Gift Fee Language for Donors
As a courtesy to our valued donors, we have posted the BTC Foundation Gift Fee Policy.
Q. What is the BTC Foundation’s gift fee?
A. The fee on current use and endowed gifts is our cost of being accountable to you and our other donors. This accountability includes our commitment to provide timely gift receipts, accurate records, expert management of gift funds, and efficient disbursement of gift funds to programs at the College. Unrestricted gifts made to the College are not assessed a gift fee.
Q. How much is the gift fee?
A. As of July 1st, 2011, each current use gift to the Foundation will be assessed a one-time administrative fee of five (5) percent. Endowed gifts will be charged an annual one (1) percent management fee on the fair market value of the endowment at fiscal year end (June 30th).
Q. Why does the BTC Foundation have a gift fee?
A. The gift fee allows the BTC Foundation to reduce its reliance on direct funding for its operations from Bellingham Technical College, thus freeing College funds for education. Gift fee revenue is directly related to the BTC Foundation’s cost of doing business. Effective fund-raising requires deployment of financial resources to cover direct costs of soliciting, processing, and accounting for donated funds. As gifts to benefit Bellingham Technical College increase, the costs of gift receipting, accounting, investment and disbursement increase.
Q. How are operations of the BTC Foundation funded?
A. Foundation operations are funded through a combination of revenue sources including direct support from the College, earnings from vending machine sales, unrestricted gifts and gift fees.
Q. Do other colleges and universities charge gift fees?
A. A gift fee of 2-5 percent is not uncommon at university foundations throughout the country. Community College foundations, especially in States where budget cuts have had a significant impact on operating budgets, are now starting to assess similar gift fees so they can grow the capacity of their fundraising operations to generate revenue for the College.
Q. The local non-profit organizations I support don’t charge gift fees. What’s the difference?
A. The difference is primarily one of terminology. All community organizations have operating costs. In general, revenue from contributions helps in part to support them—whether or not a formal gift “fee” is identified.
In the non-profit sector, best practice standards hold that operating costs in the range of 15-20 percent are considered to be excellent, assuring that approximately $.80 of every dollar contributed goes to providing direct services. By comparison, $.95 to $.99 of each dollar you give to the BTC Foundation gets put to work by the College for the specific purpose you choose to support.
Q. How often does the gift fee change?
A. The BTC Foundation’s Finance Committee reviews the gift fee on an annual basis. The fee structure was initially approved by the Board in June, 2011. In order to assure budgetary and financial stability, it is changed only rarely.
Q. Can the gift fee be waived?
A. If a gift is made by a private or corporation foundation that has a written policy stating it will not pay gift fees, or where the terms of the gift disallow fees or cost recovery, the BTC Foundation will waive the fee.
Q. Does the BTC Foundation charge other fees?
A. Like the vast majority of other foundations, the BTC Foundation charges an annual fee to manage endowed funds that are invested in perpetuity. Because we want to maximize our endowment’s growth over time, we keep this annual management fee to a minimum, currently one (1) percent of the fair market value of the endowment at fiscal year-end (June 30th).
Definitions
Current use gift: a gift intended by the donor to be used for current purposes or programs; a gift that does not exist in perpetuity.
Endowed gift: a gift intended by the donor to be used for restricted purposes or programs; an endowed gift exists in perpetuity through the responsible investment of the principal. From that principal, an annual payout is distributed that is realized from a portion of the investment income allowing the gift’s real value to increase over time.