Why doesn’t Columbia just spend more of the endowment?
Income generated by Columbia’s endowment can be either spent or reinvested, but the principal—the endowment itself—is never spent down. Each year, Columbia’s Trustees determine what share of this investment income to spend. In budgeting for FY2007, the Trustees decided to spend an amount equivalent to 4.4 percent of the overall endowment’s market value. As a matter of policy, this sum usually does not exceed 5 percent of the endowment, a share consistent with the target range for our peer institutions and many other nonprofit organizations. (In FY2007, for example, the average payout by the 76 colleges and universities with endowments above $1 billion was also 4.4 percent.
Income generated by Columbia’s endowment can be either spent or reinvested, but the principal—the endowment itself—is never spent down. Each year, Columbia’s Trustees determine what share of this investment income to spend. In budgeting for FY2007, the Trustees decided to spend an amount equivalent to 4.4 percent of the overall endowment’s market value. As a matter of policy, this sum usually does not exceed 5 percent of the endowment, a share consistent with the target range for our peer institutions and many other nonprofit organizations.
