Walking the Tightrope: Endowment Spending Policy in Today’s Financial Market
Theological schools continue to face tough choices regarding how to support current programs while maintaining the purchasing power of their endowments. Revised expectations for long-term rates of return in light of recent history have caused many institutions to move target endowment spending rates downward. At the same time, most institutions struggle to find enough money to adequately fund their missions. This workshop will examine the effect of different spending policy decisions on endowment growth and institutional health. Participants will receive practical tools for projecting and analyzing the impact of different spending rates under different rates of return and inflation scenarios. Lastly, the opportunities and obstacles in using this analysis to influence effective resource allocation (i.e., budget) decisions will be explored.
Pioneering Portfolio Management by David Swensen
NBER Research Paper: The Interaction of Spending Policies, Asset Allocation Strategies, and Investment Performance at University Endowment Funds