Development Support Fee
What is the Development Support Fee?
The Development Support Fee is a 5 percent assessment on all restricted and endowed gifts made on or after January 1, 2016 to the Pennington Biomedical Research Foundation. For endowed gifts, the 5 percent fee will be drawn from the spending allocation of each endowed account set up on or after January 1, 2016. The dollar amount collected will not exceed 50 percent of the spending allocation for a given year; in many cases, this will mean that the 5 percent fee is collected over the course of multiple fiscal years.
The development support fee is not assessed on unrestricted gifts, such as gifts to the Annual Fund for Excellence or The Answer special event.
Why is the Development Support Fee important to Pennington Biomedical?
Building and sustaining a solid base of philanthropic support for the ongoing research needs of the Pennington Biomedical Research Center has never been more paramount, given prior funding reductions on a Federal and State level. The Development Support Fee allows the Foundation to invest resources necessary to maintain and expand its fundraising capabilities in furthering its mission of providing increased philanthropic support to the Pennington Biomedical Research Center.
What are the Pennington Biomedical Research Foundation’s current sources of revenue?
Unlike many of its peer institutions, the Pennington Biomedical Research Foundation’s development operations are not financially supported by Louisiana State University/Pennington Biomedical Research Center. All revenue is self-generated, primarily from the earnings on non-endowed funds, the Foundation’s 1.25 percent endowment management fee, and unrestricted contributions.
What are the Foundation’s “overhead” costs?
The Pennington Biomedical Research Foundation provides a range of development support services for the Pennington Biomedical Research Center, including leading all fundraising efforts; budgeting, accounting and auditing of restricted/endowed funds; processing and receipting of gifts; complying with IRS and state regulations; investing endowed and non-endowed funds; managing a donor database; and supporting development communications, donor relations, and stewardship efforts.
Why is a Development Support Fee the best way to generate revenue?
The productivity of the Development Support Fee recognizes that fundraising has a cost; directly reflects the success of fundraising efforts; effectively distributes costs proportionately; is easy to understand and calculate; and is reliable. The Council for the Advancement and Support of Education’s fiscal year 2013 Institutionally Related Foundations Data Book reports that 41 percent of the institutions surveyed have a gift fee of some kind, with a median of 5 percent. Among the institutions with gift fees similar to that of the Pennington Biomedical Research Foundation are UCLA (6.5 percent), California State University Long Beach (6 percent, including 1 percent for the campaign fund), Southern Illinois University Foundation (6 percent), University of California at San Diego (6 percent), Louisiana State University Foundation (5 percent), Mississippi State University Foundation (5 percent), North Carolina State University (5 percent), Oklahoma State University Foundation (5 percent), Texas A&M Foundation (5 percent), and University of Florida Foundation (2.5 percent).
Are there any exemptions to the Development Support Fee?
The following gifts are exempt from the Development Support Fee:
- Unrestricted gifts
- Gifts made prior to the policy effective date
- Payments received on pledges made prior to the policy effective date
- Non-cash gifts (in-kind gifts) that are not sold/liquidated by the Foundation
- A gift from a corporation or foundation if verification is provided that a gift fee is prohibited by donor policies or guidelines