Designing a Spending Policy That Works

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Save. Spend. Invest. From the time we are children until we become adults, we hear these oft-repeated terms of personal budgeting. Unfortunately, one phrase is missing from this equation: with discipline. It applies to both personal and institutional finances.

Nonprofit organizations are continually under pressure to balance current and future needs when determining the purpose, structure, and governance of their endowment assets. Even when the appropriate strategy and process are in place to align saving and investing with long-term goals, spending often is secondary.

Applying a disciplined strategy to how an organization spends its endowed resources impacts current budgets, future initiatives, capital projects, investment strategies, and administrative expenses. It can limit volatility and ease organizational strain. A strong framework for spending success is essential to the long-term sustainability of endowment assets.

Full article includes sample document.

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