The Impact of Spending Policies Over Time

“A foundation’s spending level can have a significant impact on both its current and future potential payout. This chart and sidebar illustrates that if a foundation started in 1950 with $1 million in assets, a spending policy of 5 percent per year would result in 1998 assets of more than $1.4 million (adjusted for taxes and assuming that investment assets were split equally between equities and fixed income). If that same foundation had spent 8 percent per year over the same period, it would have just $325,058 in current assets.”