AGB Policy Alert: Executive Order on Foreign Funding Transparency

A newly issued Executive Order requiring greater transparency of foreign funding in U.S. higher education underscores intensifying federal scrutiny on the influence of international sources on academic institutions. The order signals a renewed and more active enforcement of Section 117 of the Higher Education Act of 1965 that has a higher priority than that of the last administration.

The policy aims to expose concealed foreign financial relationships, protect national security, and uphold the integrity of the American higher education system. While the secretary of education must now implement this order and lay out the specific steps for compliance, the implications for governing boards are significant—prompting a need for renewed vigilance in compliance, enhanced internal disclosure protocols, and close coordination with legal and governmental affairs.

What the Executive Order Mandates

• Enforcement of Section 117 of the Higher Education Act (20 U.S.C. § 1011f) requiring disclosure of foreign gifts/contracts over $250,000, including by the U.S. Department of Education working with the attorney general.
• Detailed and transparent reporting of the true sources, purposes, and terms of foreign funding.
• Reversal of prior administrative actions that limited disclosure of foreign contributions.
• The secretary of education and attorney general to audit, investigate, and enforce compliance.
• Prospective certification and compliance with disclosure laws as a condition for eligibility to receive federal funding.

Key Implications for Governing Boards

This policy change reasserts federal transparency requirements with respect to foreign influence in education, with direct consequences for institutional governance and fiduciary oversight:

• Legal and reputational risks increase if institutions fail to report or mischaracterize foreign gifts. Boards must ensure transparency and due diligence.
• Institutions that cannot demonstrate good-faith compliance may risk eligibility for federal funding and face public or governmental scrutiny.
• Expanded audit authority introduces new compliance demands, necessitating updated systems for tracking, validating, and reporting all foreign-sourced funds.
• Boards must anticipate and prepare for how this order could affect global partnerships, research collaborations, and philanthropic engagement.

Strategic Recommendations for Governing Boards

To meet the evolving compliance and accountability expectations, AGB recommends the following actions for governing boards:

• Review and update institutional policies and systems for foreign gift tracking and reporting to ensure full compliance with Section 117 and related guidance.
• Partner with legal counsel to audit existing disclosures and assess exposure to enforcement risks.
• Strengthen governance protocols for overseeing institutional engagement with international partners, especially in research and fundraising contexts.
• Ensure that boards receive regular briefings on foreign funding activity and potential policy developments from senior leadership.
• Reaffirm a commitment to institutional integrity, national security, and academic independence while safeguarding the institution’s global mission and values.

Questions for Governing Boards to Consider

• Do we have a clear and accurate process for identifying and reporting all foreign gifts and contracts?
• Are we confident in the transparency and integrity of our institution’s foreign partnerships and funding arrangements?
• How are we training trustees to understand and oversee foreign influence risks?
• What proactive steps are we taking to align compliance with institutional mission and strategic priorities?

Call to Action

This Executive Order marks a critical inflection point for how American higher education publicly reports on and acknowledges its engagement with the global community. While transparency requirements may present short-term challenges, they also offer an opportunity for boards to strengthen oversight, rebuild public trust, and reaffirm core values. Governing boards must lead with clarity, commitment, and strategic foresight to ensure their institutions remain both globally engaged and domestically accountable.