How much of an endowment may be spent without court approval?
The amount that may be spent is determined primarily by the gift document. For example, if the gift document contains a specific limit – for example, spend no more than 7% of the fund’s current value each year – the charity must abide by that limit. If gift document says spend income only, or simply says that the gift is “to be held as an endowment” (or words to that effect), then generally speaking the charity may spend only the income generated by the fund, and may not spend below the fund’s “historic dollar value,” or the original amount of the gift.
