Annual Payout Rate

Submitted by zhen4ek on Mon, 12/07/2015 - 05:52

The primary purpose of the Endowment is to provide a predictable and permanent source of funding for the University’s mission. The spending guideline calculates the amount of the Endowment the University spends for this purpose each year. Starting with the average market value of the Endowment for the previous 12 months, the spending guideline incorporates the following weighted factors to set an annual Endowment payout rate:

The Market component is calculated by multiplying the long-term target-spending rate of 4.35 percent by the Endowment's average market value for the prior 12 months. This component carries a 30 percent weighting in the spending rate calculation.

The Spending component includes an inflation adjustment over the prior year's Endowment payout plus the annual projected growth budget. This change in the annual Endowment payout carries a weight of 70 percent.