How is the payout rate on endowed funds determined, and how does it compare to other Universities?
The Audit and Finance Committee of the Executive Committee annually reviews the endowment earning distribution process calculated on a 12 quarter rolling average of the market value of the portfolio. The rate for fiscal 2004-2005, for instance, was 6%. The Foundation returns 10% of the interest income to the principal to keep pace with inflation and to maintain a steady growth in money available to the fund sponsors. The Foundation seeks to avoid the extreme highs and lows in income that could damage the beneficiary program’s long-term viability.