Admin Fee Types and Calculations

Written by Nick Miles

Last published at: March 25th, 2021

Overview

Admin Fee Types define how your foundation charges admin fees to specific funds. Admin Fee Types have two components: the Fee Type (i.e. how the fee will be assessed), and the Apply Fee (i.e. when the fee will be assessed). Different combinations of Fee Types (such as flat fee, or percent) and the Apply Fee (such as per each donation, or a set interval) can be configured to fit the needs of your foundation and funds.

Fee Types

The Fee Type options define how a fund(s) will be charged:

  • Flat fee types ("flat_fee") charge a flat amount at a defined interval, or on a "per each" (donation, invoice, etc.) basis.
  • Percent fee types charge a percentage of a fund's balance at a defined interval, or on a "per each" (donation, invoice, etc.) basis.
  • Percent Range fee types ("percent_range") use tiers (which can also be laddered) to charge a percentage of a funds balance. These are often used on endowed funds with large balances to keep their admin fee costs to a reasonable level.


Apply Fee Options

The Apply Fee options define when or how often a fund(s) will be charged:

  • Interval options can be thought of as "fund balance fees", and are used to charge a fund "X" on a monthly, yearly, etc., basis. 
    • Admin fees that are applied at an interval must be processed at the same interval that's defined in the relevant admin fee type. 
    • Interval options do not post until your foundation runs/processes the admin fee transaction.
  • Per Each options ("ea_") are based on volume, and apply a fee to each donation, grant, etc., that's posted by your foundation. 
    • These are often applied to fund types such as fiscal sponsorship, agency, and affiliate.
    • Per each admin fees post automatically when the donation, grant, invoice, etc., is posted with the same date as the transaction date. 
    • Per each options only apply to new transactions and do not apply retroactively.
    • "Minimum yearly fee" does not take "per each" options into consideration.


 

Please note that interval options such as monthly, quarterly, etc., are mutually exclusive from the per each options. You can't use an interval and a per each option in the same admin fee type. Similarly, you cannot use more than one Apply Fee option in the same admin fee type.

The table below shows the available fee types, and when/how they can be applied. For example, an admin fee type with a flat fee can be applied on a per each  basis, but a percent range fee cannot be applied on a per each basis.

Fee Types and Apply Fees
Y=Yes  N=No
Apply Fee Flat Fee Percent Percent Range
Monthly Y Y Y
Quarterly Y Y Y
Yearly Y Y Y
Fiscal Year (fiscal_year) Y Y Y
Bi-Annual Y Y Y
Bi-Annual Fiscal Year (bi-annual_fy Y Y Y

Per Each Grant (ea_grant)  Y Y N
Per Each Internal Grant (ea_int_grant) Y Y N
Per Each Donation (ea_donation) Y Y N
Per Each Internal Donation (ea_int_donat) Y Y N
Per Each Stock (ea_stock) Y Y N
Per Each Voucher (ea_voucher) Y Y N
Per Each Invoice (ea_invoice) Y Y N



Calculations and Examples

For the purpose of this article, and to make a clear distinction between the Percent Range Fee Type, and Flat or Percent Fee Types, we've organized the information and calculations into two parts. The first part covers Flat and Percent Fee Types, and the second part covers the Percent Range Fee Type. 

Example calculations were created using two example Funds and example Admin Fee Types:

Example Funds

  • Donor Advised Fund: the fund being assessed/charged admin fees.
  • Operating Fund: the fund receiving the admin fee revenue.


Example Admin Fee Types

Please note that this article does not contain example fee types for every "interval" and "per each" apply fee option. However, the process and resulting transaction details will be similar for other apply fee options of the same type ("interval" or "per each").

Flat Fee and Percent Fee Types

The examples below compare the resulting transactions of a Flat and Percent Fee Type when applied on a "per each donation" basis, or a "monthly" basis.

Per Each Example

In this example, the Donor Advised Fund is assigned a Flat Fee Type of $5 and a Percent Fee Type of 2%- both of which are configured to apply on a "per each donation" basis.

When the Donor Advised Fund receives a donation of $125 and the donation is posted, the "Flat Fee Type - Per Each Donation" charges $5 (on the $125 donation), and the "Percent Fee Type - Per Each Donation" charges $2.50 (i.e. 2% on the $125 donation).

(Click the image to expand the multi transaction detail)

Monthly Example

In this example, the Donor Advised Fund is assigned a Flat Fee Type of $10, and a Percent Fee Type of 2%- both of which are configured to be applied on a monthly basis (instead of a "per each" donation basis).


As a reminder, interval admin fees (such as monthly) do not post automatically and will need to be processed by your foundation at the interval specified in the fee type. For this example, the admin fees were processed with a "calculate date" (and "post date") of 3/31/2021 (though the post date can be different than the calculate date if needed).

When the admin fees are processed for the Donor Advised Fund, the "Monthly - Percent Fee Type" charges $54.70 (i.e. 2% on the fund balance of $32,820), and the "Monthly - Flat Fee Type" charges $0.83 (i.e. $10 on the year or 1/12th of $10 per month). 

(Click the image to expand the multi transaction detail)


Percent Range Fee Type

The example below compares the resulting transactions of a laddered vs. non-laddered "Percent Range Fee Type" when applied to the Donor Advised Fund on a "yearly" basis (i.e. end of calendar year). To highlight the affect of a laddered vs. non-laddered fee type, both fee types were given the same "Fee Percent Ranges" and the Donor Advised Fund had a balance of $15,000 when the admin fees were processed and posted.

Yearly Example

The images below show the laddered and non-laddered fee types. As you can see, the percent ranges are the same- the only difference between the two is the Fee Ladder setting.

This table shows the amount charged to the Donor Advised Fund (with a balance of $15,000) when using a fee ladder vs. no fee ladder.

Fund Balance ($15,000) % Range Fee Ladder = Yes Fee Ladder = No
$0.01 1.00% $10 $0
$1000.01 0.75% $30 $0
$5000.01 0.55% $27.50 $0
$10000.01 0.45% $22.50 $0
$15000.01 0.35% $0 $67.50

= $90.00 = $67.50


(Click the image to expand the multi transaction detail)