- The Foundation relies mostly on investment income to pay for its operation.
- The plan ensures that 100 percent of gifts are deposited into the accounts for which they have been designated. If a donor makes a $1,000 gift, $1,000 is deposited into the appropriate account.
- The Foundation receives no state or university funding.
- The Foundation’s average cost of raising a dollar from 2010 to 2014 was 10.7 percent, well below the national average.
Foundations use many formulas to cover their operating expenses, Some charge a percentage of each gift; others place all gifts in a separate account for six months, using the investment income for operations. Many university foundations are part of their university and receive a fee or stipend from the institution.
Source of UW Foundation Operating Funds
Institutional Advancement Fee
An amount equal to one percent of the invested assets of each endowment fund is annually allocated to the Foundation operating account. The allocation is made quarterly at a rate of 0.25 percent of the prior quarter’s fair market value. This fee is the primary source of revenue to fund the Foundation’s general operations, which includes development, stewardship, gift services, IT finance and human resources. This type of fee on endowment assets is common among public university supporting foundations and is below the median of peer institutions. This fee has been at 1% for decades now.
Income from Callable Pool funds
We calculate monthly callable funds account earnings by crediting all gifts received on the last day of each month and charging all disbursements as paid on the first day of each month. The income earned on the “float” goes into the Foundation’s unrestricted earnings account.
Direct charges to funds
The Foundation allocates direct fundraising expenses to the funds for which the expenses are generated and for whom the fundraising efforts are directed. Those expenses include those necessary to promote fundraising efforts and include items such as publications specific to various units on campus. The salary and benefits for development directors are generally paid from the Foundation’s general operating budget as well as through a partnership with the schools and colleges at the university.
Unrestricted gifts made specifically for the Foundation
Occasionally, donors make a gift to support the operation of the Foundation.