At the October 21, 2010 meeting, the Board of Regents approved the recommendation of the Finance, Audit and Facilities Committee to adopt a new spending policy for the Consolidated Endowment Fund (CEF).

The recommended policy replaces the interim spending policy which was approved March 2009. At that time, the intent was to prevent further erosion of the endowment following the severe meltdown in global financial markets in the last half of CY2008. Under the interim policy, program distributions were lowered and then frozen at approximately half that of FY2008 levels. Valuations have improved significantly over the past 18 months and, while not fully restored, the Regents considered it appropriate to increase program support and return to a long term spending policy.

Under the new spending policy, distributions to programs will be equal to 4% of a five year rolling average. This is an increase from the interim policy effective rate of just over 3% but a decrease from the previous long term rate of 5% of a three year rolling average.

The new policy is effective with the December 2010 quarterly distributions. The five year averaging period will be implemented incrementally. The CEF per unit distribution for the December 2010 payout will be approximately $0.73, an increase of 24% over the September 2010 quarterly payout.

The administrative fee of 1% which support Investments (0.20%) and Advancement (0.80%) will stay in place but will now be based on an average value just as programs distributions are.

ENDOWMENT CONTACTS:

Alana Askew
alana01@u.washington.edu
206-685-3814

Charles Bennett
charlesb@u.washington.edu
206-616-5715

Lisa Edlin
lmedlin@u.washington.edu
206-685-8030

Ann Sarna
anyasar@u.washington.edu
206-616-1145

Ping Tan
pingtan@u.washington.edu
206-543-3530