| Projecting Endowment Level
To project the amount needed for a new endowment to generate a specific amount of revenue distribution, the following calculation should be used:
- Amount of desired annual distribution divided by the supplemental fee divided by the net distribution
Example:
If one wishes to know the amount needed to fund a new endowment which would generate an annual $6,000 for a scholarship, the following calculation should be used (note: this example uses the December 31, 2010 distribution rate of 3.712%):
- $6,000 / .94 (use of .94 increases 100% annual distribution by 6%) / .03712 = $171,955
Please remember this is only an estimate. The endowment spending distribution rate changes each year due to the changes in the market value of the endowment investment pool, higher education price index and long-term investment performance estimate.
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