Quote from: David81 on January 15, 2024, 11:05:50 PM
An easy peasy, back-of-the-envelope answer to "how much endowment income is available for immediate spending?" is to multiply the current endowment by 4 percent, which is the standard draw to ensure that the principle continues to grow.
Bigger percentage draws because the endowment just had a fabulous year are a possibility, but it may be much wiser to hold onto the money to ensure that you can draw more than 4 percent during down years for the market.
Agree with the philosophy presented by David81, but from my experience talking with advancement and finance people within universities the annual draw is usually 5 percent unless, for individual items, doing so draws the item under the original donation amount.