Financial
Spending from Endowments
The UM Foundation Board of Trustees determines the spending rate used across all endowments. This rate is applied to each endowment to determine the amount available for spending. The spending rate currently in use is 4 ¼ percent of the three-year average balance of each endowment.
Unless an endowment is long established, spending may be restricted or even halted during severe investment market downturns like that of the past fiscal year. The terms of some endowments prohibit spending should the amount held in that endowment fall below the original contribution. Further, in order to better assure the permanence of each endowment, the UM Foundation has implemented a policy that suspends spending should an endowment’s balance fall below 80 percent of the original contribution even if the terms of that endowment allow continued spending. In many instances where endowed spending has been impaired the Foundation has asked donors to make a further contribution in order to directly support spending for the year.