Endowment Spending Policy Calculator

About this calculator

The simplest endowment spending rule draws a fixed percentage of the current endowment value each year (draw = spending rate × endowment value), but because market values swing year to year, most institutions instead use a smoothed, weighted-average rule that blends the spending rate with a moving average of the endowment's value over several prior years — dampening the effect of a single bad or great market year on the operating budget.

University endowment managers, nonprofit boards, and foundation CFOs use this calculation to set the annual draw that funds scholarships, operations, or grants, balancing the competing goals of stable year-to-year funding and preserving the endowment's real value against inflation over the long run.