When California State University-Stanislaus invited Gov. Sarah Palin to speak at their 50th anniversary gala dinner, whistle-blowers began to question how much the non-profit foundation hosting the benefit was paying the former Alaska governor and whether the foundation was benefiting financially.

According to the Los Angeles Times, the foundation refused to divulge Palin’s fee, raising concerns about how private non-profit foundations associated with fundraising efforts for public universities use their money. Such foundations are often involved in raising money for scholarships, student organizations and other university programs. However, because they are private organizations, they are not subject to the same financial transparency laws that regulate public universities.

Senator Leland Yee (D-San Francisco) is trying to change that by expanding California’s public record laws so that foundations associated with public universities would have to reveal the names of donors who gave more than $500.

"The larger issue is that I believe the state universities have been shifting some of their state responsibilities over to the foundations for the sole purpose of hiding transactions involving millions of dollars from the public,"  said Yee in an interview with the Los Angeles Times.

More than 90 foundations and auxiliary services control $1.34 billion of the 34-campus California State University system’s $6.7 billion budget, while 10 foundations control $4 billion of the 10-campus University of California system’s budget, according to the Los Angeles Times.

"These are nonprofit, charitable enterprises but they are also business enterprises. That's all the more significant in an environment of severely rationed resources," said Terry Francke the general council for a non-profit group that promotes government transparency, Californians Aware.

Gov. Arnold Schwartzenegger vetoed a bill proposed by Yee last year that would have required non-profits to disclose both their donor list and how the organizations used donor funds.

Schwartzenegger and some university officials fear that increasing transparency will significantly decrease the amount of donations the California public university system would receive.

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