Endowment Spending Rate Rechner
Berechnen Sie annual endowment spending und whether your spending rate is sustainable against returns und inflation.
Annual Spending
$2,500,000
Annual Spending vs Annual Spending Rate
Formel
How Endowment Spending Works
Endowments are designed to provide perpetual funding. The spending rate must be low enough that investment returns preserve the real (inflation-adjusted) value of the endowment.
Formula
Annual Spending = Endowment Value x Spending Rate
Sustainable if Spending Rate <= Expected Return - Inflation
Common Practice
Lösungsbeispiel
A $50M endowment with 5% spending rate, 7% expected return, 3% inflation.
- 01Annual spending: $50M x 0.05 = $2,500,000
- 02Real return: 7% - 3% = 4%
- 03Spending (5%) > Real return (4%): Not sustainable long-term
- 04Net growth: $50M x (7 - 5 - 3)/100 = -$500,000 per year
Häufig Gestellte Fragen
What is a prudent spending rate?
The UPMIFA guidelines suggest spending 4-7% is presumptively prudent, but sustainability depends on investment returns and inflation.
Can a school spend more during emergencies?
Yes, boards can approve temporary higher spending, but should plan to return to sustainable levels within a defined period.
How are endowment returns measured?
Using total return (interest, dividends, and capital appreciation) on a rolling 3-year or 5-year average to smooth volatility.