Friday, June 15, 2007 | 7:17 a.m.
The UNLV Foundation is no longer taking 5 percent off the top of donations to the university to help cover its overhead and is looking for other ways to pay those bills.
The 5 percent cut soured donors and upset deans, who wondered whether the foundation was doing enough to warrant tapping donations for its administrative needs.
So many donors were objecting to the bite out of their gifts that they balked at giving. As a result, enforcing the policy became the "exception rather than the rule," Executive Director Nancy Strouse said, so foundation trustees repealed it altogether.
In giving up the assessment, which generated more than $700,000 a year, UNLV President David Ashley wants regents' permission to use $1.1 million in student-funded capital improvement fees to pay off a foundation building loan that costs more than $200,000 a year.
On the north end of campus near the university's performance halls, the foundation building is used for university and community events, such as regents meetings. The building's operation and maintenance costs are already state funded.
Foundation executives are considering budget cuts to reduce overhead costs, such as leaving some jobs unfilled and reducing the foundation's services to the colleges. Those services include covering the cost to publish college newsletters.
The 5 percent overhead fee was instituted three years ago by then-Executive Director John Gallagher to cover the cost of the university's first major fundraising campaign. Although common at other universities, the assessment rankled deans, in part because they weren't consulted in a decision that effectively reduced the amount of the gifts they were receiving from donors.
In the philanthropy community, word spread that the university would waive the foundation's overhead assessment on large gifts rather than risk losing a donation. The fee was initially estimated to generate $1 million a year, but the most it produced was $717,000. This year, that was expected to fall to $400,000.
The rest of the foundation's $5.6 million operating budget is covered by interest earned on endowment income and by unrestricted giving. The foundation has seven full-time employees, who are paid with state funds. The colleges split the cost of their development officers.
The foundation spends about 13 cents for every dollar raised, on the low end for a university of UNLV's size.
The 53-member fund raising staff, hindered currently by nine openings, is about one-third the size of those of comparable universities.
The university needs to raise $160 million in the next 18 months to reach its seven-year, $500 million goal.
The campaign hasn't announced a major gift since its launch in September 2005.
Criticism of the 5 percent take for foundation overhead was aired in a Sun investigation last fall into the foundation's fundraising efforts. The Sun found that the $500 million goal was overly ambitious for UNLV, and, based on national guidelines of how donations should be counted, the foundation was inflating its fundraising results.