Financial Affairs Policies


UMB Policy on Endowment Fund Spending Rule

Financial Affairs

Responsible VP/AVP

James L. Hughes, MBA

Applies to Staff

Policy Statement

The amount of spendable income generated by an endowment fund is calculated according to a complex formula that is designed to preserve the purchasing power of the fund. It attempts to protect against the effect of inflation and to promote stability for planning and budgeting proposes.

The amount of spendable income available for each established fund is calculated in the spring, for the upcoming fiscal year. It is clearly important that the income be spent in accordance with the guidelines stipulated in the Memorandum of Understanding.

When an endowment is established, the spending rule should be carefully explained to the donors so that their expectations are governed by the amount that will be available. It should also be made clear that the funds need to be invested for about a year before spendable income is generated. For assistance contact the Office of External Affairs, Resource Management.

Fill out my online form.