Business and Resource Services
Management Fee

Effective July 1, 2002
Updated March 2006

The Management Fee schedule most recently approved by the ASU Foundation Board of Directors is as follows (examples are included):

Two percent (2.00%) on each dollar received (the “Deposit Management Fee”).

If $1 million is received, $20,000 is retained by the foundation as Management Fee, and the designated account has $980,000 to be invested in the applicable foundation investment pool. The funds in the account must be spent in accordance with the donor-designated purpose (for gift dollars) or for the purpose of the account (for non-gift dollars). If endowed funds are involved, the $980,000 could never be spent; only the annual endowment payout could be spent, which in certain market environments may consume part of the $980,000. Peers’ Management Fee in this area range from none to 6.0%; some peers have even more Management Fee categories then either the foundation or Arizona State University (“ASU”).

Two percent (2.00%) on all disbursements made (the “Disbursement Management Fee”).

If a foundation account is used to pay $20,000 for a consultant to assist an ASU campus, college or unit, the designated account is reduced by the $20,000 for the consultant’s fee and by the $400 for this Management Fee. There is no Management Fee charged on payments made to ASU from foundation accounts or on transfers between foundation accounts. Effective July 1, 2006, ASU will charge 8.50% on most disbursements from their accounts, with some exceptions, such as for any scholarship award. (ASU policy is set forth in COM 206.)

Two percent (2.00%) on the market value of each endowment (the “Endowment Market Value Management Fee”).

The foundation maintains both endowed and non-endowed (operating) accounts, and the cash of each of the two types of accounts are invested in separate investment pools. Most peers charge an Management Fee of 1.50%, or 150 basis points, in this area.

Starting with the fiscal year ended June 30, 2005 and going back into the last five fiscal years, the foundation pooled endowments earned total investment returns of a positive 11.3%, a positive 14.0%, a positive 1.7%, a negative return 6.1% and a negative 10.1%. Over the last ten fiscal years, ending June 30, 2005, the foundation’s average total return was 8.8%.

100% of the total investment return from the non-endowed (operating) accounts.

The foundation maintains both endowed and non-endowed (operating) accounts, and the cash of each of the two types of accounts are invested in separate investment pools. The foundation retains all of the total investment return on the non-endowed (operating) accounts. Most university-related foundations, and most universities including ASU, also keep 100% of this return.

The ASU Foundation has established its Management Fee to provide most of its operating budget funds.