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Gift fees

  • 1.  Gift fees

    Posted 26 days ago
    Hi all. I encountered a question that stumped me and I was wondering if someone here might know the answer.

    I'm working with an institution that is exploring implementing a "gift fee" that would be levied from endowed gifts to offset the cost of raising and managing the funds. They're considering taking 1% of the endowment earnings each year in order to do this. They asked me whether it is permissible for them to implement this practice not only with future endowments but also with endowments that have already been established.

    I know that many of us have opinions on the practice of implementing gift fees, but my question is really more to do with whether it would be legal and ethical for a university to change its endowment policies globally in a way that would retroactively apply such a fee moving forward. I'd love to hear from any of you with knowledge on the topic, and I'd be particularly interested in hearing from people who have worked at a private institution that implemented gift fees, as I know that instituting such fees is far less common at private universities.

    I welcome any thoughts. I imagine I may get a fair number of private replies, and if so, I will attempt to circle back and let the community know what the general consensus was.

    Thanks!

    Erin Moran

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    Erin Moran
    Director of Product Management
    EverTrue
    erin.moran@evertrue.com
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  • 2.  RE: Gift fees

    Posted 26 days ago

    They would think you'd need to make a change to the endowment policy which would apply to the entire pool. All endowments have fees of one flavor or another – whether it's called a fee or a spending policy. This would just be editing that formula. IMHO.

     

     

    Aaron Forrest CPA

    Senior Director Gift and Donor Services

    University of Rochester Office of Advancement

    585.275.2799 | aaron.forrest@rochester.edu