Editorial: Braun’s order that state foundations file fiscal reports is win for public

Kudos to Gov. Mike Braun for signing an executive order Tuesday that requires the nonprofit fundraising arm of the Indiana Economic Development Corp. to disclose years of missed annual financial reports.

The move means the Indiana Economic Development Foundation will have to make public details about its assets, spending, revenue and more over a period during which IEDC officials have regularly denied requests for information about who was donating to the fund and how the money was being used.

“If organizations like the Indiana Economic Development Foundation were created to assist state agencies with public business, then Hoosiers need full transparency into how these non-profits operate, who funds them, and what they do with the money,” Braun said in a news release about the executive order.

We completely agree.

In 2005, the Legislature authorized the Indiana Economic Development Corp.—then a brand-new agency—to create a foundation to solicit and accept private-sector gifts and donations that could be used to help the state agency carry out its job-creation mission. The existence of the foundation—which raised money at least in part to fund trade trips—is what led public officials then to refer to the IEDC as a quasi-public agency.

State law also requires the foundation to report details about its financing to the bipartisan State Budget Committee annually. And as a nonprofit, the foundation was required to file a federal Form 990—a public tax document—with the Internal Revenue Service annually.

That happened for several years, including the time in which IBJ Publisher Nate Feltman led the IEDC. But in 2012, the foundation sought and received an exemption from filing the Form 990, saying that as a government-affiliated foundation, it needn’t file the report.

Then some five or six years ago, the foundation stopped filing reports with the State Budget Committee, as well. During that period, it also declined to release information about its donors to the public.

For years, there has essentially been no public accounting of who was funding the foundation, how the foundation was spending its money, whether it was paying anyone or how much it had in assets—even though the foundation’s sole purpose is to serve a taxpayer-funded agency.

Braun’s order not only directs the Indiana Economic Development Foundation to begin filing both an IRS Form 990 and the reports to the State Budget Committee, it also orders the group to submit any past state reports and Form 990s it has missed for the past 10 years, even if it had received an exemption from doing so.

Braun also ordered the Indiana Economic Development Corp. to post those reports on its website “for Hoosiers to read for themselves.”

The order also applies to other nonprofits that have been created to assist state agencies, including the Healthy Hoosiers Foundation, the Indiana Destination Development Foundation and the Indiana State Museum Foundation. The executive order notes that all other state-affiliated foundations have been filing Form 990s.

Thank you to Braun for moving to make state government organizations more transparent, and we encourage him to use a similar approach as he faces future public records issues.•

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