Section 37. (a) As used in this section, the following words shall have the following meanings unless the context clearly requires otherwise:

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”Foundation”, an organization which is (a) either (i) a corporation within the meaning of clause (c) of section two of chapter one hundred and eighty and subject to the provisions of said chapter one hundred and eighty, except as herein provided, or (ii) a public charitable trust constituted and operating as such and subject to the requirements of law governing such trusts, except as herein provided; (b) organized and operated exclusively for the benefit of an institution of public higher education; and (c) certified by the board of trustees of the institution which it supports to be operating in a manner consistent with the goals and policies of the institution.

”Institution”, a public institution of higher education in the commonwealth.

(b) A corporation or trust which is not certified as provided herein or whose certification has been revoked by the board of trustees of the institution which it supports, shall not use the name of such institution (i) for fundraising without written permission of the board of trustees of such institution, or (ii) in the name of such corporation or trust.

(c) Each foundation shall have a governing board to oversee its operation. In no event shall institutional trustees and employees constitute one-half or more of the voting members of such foundation’s governing board. The governing board of such foundation shall annually file a list of the members and officers of such board with the institution’s board of trustees.

(d) The board of trustees of an institution which a foundation supports is authorized to permit the use without compensation of facilities and personnel services of the institution by the foundation; provided, however, that in no event shall an employee of the institution spend more than twenty-five percent of his work hours engaged in services for a foundation.

(e) All gifts from a foundation to an institution shall be approved for acceptance by the board of trustees in accordance with applicable institutional policies. A person soliciting funds or any other thing of value on behalf of a foundation from a person, firm, corporation or other entity shall, at the time of the solicitation, clearly and conspicuously disclose to the potential donor that the donations are to be provided to the foundation and not to an institution and that the donor may request in writing that the donor’s identity not be publicly disclosed.

(f) Each foundation shall provide an annual report of its financial accounts prepared in accordance with generally accepted accounting principles to the board of trustees of the institution which it supports. The board of trustees may require any supplemental data relative to the operations of the foundation. The identity of donors who wish to remain anonymous shall be protected and anonymity of such donors shall be maintained in all audit reports. The annual financial report when received by a board of trustees shall be considered a public record as defined in clause twenty-sixth of section seven of chapter four.

(g) The state auditor shall have the authority, upon request by the institution or upon his own initiative, to audit transfers to or expenditures from foundation accounts of public funds, use of employees paid with public funds to staff the foundation and the existence of contracts or agreements between a foundation and an institution.

(h) A foundation certified by an institution’s board of trustees under the provisions of this section shall not be deemed to be an agency, board, bureau, department, division, commission, authority or other subdivision of the commonwealth. Members of the governing boards of a foundation who are not already state employees shall not be considered to be state employees for the purposes of chapters two hundred and sixty-eight A and two hundred and sixty-eight B.