The university’s spending policy aims to balance the need for consistent current operating support to preserve the long-term purchasing power of the endowment. To meet the goal of intergenerational support, the university must balance the distribution and reinvestment of earnings. Excessively high spending rates deteriorate long-term spending power while reinvesting too large a portion of total return underfunds current programs. Puget Sound employs a moving average asset base, which moderates the impact of market fluctuations on annual spending.
Note: the target asset allocation and spending policy for the Fossil Fuel Free Endowment Option differs from the target asset allocation and spending policy for the general pooled endowment described above.
Puget Sound’s complete pooled endowment investment policy, including spending policy, is available on the Finance & Administration Policies page.