Spending policies – Make endowment funding your ally
Abstract: These days, demand for services is up — especially if your organization provides food, housing, job-search and other kinds of community support — while donations to many nonprofits are down. But don’t be disheartened: You may have an ally in your endowment funds. Income from these funds may be able to help you meet operating expenses, ease cash-flow problems and supplement next year’s annual budget. But you’ll need to be aware of each fund’s restrictions, determine a percentage of endowment income that can be spent on operations, and factor in inflation. The challenge is to develop a spending policy that’s dynamic enough to take these factors into account, and not cause you to pull funds out of the endowment fund beyond what is budgeted and needed for operations.