Some institutions create a gift fee to pay for a campaign or to cover basic fundraising costs, and especially today, many are doing it in order to increase revenues in the wake of the recession's effect on endowments. In the best circumstances, gift fees are emblematic of a transparent, accountable development process, where donors understand that…

Just a few years ago, the University of Notre Dame averaged about six mega gifts--$10 million or more--a year. Last year, however, the Fighting Irish received only one such donation. "That multimillion donation has become more difficult to obtain," says Lou Nanni, vice president for university relations at the Indiana institution.…