Endowment Spending Policy
Effective: 5/18; Reviewed: 10/13/21
Contact: Chief Financial Officer
The College’s endowment spending policy is designed to meet two objectives:
- Balance the need for annual operating income from the endowment to provide resources for the current generation, with the need to maintain the purchasing power of the endowment in perpetuity to provide resources for future generations.
- Ensure reasonable stability in annual payout from the endowment, so that the College’s annual operating budgets are not subject to substantial swings in available funds.
The College’s Board of Trustees has adopted a policy of appropriating for expenditure each year an amount not to exceed 5% of its average total endowment value as of June 30 for the three preceding years in which the endowment expenditure is planned.
In establishing this policy, the College considered the long-term expected return on its endowment. Accordingly, over the long term, the College expects the endowment spending policy to allow its endowment value to grow at the rate of inflation, as measured by the Consumer Price Index. This is consistent with the College’s objective to maintain the purchasing power of its endowment held in perpetuity as well as to provide real growth through new gifts.