Latest Economic Review: Sunpointe Illuminations

Is Your Portfolio Keeping Up with Its Required Return?

For many decades most endowments and foundations have been guided by a general 5% payout rule. The genesis of this payout rule was an extension of the 5% mandatory spending rule for private foundations, established in the early 1980s by the IRS, which set the stage for many institutions. Since then the 5% rule has been more broadly applied to the non-profit world as a basic guideline for establishing a spending rule.