This paper reviews public policy concerns that affect college and university foundations. Such foundations, originally designed to provide a margin of excellence for their host institutions, have today evolved into aggressive fund raisers that support day-to-day operations. The document reviews some of the historical context (cuts in state appropriations, decentralization of federal educational policy) in which these changes are taking place, reviews recent relevant legal, regulatory, and legislative actions, and offers guidelines to foundation boards on how to stay out of trouble. The paper notes that recent public policy affecting university-related foundations points in the direction of greater public disclosure of foundation records. (CH)