Indiana Economic Development Foundation releases annual audits at Gov. Braun’s demand

The Indiana Economic Development Foundation has spent more than $13 million on travel, administrative and other costs across six years, according to audited financial reports released Thursday under Gov. Mike Braun’s orders.

The little-known foundation is charged with raising private funds to boost the Indiana Economic Development Corp. But the nonprofit is on a spending freeze.

Indiana had a traditional commerce department until 2005. That’s when, under former Gov. Mitch Daniels, lawmakers created the IEDC: “a body politic and corporate, not a state agency but an independent instrumentality exercising essential public functions,” per Indiana Code. They allowed its board to create a subsidiary: the foundation.

“Everybody always thinks that the tax dollars are going in one direction: they’re going out to nonprofits to subsidize nonprofit activity,” said Indiana University Professor Beth Gazley, a nonprofit management specialist.

“But actually, there’s a lot of money coming back from nonprofits to subsidize government activities,” she continued, noting that the federal definition of a 501(c)(3) tax-exempt nonprofit includes “lessening the burdens of government.”

The IEDC’s furtive efforts to secure water, land and more for a major business park in Boone County have made it plenty of enemies since 2022. But now, its problems go beyond public relations.

Braun said Thursday that he’s ordered a forensic audit of the IEDC’s financing and reported “impropriety, or even the appearance of it” to Indiana’s Office of Inspector General after allegations of self-dealing and more, first reported by political newsletter Indiana Legislative Insight.

And he’s taken aim at the foundation.

In an April 9 news release, his administration called out the foundation for not filing six years of required audited financial reports with the State Budget Committee. Two weeks later, the reports became available online.

A spokesperson for the foundation didn’t immediately answer Capital Chronicle questions, including why those records weren’t submitted.

Reports reveal spending’s focus

The newly released reports show that the foundation spent $13.2 million from the 2019 through 2024 fiscal years, which begin July 1 and end June 30.

The bulk of that, $10.9 million, went to travel, meals and entertainment. Years worth of news releases indicate the foundation has paid for virtually all of the international economic development trips taken by prior governors.

The independent auditor used for the most recent three reports—Indianapolis-based Katz, Sapper & Miller—also included conferences in this category, while the previous one—Missouri’s former BKD—did not.

“Is that a lot of money to be spending on conferences, travel, meals and entertainment? That really depends on the programmatic goals of the organization, the mission of the organization,” Gazley said. “And only the board can decide: is that the best use of our funding?”

The IEDC and its foundation share the same staff and 12-member board.

Gazley also said it’s “best practice” to change auditors over time. Get too “close and clubby” and risk the auditor “not being honest anymore about the financial status of the organization,” she warned.

Another $1.8 million was logged for administrative expenses, plus more than $200,000 for sponsorships.

Nearly $300,000 was categorized as “other” spending. The foundation didn’t immediately answer a question about what kinds of expenditures would fit within that category.

Donor information remains largely under wraps

The reports also disclose about $11.7 million in donations. But they offer no clues as to the identity of those donors. Indiana Code forces the foundation to redact donor names out of public records if they request anonymity at any point in time.

Most do.

The groups behind 14 of 16 transactions from 2020 through 2022 were shielded from records obtained in 2023 by the Capital Chronicle. Two didn’t request anonymity: District of Columbia-based think tank The Urban Institute donated $5,000 in 2021, and the Battery Innovation Center in Newberry gave $12,000 in 2022. Between 2015 and 2025, the center nabbed six incentive contracts that total $18 million, according to the IEDC’s transparency portal.

Battery Innovation Center CEO Les Alexander wrote that the organization has long had a “close working relationship” with the state because it is “THE subject matter expert and (research and development) center for the battery and energy storage industry.”

Its single donation was made to offset expenses when former CEO Ben Wrightman joined previous Gov. Eric Holcomb’s economic development trip to South Korea in 2022, per Alexander. He wrote that the center’s voluntary disclosure of the contribution “should be applauded as an example for other companies or organizations to follow, rather than called out as a conflict of interest.”

Alexander also noted that IEDC funding received by the center “have always been matching grants” and have consistently represented less than a quarter of its revenue.

In the 2023 Capital Chronicle report, spokeswoman Erin Sweitzer wrote that private donations “allow more flexibility in how we use the funds and how quickly we’re able to access them.”

For Gazley, that doesn’t add up.

“I don’t see how you can defend privacy as a programmatic priority, or a mission-related priority. You just can’t,” she said. “But privacy does make a lot of organizations more viable if their donors are concerned about having their (donation) choices on the front page of the newspaper.”

“The kinds of accountability tools that we have for the public with, if I ordered them in priority, transparency would be at the top of the list. And I think it should be at (the) top of everybody’s list,” she added later.

But there are indications of who other foundation givers may be—and evidence several have dealings with the IEDC. Organizations can donate money, sponsor events or provide in-kind services.

AES logged $10 million in professional services contracts that expired in 2023 and about $2.8 million in incentive contracts from 2014, according to the portal, while Duke earned about $150 million in an incentive contract from 2010. Incentives are performance-based, so a recipient may not earn the full amount if its targets aren’t met.

Nine other organizations are dubbed “sponsors” on the webpage. They include Old National Bank, Pure Development, Rolls-Royce, Hoosier Energy, Solv Energy, Doral Renewables, railroad giant Norfolk Southern, workforce development consultant TPMA, and Indiana University’s Ventures startup affiliate.

Pure Development holds a $94.4 million contract for development work. Rolls-Royce received $21,000 after co-sponsoring a Northwest Stadium suite with IEDC for an Army-Navy football match in December and racked up 14 incentive contracts—worth $74.6 million—between 2011 and 2022.

Doral Renewables, meanwhile, is the recipient of two pending incentive contracts totaling $1.5 million. TPMA was recorded as having three service contracts—for almost $190,000—expiring between 2019 and 2025, and two 2015 incentive contracts worth nearly $400,000.

There’s also more information on the way.

Though the foundation secured an exemption from the Internal Revenue Service in 2012 for future filings of the Form 990, Braun has directed it and other state-affiliated nonprofits to file them annually, regardless of any exemptions. The form describes funding sources and amounts, and how much has been spent on programming versus administrative expenses.

All required reports going back 10 years are due by the end of 2025 under his executive order. They must also be “clearly posted” online “for Hoosiers to read for themselves,” according to a news release.

This story has been updated to include comments from the Battery Innovation Center received after publication.