Endowment Payout (Spending) Policy

It is the objective of the Foundation Board that spending from endowment funds be at a level which will preserve and, it is hoped, enhance in real dollar terms the principal of the endowment funds over time.  Therefore, the endowment spending rate should always be no more than the rate of Total Return realized on invested Foundation assets, less the inflation rate.

Accordingly, the Finance Committee will review and recommend, at least annually, an endowment payout or spending rate for approval by the Board of Directors.  This rate is applied to the three year moving average of market values, as of December 31 of the previous year, to determine funds available to pay out for each endowment for the subsequent fiscal year.

Effective: 2/15/19

Note: 2018 NACUBO average payout rates:

Institution – Related Foundations 

3.8% 

 Endowments: $251 million to $501 million

4.4%

 All Public

3.8%

Recommendation: The current Endowment payout rate for Fiscal Year 2019-2020 is: 4.00%.