Development Support Fee

The Development Support Fee is a 5 percent fee on all gifts made on or after July 1, 2013. The fee is split between the LSU Foundation, which retains 3 percent of the gift for its development efforts, and the beneficiary, which retains 2 percent of the gift for its dean- or director-level development fund. If the gift is to an endowed account, the fee will be drawn, over a period of one or more fiscal years, from future spending allocations for that account. The dollar amount collected will not exceed 50 percent of the spending allocation for a given year.

What is the purpose of the Development Support Fee?

The Development Support Fee provides working capital to fund immediate needs and/or special projects of the college(s) and/or unit(s) that each donor supports, and it assists the LSU Foundation in raising private dollars for scholarships, faculty support, facilities and similar initiatives.

Why does the LSU Foundation need more money for its operations?

Through increased private philanthropy, LSU can reduce its dependence on state dollars. The Development Support Fee is a mutually beneficial solution for the LSU Foundation and LSU and will play a critical role in preparing for LSU’s statewide capital campaign.

What are the LSU Foundation's "overhead" costs?

The LSU Foundation fully or partially funds more than 40 development officers who raise money for their respective units. Additionally, the LSU Foundation provides a range of development support services to LSU, including guiding fundraising efforts, accounting, auditing, disbursing funds on behalf of beneficiaries, processing and receipting gifts, leading the university’s annual giving program, complying with IRS regulations, investing endowed and non-endowed funds, managing a donor database, researching giving opportunities, and supporting the campus’s development communications, donor relations and stewardship efforts.

Why is the Development Support Fee an appropriate way to increase 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. Eduventures, a leading higher education research and advisory firm, reports that 72 percent of public institutions that raise $25 million or more annually in philanthropic support have a gift fee. Among the institutions with gift fees similar to that of the LSU Foundation are 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), 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).

What are the other ways that the LSU Foundation self-generates revenue?

The majority of the LSU Foundation’s operations are supported through self-generated revenue, including the earnings on non-endowed funds, the Foundation’s 1.25 percent Investment Management Fee on endowed accounts, and contributions from LSU Foundation members.

Are there any exemptions?

The Development Support Fee is applicable only for charitable gifts. The following non-charitable gifts are, therefore, exempt: the premium portion of gifts (e.g., the cost of dinner at a ticketed fundraising event) and state matching funds (e.g., the Board of Regents Support Fund for the chair and professorship programs). Life insurance premiums and related pledge payments are exempt, as are planned gifts that were documented (including the purpose of the funds) with the LSU Foundation prior to July 1, 2013.