Endowment and Gift Fee
One DSU
The DSU Foundation staff work closely with university leaders; however, the Foundation is an independent, not-for-profit organization that is legally independent from the University. The Foundation is the primary fundraising organization that raises private funding for the university and ensures that gifts are utilized with donor-intent. The Foundation also ensures funds are managed with integrity so the University, and its students, will benefit from them for generations to come. The Foundation exists solely for the benefit of DSU as it continues to RISE.
DSU Foundation Operating Budget
The DSU Foundation has an operating budget around $1.5 million annually. The funding for operations come primarily from the following sources.
- Annual Endowment Fee | The DSU Foundation assesses an annual fee of 1.5% on the endowment market value.
- Reinvestment Fee | The DSU Foundation assesses a one-time reinvestment fee (otherwise known as a “gift fee”) of 5% on all restricted, non-endowed gifts.
*Restricted donations are gifts given to a non-profit with donor-directed specifications on spending.
All DSU Foundation staff are employed by the State of South Dakota through Dakota State University. Salaries and benefits are funded by the university in support of the foundation. Additionally, there are some annual allocation dollars available from the school that are dependent on enrollment that year.
*Additional services such as technology support, marketing, etc. are provided by the university and available to the DSU Foundation at no cost, which helps to reduce operational need.
The DSU Foundation receives investment income from rental properties and short-term investments.
Unrestricted contributions are used at the discretion of the Foundation.
*Priority for utilization of these gifts begins with scholarship support and then pivots to operational assistance.
To Fee, or Not to Fee.
The Purpose of Assessing Fees
To build a sustaining culture of philanthropy, without increasing reliance on university funding, the Foundation must grow operational income. These reinvestment fees allow the Foundation to focus on raising funds for Dakota State’s needs rather than focus solicitation strategies on unrestricted giving for operational support. Dakota State’s philanthropic needs and priorities continue to grow, which means the DSU Foundation has an ever-increasing need to perform and solicit that support. Growing and sustaining that ability to secure private funding is critical to success for the university, to keep DSU RISING.
Industry Standards
While they vary depending on the institution and funding model, fees on endowments and restricted giving are standard withing fundraising operations across foundations for higher education. For example, nearly every four-year institution in North and South Dakota assesses an endowment fee (ranging from 1.4% - 2%) and, additionally, most assess a reinvestment fee on certain gifts.
The Foundation is committed to being within or below industry standards for fees to keep philanthropic support going where it is intended: Dakota State.
Revenue Not Included in Reinvestment Fee/Exemptions:
- Endowed contributions
- Unrestricted dollars