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A total return investment policy must always be paired with a spending rate, a formula that governs what percentage of the market value of the endowment can prudently be spent on operations in a single year. Established by an institution's board of trustees, the spending rate should strike a balance between short-term spending needs and long-term capital growth. In order to increase the predictability and reduce the volatility of the investment income stream, spending is usually determined by multiplying the spending rate by a multiyear moving average of the value of the endowment or by using some other smoothing mechanism.

The failure of the Society to protect its endowment can be attributed to a mix of factors. The following analysis reviews the Society's performance in each of the three areas of endowment management.

Return on investments

The Society was a leader among institutions of its kind in adopting a professional approach to the management of its investments. In 1964, during the presidency of Frederick B. Adams Jr., the Society hired Fiduciary Trust International, Inc., to manage its investments. Fiduciary Trust remains the Society's investment man­ager today. Overall, the performance of the Society's investments has been in line with market indexes. Since 1980, the Society's total fund has earned a compound annual return of 12.4 percent. This figure compares with a compound annual return of 13.5 percent for the Standard&Poor's 500 and a 15.1 percent return on the Dow Jones Industrial Average.

Table 10.1 shows the Society's annual investment performance from 1981 through 1993 as compared to total annual return benchmarks published by Cam­bridge Associates.

Kennedy and Schneider (1994, pp. 19, 23, 25). The column headed “Cambridge Mix” is a weighted average with an assumption that the benchmark investment portfolio is comprised of 75 percent equities and 25 percent bonds.
The table reveals that the performance of the Society's port­folio was quite respectable. It is clear that the erosion of the Society's endowment during the 1980s was not due to poor management of the investments.

Capital gifts

The second element of a comprehensive endowment management policy is capital fundraising. New gifts provide a boost to an institution's financial base when investment returns are good and help it maintain that base when they are not.

For institutions dependent on endowment, the 1970s were extremely diffi­cult. The loss of endowment principal in the early part of the decade, coupled with high inflation, fundamentally altered the budgetary equation. Investment returns were falling just as costs were rising, and deficits became the rule. The historical narrative presented earlier documents not only the Society's mounting deficits but also its poor record of private fundraising. Capital fundraising was no exception.

Given the struggle to balance the operating budget, it should come as no sur­prise diat the Society did not raise capital gifts during this period. Except for 1977, when capital gifts totaled $259,000, the Society raised a total of just $85,000 in sixteen years, an average of just $5,300 a year.

See Tables C.4-2 and C.5-2 in Appendix C.

Questions & Answers

what is the stm
Brian Reply
is there industrial application of fullrenes. What is the method to prepare fullrene on large scale.?
industrial application...? mmm I think on the medical side as drug carrier, but you should go deeper on your research, I may be wrong
How we are making nano material?
what is a peer
What is meant by 'nano scale'?
What is STMs full form?
scanning tunneling microscope
how nano science is used for hydrophobicity
Do u think that Graphene and Fullrene fiber can be used to make Air Plane body structure the lightest and strongest. Rafiq
what is differents between GO and RGO?
what is simplest way to understand the applications of nano robots used to detect the cancer affected cell of human body.? How this robot is carried to required site of body cell.? what will be the carrier material and how can be detected that correct delivery of drug is done Rafiq
what is Nano technology ?
Bob Reply
write examples of Nano molecule?
The nanotechnology is as new science, to scale nanometric
nanotechnology is the study, desing, synthesis, manipulation and application of materials and functional systems through control of matter at nanoscale
Is there any normative that regulates the use of silver nanoparticles?
Damian Reply
what king of growth are you checking .?
What fields keep nano created devices from performing or assimulating ? Magnetic fields ? Are do they assimilate ?
Stoney Reply
why we need to study biomolecules, molecular biology in nanotechnology?
Adin Reply
yes I'm doing my masters in nanotechnology, we are being studying all these domains as well..
what school?
biomolecules are e building blocks of every organics and inorganic materials.
anyone know any internet site where one can find nanotechnology papers?
Damian Reply
sciencedirect big data base
Introduction about quantum dots in nanotechnology
Praveena Reply
what does nano mean?
Anassong Reply
nano basically means 10^(-9). nanometer is a unit to measure length.
do you think it's worthwhile in the long term to study the effects and possibilities of nanotechnology on viral treatment?
Damian Reply
absolutely yes
how to know photocatalytic properties of tio2 nanoparticles...what to do now
Akash Reply
it is a goid question and i want to know the answer as well
characteristics of micro business
for teaching engĺish at school how nano technology help us
How can I make nanorobot?
Do somebody tell me a best nano engineering book for beginners?
s. Reply
there is no specific books for beginners but there is book called principle of nanotechnology
how can I make nanorobot?
what is fullerene does it is used to make bukky balls
Devang Reply
are you nano engineer ?
fullerene is a bucky ball aka Carbon 60 molecule. It was name by the architect Fuller. He design the geodesic dome. it resembles a soccer ball.
what is the actual application of fullerenes nowadays?
That is a great question Damian. best way to answer that question is to Google it. there are hundreds of applications for buck minister fullerenes, from medical to aerospace. you can also find plenty of research papers that will give you great detail on the potential applications of fullerenes.
how did you get the value of 2000N.What calculations are needed to arrive at it
Smarajit Reply
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Source:  OpenStax, The new-york historical society: lessons from one nonprofit's long struggle for survival. OpenStax CNX. Mar 28, 2008 Download for free at http://cnx.org/content/col10518/1.1
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