SENIOR MANAGEMENT TRAVEL ENTERTAINMENT AND FUNDRAISING

Q. Why do chancellors and other senior administrators seem to spend so much of their time on “outside” activities – traveling, fundraising, wining and dining people, etc. – shouldn’t they be focusing primarily on campus and systemwide matters rather than all these external activities?

A. As part of their jobs, presidents and chancellors play many roles – CEO, faculty member, international diplomat, advocate, fundraiser, etc. – all of which are vital to maintaining the University’s ongoing success, prominence, and contributions to society. These responsibilities necessarily involve extensive travel; many ceremonies, receptions, community events, and other meetings; entertaining; and other kinds of activities that help raise needed funds and help build and maintain relations with important UC constituencies, such as business and community leaders; state, national and international governmental officials; current and prospective faculty, staff, and donors; students and their families; and alumni. During their work day, they serve both as the CEO of the campus and as the mayor of a big “educational city”, overseeing numerous complex operations as varied as a police department, a medical center, a sports enterprise, a recreation and open space preserve, a research center, and all other services needed to sustain a daytime population of 30,000 to 50,000 or more. In sum, being a UC chancellor is a job and a life.

Q. Are travel, entertainment, etc. expenses considered compensation, benefits, or taxable income for the president or chancellors?

A. These are official business expenses paid for by the University and they generally do not represent compensation or benefits, under either UC policy or the Internal Revenue Code. For purposes of comparisons with other universities, UC internally defines some of these expenditures as perquisites, such as club memberships, housing and automobile allowances, and the appropriate portion, if any, that represents taxable income to the employee is included in their W-2.

It should also be noted that many of these expenses are not paid for with State funds. The State has a long-standing practice of not funding certain University expenses, such as the maintenance of chancellors’ facilities, and development and fund-raising activities. Accordingly, many of these expenses are paid for by money from the Edward F. Searles Fund, established in 1919 as an unrestricted gift to the University by Mr. Searles to be used to finance the general purposes of the University which cannot be covered by State funds.

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