Advancement Fee Q&A
What is the advancement fee?
The advancement fee is a one-time contribution to help sustain development activities in support of Washington State University’s educational, research and service mission. Beginning July 1, 2017, the advancement fee will be applied to gifts processed by the WSU Foundation to help offset the operations costs related to soliciting, processing and stewarding private contributions.
How does the advancement fee benefit the WSU areas our donors support?
The advancement fee will improve the capacity to grow private giving to Washington State University. To be effective, fundraising requires financial resources to offset direct operating costs related to soliciting, processing and stewarding private contributions. Revenue generated by the advancement fee will help offset these costs and provide the resources necessary to reach out to more WSU alumni, friends, and business partners to encourage philanthropic support for Washington State University.
How will the advancement fee be applied?
Upon receipt of a gift, the Foundation will deduct the one-time advancement fee from the amount gifted. While the fee will have only a minor effect on individual funds, its collective impact will encourage sustained growth in private support across the University.
Effective July 1, 2017, the advancement fee applies as follows:
- 5% on all gifts up to $5 million.
- For gifts greater than $5 million, the advancement fee will apply only to the first $5 million of the total gift. The maximum amount of the advancement fee assessed on a single gift shall not exceed $250,000.
- The advancement fee will not apply to gifts and pledges processed before end of business on June 30, 2017.
Is the advancement fee charged in addition to my donation?
Not at all. The advancement fee is automatically deducted from the amount you choose to donate. You are not expected to increase your gift amount to pay the fee, although some may choose to do so. Five percent of your total gift will support fundraising programs across Washington State University, and 95 percent will directly benefit the WSU program you chose to support. You will receive full donor credit and tax credit for 100% of your total donation.
Do other universities have an advancement fee?
About 75 percent of peer institutions with endowment assets below $1 billion apply a similar fee, with those fees generally ranging between 4 and 10 percent.
Does the advancement fee affect tax deductibility of contributions?
The fee does not affect the tax deductibility of gifts and you will receive full credit for the total contributed amount.
Does the fee apply to gifts to endowed funds?
Yes. Beginning July 1, 2017, the advancement fee applies to gifts and pledge commitments made to establish or contribute to endowed funds. It does not affect donor recognition or naming opportunities and donors will receive full credit for the total contributed amount.
Does the advancement fee apply to pledge payments?
For pledges processed on or after July 1, 2017, payments will be assessed the advancement fee. For pledges processed before the close of business on June 30, 2017, payments are not subject to the advancement fee until that pledge is fulfilled.
What about gifts made by credit card or gifts of stock?
The advancement fee applies to gifts made by credit card and gifts made by transfer of stock or securities. To simplify these transactions for our donors and to benefit the WSU area where these gifts are designated, the WSU Foundation will absorb any credit card processing fees assessed for those credit cards processed by the Foundation, as well as any processing fees associated with the transfer of stock or securities.
Does the advancement fee apply to recurring automatic contributions (credit card, EFT, payroll deduction, etc.)?
Yes. The advancement fee will apply to all recurring gifts established on or after July 1, 2017. For recurring gift payment plans established before July 1, 2017, the following will apply:
- Recurring gifts that are continuous – no end date/amount: The advancement fee will apply to each gift transaction that occurs on or after July 1, 2017
- Recurring gifts with a stated end date/amount: These are payments on an existing pledge. As such, the advancement fee does not apply to payments on an existing pledge started on or before June 30, 2017.
Will the donor be able to create the endowment with a gift of the minimum amount?
Yes. Endowment minimums are based on the donor’s total gifted amount, and not the amount invested net of the advancement fee. For those endowments established on or after July 1, 2017, the market value of the fund at inception will be net of the 5% advancement fee, but the donor will receive full credit for the total contributed amount and the endowment will be established. More information about creating an endowment can be found here.
What about matching gifts?
Yes. The advancement fee does apply for matching gifts.
Does the advancement fee apply to in-kind, non-cash, or real estate gifts?
If an in-kind, non-cash or real estate asset is sold and the net proceeds benefit WSU, then the advancement fee will be collected from the net proceeds received in the sale of that item. If the in-kind contribution or service is not sold then the advancement fee will not apply.
Can the advancement fee be waived?
The advancement fee cannot be waived, but there are specific instances where the advancement fee will not apply. Gift revenue received from the Cougar License Plate program is exempt. This fee will not apply for a private foundation that has a written policy stating it will not pay gift fees. An advancement fee will not be applied to non-cash gifts (in-kind, service, real estate) that will not or cannot be sold. Any payments for pledges established on or before June 30, 2017 will also be exempt from the advancement fee.
Can a donor increase their gift amount to cover the advancement fee?
Yes. A donor may choose to increase their gift amount to offset the advancement fee to ensure that more of their contribution is directed to the WSU area they wish to support. Beginning July 1, 2017, gifts made to WSU online will also feature an option to include an additional gift to cover the advancement fee that will automatically calculate the additional 5% contribution needed.