Reinvestment Fee
To the friends of SDSU:
The Foundation is dedicated to providing South Dakota State University with the most financial resources possible. We are committed to raising the funds necessary to fulfill SDSU’s vision for scholarships, programs and new and renovated buildings.
Since its formation in 1946, the Foundation has provided 100% of a gift to support the purpose designated by the donor. The rising cost to process and administer gifts and the expectation of greater transparency to our donors has prompted our Board of Governors to adopt a 5% reinvestment fee, effective January 1, 2011. This fee – which applies to all gifts, except those designated for a capital project or an endowment – is reinvested to sustain the university’s fundraising capabilities.
Fees of this nature have become increasingly common with charitable organizations; the 5% is either equivalent or less than the amount assessed by foundations at our peer institutions. This decision was made after a great deal of research and input from the university.
The reinvestment fee will help to ensure the long-term strength of the Foundation, which is building a broader philanthropic community to support our university.
We remain committed to our mission of providing the maximum amount of revenue possible to support our university. We are proud of the fact that 95 cents of every $1 gifted to SDSU for annual scholarships and programs goes to that purpose, while only 5 cents of every $1 is used to help carry out our development, administrative and legal obligations.
We invite you to learn more by accessing our Frequently Asked Questions. Please direct any questions or concerns to my attention at (888) 747-7378 or info@sdsufoundation.org.
Sincerely,
Steve Erpenbach
President and CEO
SDSU Foundation
Frequently Asked Questions
With the 5% fee assessed on my $1,000 gift for a scholarship, $950 would be available for my designated purpose. How is the scholarship student impacted? In most cases, other funds, mostly likely from a general scholarship pool, would be used to make sure a full $1,000 is available for the student.
Does it affect the Jackrabbit Guarantee scholarship program? The 5% “reinvestment” fee does apply to scholarships. The Jackrabbit Guarantee promises that eligible students will receive at least $1,000 per year. Again, funds from the general scholarship pool would be used to ensure that a full $1,000 is available to those students.
If I want to continue supporting a $1,000 annual award, can I add a gift to provide for the reinvestment fee? Yes. We are encouraging donors to consider an additional gift to keep the support of the program or scholarship they support at the same level. For someone providing a $1,000 scholarship, they could make a gift of $1,050 ($1,000 for the program + $50 for the reinvestment fee). Again, the full amount is tax deductible. It is voluntary, but donors are asked to consider adding $5 for every $100 gifted.
Does this affect the tax-deductibility of my gift? No. The full amount of the gift is tax deductible.
What gifts are exempt from the reinvestment fee? Any gift to an endowment or a capital project is not subject to the 5% reinvestment fee. The Foundation already has separate fee structures in place to help with the development and administrative costs for those types of gifts. Effective January 1, 2011, the annual endowment fee was reduced from 1.8% to 1.6% to preserve the inter-generational equity of the endowment.
Gifts to capital projects are held in a short-term investment account until progress payments are needed for construction. As a result, a fee is assessed against the building project as funds are disbursed.