Rethinking Spending Rates
Endowment spending rates are at the heart of every foundation and should hold deep connections to mission alignment, values, and governance.
By Lee Roper-Batker, president & CEO
It took funding, and lots of it, to support the movements that led to the legalization of same-sex marriage, and the establishment and rapid growth of the Black Lives Matter movement. Without generous monetary fuel, those achievements might still be dreams. Progressive philanthropy provided much of that fuel through grantmaking, an amount invariably tied to and therefore determined by the annual percentage of money foundations draw from their endowments—spending rates. And yet the “norm” for spending rates is just five percent.
The question of spending rates is at the heart of every foundation and should hold deep connections to mission alignment, values, and governance. But it doesn’t seem as if there is nearly enough discussion within philanthropic circles about those connections. This is something we should be talking about regularly—particularly within the leadership ranks of community foundations. Read more at SSIR…