings was the right to publicize his name, and that plaintiff had shown no basis for her now to assert a claim on behalf of the estate.
Topics:
Endowments & Gifts | Taxes & Finances
NACUA Annual Conference
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