Endowment Spending Policies

For several years, The Winston-Salem Foundation has applied a total return spending policy for its endowments.  Funds are invested for maximum total return (within acceptable risk parameters), without distinction between income and capital gains.

The market value of the fund is measured over the past 12 quarters, and in 2017, 4.0% of the average of those values will be made available for grants. If a fund is too new to have been invested for 12 quarters, calculations are made based on the history of the fund.  

This method correctly puts the focus on the long-term growth of the endowment principal.  This in turn encourages the appropriate use of equities in the fund, helping the fund to grow faster than inflation.  It also has a "smoothing effect" by creating a more predictable grant stream than an income-only approach.

 
 


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