NCInnovation (NCI), a private nonprofit organization which aims to use taxpayer money to select particular research projects emanating from North Carolina’s public universities for help in commercialization, announced Tuesday the organization surpassed $25 million in private fundraising commitments. In a press release, NCI executives noted pledges from SAS, Pinnacle Financial Partners, and the Huntington Foundation.
The $25 million milestone is significant because that is the magic number statutorily required for NCI to raise through private funds in order to remain compliant with the enabling legislation.
“Some of the most impactful companies in North Carolina and the United States have put funding behind NCInnovation’s mission, and I’m deeply grateful for their support,” said Kelly King, Chair of NCI’s Board of Directors. “Together with the NCInnovation endowment established by the legislature, this public-private partnership will provide the support North Carolina public university researchers need to further develop groundbreaking discoveries.”
NCI, a venture spearheaded by North Carolina business executives, was gifted a total of $500 million in taxpayer money through last year’s biennial state budget, following a full-court press by hired lobbyists.
Originally asking for $1.4 billion to fund the profit-generating endowment, NCI leaders argue too many university research projects wither on the vine due to lack of private venture capital support. They believe taxpayer funds should fill the gap left by the free market. In spreading taxpayer wealth around, NCI hopes to generate returns in the form of home-grown innovation, development, and jobs.
Lawmakers eventually settled on awarding the project two, $250 million tranches over the two years of the budget cycle. Certain metrics are required to be met before NCI receives state taxpayer funds, the $25 million in privately raised capital being one of them. The first $250 million tranche has already been distributed to NCI.
One stipulation to receiving such a large amount of taxpayer money is to adhere to specific accounting methods with regard to the treatment of private donations and pledges. Notably, Tuesday’s announcement is not that NCI has $25 million in private donations in hand, but rather that private donors have made some form of commitment to gifting the nonprofit that money.
The reliability of such commitments can vary, but accepted accounting practices have established some conventional methods to qualify such commitments for proper placement on an organization’s balance sheet. Questions about whether or not NCI has applied the required accounting methods appropriately to private donation pledges have been repeatedly raised by Art Pope, an NCI board member, the Carolina Journal previously reported.
In fact, Pope’s frustrations with NCI executives’ reluctance to share financial details with the board led him to file an official request for an audit with the North Carolina Office of State Auditor (OSA). Carolina Journal reached out to OSA, whose representatives explained the state agency doesn’t not comment on potential investigations.
As NCI awaits the second $250 million tranche of funds from taxpayers, other legislative priorities, such as the expanded Opportunity Scholarship Program, have gone underfunded. Demand for the school choice vouchers exhausted appropriated funds so quickly that applicants that qualified as tiers 3 or 4 — those paying the most taxes as a function of their higher incomes — were out of luck.
State lawmakers are scheduled to return to Raleigh Wednesday to commence the short session, in which budget modifications take center stage.