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Instead, with its reserves mostly depleted and struggling to balance revenues and expenditures, the Society's board of trustees took a step to increase the in­come that could be spent from its endowment: it adopted a "total return" invest­ment policy. Prior to this action, the Society spent only the dividend and interest income generated by its endowment. It did not spend any portion of realized gains generated through capital appreciation of the portfolio. Such a policy encouraged the Society to forgo growth investments (such as small company stocks) for in­vestments that generated the most current return (such as bonds).

The new total return policy allowed the Society to spend up to 5 percent of the endowment's market value annually (based on a three-year moving average of the endowment), irrespective of whether the endowment actually generated that amount of dividends and interest. In the annual report for 1967, Adams, referring to the remarkable growth in the market value of the endowment, ex­plained it this way: "This [1967 investment] performance would not have been possible if the funds had been entirely invested in bonds to secure maximum re­turn. Yet the portion of our money invested in 'growth' stocks produces initially a very low rate of income because of the retention of earnings by rapidly expanding companies. With rising costs of operation, the Society needs to increase income, yet prudent investment for the future in an inflationary economy dictates the pur­chase of substantial percentages of securities whose present yield is low." Adopt­ing a total return philosophy allowed the Society to pursue a goal of maximizing the growth of its endowment without sacrificing current income.

For a detailed explanation of total return and other principles of endowment management, see Chapter Ten.

The impact of the new strategy on the Society's operating budget was sub­stantial. In 1967, for example, proceeds from transferred realized gains (to bring spending up to the 5 percent limit) amounted to $244,204, increasing investment income by 48 percent over the 1966 investment income total of $509,000. This in­crease is represented by the discontinuity, or jump, in the Society's total revenues as depicted in Figure 4.1. It should be pointed out, however, that the newly avail­able realized gains relieved the pressure on Society leadership both to develop new revenue sources and to limit the growth of expenditures. Between 1966 and 1970, total operating expenses increased at a rate of 9.5 percent per year, while revenues were flat, increasing at an average rate of literally 0 percent per year.

See Table C.4-1 in Appendix C.
The growth in expenditures coupled with the lack of growth in revenue created a financial vise that would begin to close on the Society as the 1970s neared.

Nevertheless, the tremendous jump in revenue put Society leadership in an expansive mood. A major building renovation had been completed, the galleries were reinstalled and redecorated, and in the library, the lighting was redesigned and a new carpet was installed. With the renovations complete and the increase in spendable investment income, the Society's focus shifted toward becoming a more popular institution, increasing the emphasis given to the museum, educa­tion, and special programs.

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.
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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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