Definition

A written guideline that authorizes the transfer of a certain percentage of the market value of the endowment, every year, to support the purpose designated by the donor.

Purpose

To apply a disciplined and reasoned approach to moving money from the endowment and making sure it is done on a predictable, consistent basis.

Core Concept

“Intergenerational equity” is the idea that spending policy must ensure that future generations of faculty and students receive the same level of benefits from the endowment as today’s. Thus, the ideal spending rate is equivalent to the expected long-term real (i.e., inflation-adjusted) total return. In that way, spending is equitably distributed across generations of beneficiaries.

CEF Spending Policy

Annually, 5% of the average market value of the CEF for the previous three years. (Distribution amounts are calculated quarterly at 1.25% of a twelve quarter rolling average basis).

Other Spending

In addition to the 5% distributed on campus, the UW also spends 1% of current market value for administrative fees consisting of .8% to the Office of Development for development activities and .2% to the Treasury Office for CEF management.

University of Washington Endowment Report 2004 Excerpt

This link will open a page from the University of Washington Endowment Report 2004 dealing with CEF Spending Policy and Objectives. This link will enable you to download Adobe Corporation's free Acrobat^© viewer, needed for viewing this file.