Assessment and Distribution of the Campus Philanthropic Allocation and Research Administrative Fee

Procedures

Standard Philanthropic Allocation Assessment and Distribution for Non-Research Gifts

The philanthropic allocation is 7.5%. It applies to all cash gifts, including payments on pledges and bequest distributions. For non-cash gifts (i.e., securities), the philanthropic allocation is assessed on the gift value at the date of the donation and deducted from the net proceeds received on the sale of the asset. No philanthropic allocation is assessed on gifts of tangible personal property (gifts-in-kind). Select documented agreements made with donors prior to July 1, 2016 prohibiting the assessment of the gift fee, as it was then known, are to be honored. Information about such agreements is maintained by University Development and Alumni Relations.

The philanthropic allocation is shared between the campus and the unit benefitting from the gift. The Chancellor receives 5%, with 2.5% distributed to a deferred maintenance fund (56909) and 2.5% distributed to a discretionary philanthropic allocation fund (56992) used to support campus advancement efforts. Decisions about the use of the deferred maintenance fund are made by the campus’s Finance Committee. The remaining 2.5% is distributed to a discretionary philanthropic allocation fund (56996) administered by the vice chancellors and deans responsible for the units benefitting from the gifts. This distribution occurs quarterly. In the case of gifts to endowments, the allocation is made when the gift is invested in the general endowment pool.

If more than one vice chancellor or dean benefits from a gift, the philanthropic allocation is split proportionally, provided the proportions are negotiated and documented at the time the fund to which the gift is allocated is established.

Vice chancellors and deans are expected to use their portion of the philanthropic allocation within their division, college, or school to support advancement efforts. This is consistent with the campus’s explanation of the philanthropic allocation to donors.

For campus affiliates, the 2.5% portion of the philanthropic allocation that would generally be distributed to a vice chancellor or dean is distributed to the affiliate director. Affiliates include, but are not limited to, the Cal Alumni Association, International House, The Faculty Club, The Women’s Faculty Club, and the Mathematical Sciences Research Institute.

Gifts for scholarships and fellowships are often administered by the Financial Aid and Scholarships Office or the Graduate Division. However, these units do not necessarily benefit from the gift. If a gift is made for a scholarship or fellowship within an academic discipline, the benefitting unit is the appropriate college or school, and the philanthropic allocation is distributed to the appropriate dean, provided the benefitting unit is identified upon receipt of the gift. If an academic discipline is not identified, the philanthropic allocation is distributed to the Vice Chancellor–Student Affairs (for scholarships) or the Dean of the Graduate Division (for fellowships).

In cases where gifts are to be used at the Chancellor’s discretion, such as those made to the Cal Fund, the Chancellor retains the portion of the philanthropic allocation that would otherwise be distributed to the vice chancellors and deans.

In situations where a donor will not fund the philanthropic allocation and where securing the gift is strategically important to a vice chancellor or dean, the vice chancellor or dean may elect to forgo the 2.5% that would normally be distributed to their DeptID, and use accumulated philanthropic allocation balances to fund the 2.5% that would normally be distributed for deferred maintenance and the 2.5% that would normally be distributed for campus advancement activities. In such cases these portions will be funded from the vice chancellor’s or dean’s philanthropic allocation fund.

In situations where a professionally managed private foundation caps administrative fees, the 2.5% that funds deferred maintenance is distributed first, the 2.5% that funds campus advancement activities is funded next, and the 2.5% for advancement activities in the benefitting unit is funded last. Depending of the cap, all or one of these portions could be funded at less than 2.5%.

Additional information about the philanthropic allocation and the exception process can be found on the campus’s advancement intranet, Eureka, at https://eureka.berkeley.edu.

Standard Research Administrative Fee Asessment and Distribution for Research Gifts

The research administrative fee of 13% is divided as follows:

• 2.5% to fund deferred maintenance;
• 2.0% to support the campus’s research enterprise;
• 1.0% to invest in future research via the Berkeley Futures Grants; and
• 7.5% to cover the costs of the administering unit.

The research administrative fee applies to all research gifts. A gift is considered a research gift when it is designated as funds to support the research of one or more specified faculty members acting as Principal Investigators (PIs) for a specific research project, OR as general research support for a specified PI. PIs receiving such support are required to sign a Conflict of Interest Form (700U). General support for Centers, Institutes, Organized Research Units (ORUs) or similar programs is NOT considered research funding for the purposes of this policy. Funds are classified as research gifts, as distinguished from sponsored awards, including contracts and grants, when the funds are irrevocable, and the donor does not impose contractual requirements; i.e., there are no deliverables. The research administrative fee is assessed upon transfer of the gift to the administering unit as a one-time-only fee.

