What's Happening?
Higher education institutions in the U.S. are navigating a complex landscape as they seek foreign funding amidst heightened regulatory scrutiny and geopolitical tensions. As universities look for new revenue sources, they must contend with the risks associated
with foreign gifts, contracts, and partnerships. These can lead to compliance failures, reputational damage, and national security concerns. To address these challenges, institutions are encouraged to adopt a proactive risk assessment model. This model involves comprehensive background reviews, targeted open-source intelligence research, and identification of intermediaries and beneficial sources. The goal is to ensure responsible fundraising and compliance with evolving federal regulations, such as the Higher Education Act's Section 117 and proposed legislation like the DETERRENT Act.
Why It's Important?
The increased scrutiny on foreign funding in higher education is significant due to the potential influence foreign entities can exert on academic programs and research. U.S. officials have raised concerns about foreign actors using funding to gain access to sensitive research or to shape academic agendas. This has led to a push for more stringent oversight and compliance measures. Institutions that fail to adapt may face legal and reputational risks, while those that implement robust risk assessment models can better protect their interests and maintain academic independence. The proactive approach not only aligns with federal expectations but also supports institutional governance and decision-making processes.
What's Next?
As regulatory oversight continues to expand, higher education institutions will need to enhance their due diligence processes. This includes extending risk assessments beyond federally funded research to encompass all foreign funding streams. Institutions may also need to engage more directly with donors and partners to ensure alignment with institutional values and compliance with regulatory requirements. The evolving landscape will likely lead to increased collaboration between advancement teams, compliance officers, and institutional leadership to create a unified framework for managing foreign funding risks.
