Former Gov. Eric Holcomb on a trade mission to Germany and Switzerland funded by the Indiana Economic Development Foundation in 2022. Photo from IEDF.

By Niki Kelly
Indiana Capital Chronicle

INDIANAPOLIS — A secretive state-affiliated nonprofit aiding economic development efforts would have to disclose its funders — retroactively and into the future — under an executive order signed by Gov. Mike Braun Tuesday, April 8.

“If organizations like the Indiana Economic Development Foundation were created to assist state agencies with public business, then Hoosiers need full transparency into how these nonprofits operate, who funds them, and what they do with the money,” Braun, a Republican, said in a news release.

“Today’s executive order mandates that these organizations file financial disclosures — including those missed over the past 10 years — so Hoosiers can have full transparency and accountability,” he continued.

The Indiana Economic Development Foundation operates in conjunction with the controversial Indiana Economic Development Corp., a quasi-public state agency.

Indiana had a traditional commerce agency until 2005, when then-Gov. Mitch Daniels, a Republican, signed into law legislation creating the IEDC. Shortly after, leaders created the corresponding IEDF, a 501c3 nonprofit organization.

The agency and its foundation operate as a public-private partnership.

The foundation has paid for virtually all the international travel for prior governors on economic development trips.

Initially, some donor information was provided. But, in recent years, the foundation has refused to disclose such details.

It does identify some contributors and sponsors on its website, including the state’s “big five” investor-owned utilities: AES Indiana, CenterPoint Energy, Duke Energy, Indiana Michigan Power and the Northern Indiana Public Service Company.

But how much they give is kept secret.

In 2023, the Capital Chronicle found that outside organizations donated nearly $3 million to the foundation over three years. But who the donors are — and how the agency spends their contributions — is largely unknown. State rules don’t require or outright prohibit disclosure of that information.

The groups behind all but two of 16 transactions in records from 2020 through 2022, obtained by the Capital Chronicle, were permitted anonymity. Two didn’t request anonymity: Washington, D.C.-based think tank The Urban Institute donated $5,000 in 2021, and Indiana’s Battery Innovation Center, in Newberry, gave $12,000 in 2022.

The IEDF also said that, because the funds are private donations, how they’re spent isn’t subject to public records rules.

Julia Vaughn, executive director of watchdog group Common Cause Indiana, said the executive order is an acknowledgment that the IEDC and its foundation have, “for many years, operated behind an opaque curtain of darkness that has created distrust of the agency and its actions.”

“This is a positive step to bring much needed transparency to the IEDC and the projects it supports,” she added.

Other Organizations Also Affected

Braun’s release said the state has created numerous nonprofit groups to supplement agencies, like the Healthy Hoosiers Foundation, Indiana Destination Development Foundation, Indiana State Museum Foundation and more.

All government-affiliated non-profits need to file a Form 990 annually with the IRS that describes where their funding sources, how much they brought in, and how the dollars break down between programs and administrative expenses. This form provides Hoosiers with important transparency into these organizations.

But in 2012, the IEDF got an exemption from the IRS for future filings of the form, according to the release.

State-affiliated foundations are also required to file annual reports with the State Budget Committee — which the IEDF has not done since 2019.

Braun directed all state-affiliated foundations to comply with reporting requirements, including filing any previously missed reports from the past decade, by the end of the year. They must additionally file Form 990s annually, even if they have previously been granted an exemption, retroactive 10 years.

The forms “must be clearly posted on the relevant agency’s website for Hoosiers to read for themselves,” the release says.

A New Approach

The governor also signed two other executive orders Tuesday changing Indiana’s approach to economic development.

One is to reassess the economic development regions in the state and better capitalize on regional strengths.

Braun said he wants to spread out economic development efforts geographically, “and one important way we’re doing that is starting from scratch on the map of our state’s economic development regions to better reflect each area’s strengths.”

His order empowers Commerce Secretary David Adams to make recommendations on the redrawing of regional economic development and workforce maps based on an area’s “unique” strengths, assets, workforce capabilities, natural resource and industries.

The second executive order focuses on wage growth and job creation in measuring how effective the state’s economic development strategy is. Those numbers will go in all project proposals and performance reports related to state-supported economic development initiatives.

“Indiana is focusing our economic development efforts on the things that affect your family the most: raising wages and new job opportunities. More jobs, and higher pay: that’s our North Star,” Braun said in the release.

Former Gov. Eric Holcomb’s administration focused on capital expenditure and investment totals.