The 2.5% portion of the research administrative fee funds deferred maintenance as determined by the campus’s Finance Committee.

The 2.0% portion of the research administrative fee supports the campus’s research enterprise. It is available to the central campus units involved in research administration at the time the gift is recorded on the ledger.

The 1.0% portion of the research administrative fee is distributed to a fund administered by the Vice Chancellor for Research and is used as an investment in future research including cost-sharing and seed funding activities through the Berkeley Futures Grants program.

The 7.5% portion of the research administrative fee (placed in a separate fund) is available to the administering unit at the time the gift is recorded on the unit ledger. Administering units are expected to use their portion of the fee to support the administrative costs associated with supporting that research gift.

If more than one principal investigator benefits from a gift, the 7.5% portion of the research administrative fee is split proportionally, provided the proportions are negotiated and documented at the time the fund to which the gift is allocated is established.

Additional information about the research administrative fee and the exception process can be found on the campus’s advancement intranet, Eureka, at https://eureka.berkeley.edu.

Responsibilities

University Development and Alumni Relations:

• Codes charitable gift funds to reflect appropriate philanthropic allocation and research administrative fee assessments.
• Assesses philanthropic allocation and research administrative fee.
• Responds to departmental inquiries regarding the assessment and distribution of the philanthropic allocation and the research administrative fee.
• Coordinates review and approval of philanthropic allocation exception requests.
• Distributes the philanthropic allocation and research administrative fee in accordance with the terms and conditions of this policy.

Vice Chancellors and Deans:

• Provide to University Development and Alumni Relations their DeptID for the philanthropic allocation fund (56996).
• Establish procedures for further redistribution of the philanthropic allocation, if so desired, within their areas of responsibility.
• Approve and fund philanthropic allocation exceptions and, in the case of the Vice Chancellor for Research, approve research administrative fee exceptions.

Glossary

• Advancement: Activities including, but not limited to, all aspects of fundraising, communications, and alumni relations that involve relationships with external constituents.
• Philanthropic Gift: A contribution to the University intended as a donation and bestowed voluntarily and without expectation of tangible compensation. Normally gifts are awarded irrevocably.
• Philanthropic Allocation: The percentage of a gift’s value deducted from the gift to help offset the cost of advancement activities and to provide funding for deferred maintenance.
• Research Administrative Fee: The percentage of a gift’s value deducted from the gift to help offset the cost of administering research and to provide funding for deferred maintenance.
• Conflict of Interest Form (700U): The Statement of Economic Interests for Principal Investigators (Form 700U) is a disclosure required by the State of California of PIs employed by the State’s universities. The primary purpose of the form is to document whether or not the PI has a defined financial relationship with a funder. Additional information can be found here.

Related Documents and Policies

Chancellor Robert Birgeneau’s March 14, 2005 Memorandum on Overhead Allocations to Support Research

Revision History

Revision of July 1, 2023:

Increase in the philanthropic allocation and research administrative fee to 7.5% and 13%, respectively, with the incremental 2.5% funding deferred maintenance

Revision of July 1, 2021:

The name of the responsible office was updated to reflect a changed organizational structure in University Development and Alumni Relations.

The use of philanthropic allocation funds was clarified to encompass all aspects of advancement.

The next review date was changed to reflect the fact that Light the Way: The Campaign for Berkeley launched later than originally anticipated and, therefore, will extend beyond the original timeframe. The Philanthropic Assessment will be reviewed in the context of planning for the next campaign.

Revision of March 15, 2016:

The name of the policy was changed from Assessment and Distribution of Campus Gift Fee to Assessment and Distribution of the Campus Philanthropic Allocation and Research Administrative Fee. All references to the term “gift fee” were changed to philanthropic allocation.

Throughout the document, the Responsible Office’s name was changed from University Relations to University Development and Alumni Relations.

The philanthropic allocation is 5.0% as opposed to 2.5% for the gift fee.

Revision of April 24, 2009:

The Responsible Executive was changed from Donald McQuade to Scott Biddy. The Responsible Office was changed from Development Operations to Advancement Operations. Broken hyperlinks were updated.