Members of an oversight board have entered discussions with the University of Wisconsin Foundation on how to manage the approximately $20 million fee the foundation kept from a public endowment.

Ben Brancel, chairman of the Wisconsin United for Health Foundation board of directors, said members of the WUHF board raised concerns about the money UW Foundation kept from the funds WUHF gifted to UW School of Medicine and Public Health.

WUHF was created to distribute the proceeds from the sale of shares of Cobalt Corporation between the Medical College of Wisconsin and UW School of Medicine and Public Health and oversees the use of those funds, Brancel said.

“The UW School of Medicine and Public Health and the Medical College of Milwaukee each received about $315 million for Public Health grants to benefit the people of Wisconsin,” said Joe Leean, a WUHF board member, in an e-mail to The Badger Herald.

The UW Foundation charges a 1 percent expense recapture fee on all endowments, said Mike Knetter, president of the UW Foundation. He added the foundation treats all endowments equally and the gift received from WUHF was not an exception to the foundation’s 1 percent charge policy.

Brancel said board members want to see the money accrued from the 1 percent charge – approximately $20 million – used toward its intended purpose.

“We’re discussing with them the charges and how that money will be used for public health,” Knetter said.

Rev. Rolen Womack, a WUHF board member, said board members believe the charge is too high because other similar corporations charge less for their services and UW Foundation did not have to raise the funds on its own.

“There was no justification for it because they didn’t have to raise it,” Womack said. “The money was given to them to manage.”

A recent audit revealed to the WUHF board that UW Foundation kept 1 percent of the funds the WUHF donated to the University of Wisconsin annually in addition to the amount it already charges for its services, Leean said.

Leean added the Medical College of Wisconsin is charged less by the private firm it uses to invest the funds received from WUHF and no additional 1 percent fee is required.

Knetter said the fee UW Foundation charges for handling the money is something every stand-alone foundation charges and enables it to offset the expenses they incur.

Considering UW Foundation is a private organization, the fee is necessary in order to support its infrastructure and maintain its efficiency, Knetter said.

Womack said the WUHF board is concerned about how UW Foundation went about handling the endowment it received, but different members have been proposing different ways of how to resolve the issue.

“Some [members of the board] would argue that it should be paid back, but I don’t believe that it is doable,” Womack said. “I don’t fight battles that I can’t win.”

WUHF has not received a formal response from UW Foundation on the matter, but a response should be received by the end of January, Brancel said.