| Distribution Projection
To project the annual amount that a new endowment may distribute for spending, the following calculation should be used:
- Amount of contribution reduced by the supplement fee multiplied by the net distribution rate
Example:
If one wishes to know how much revenue would be distributed annually from a new $25,000 endowment for a scholarship, the following calculation should be used (note: this example uses the December 31, 2010 distribution rate of 3.712%):
- $25,000 x .94 (use of .94 reduces 100% contribution by 6% supplement fee) x .03712 = $872
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.
To project the annual amount of an existing endowment, the following calculation should be used:
- Market value of endowment as of December 31st multiplied by net distribution rate
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