In FY19, more than three quarters of institutions that participated in the 2019 NACUBO-TIAA Study of Endowments reported that they increased their spending dollars from their endowments, and the total amount of spending from endowments reached $22.7 billion. Since the end of the fiscal year, financial markets have been very volatile, and many analysts predict that institutions will have difficulty reaching their long-term investment return targets and maintaining their current levels of endowment spending. In this environment, many institutions may need to reconsider the traditional “4% spending rule” they rely on to set their endowment spending levels and update their spending policies due to the impact of the COVID-19 pandemic.
This session uses new data from the 2019 NACUBO-TIAA Study of Endowments to examine recent trends in endowment spending rates and spending policies and discusses new spending strategies institutions can consider in any future low-return environments and when accounting for future changes to spending policies in light of endowment losses due to COVID-19.
Endowment Management Webcast