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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 math number
Tric Reply
x-2y+3z=-3 2x-y+z=7 -x+3y-z=6
Sidiki Reply
Need help solving this problem (2/7)^-2
Simone Reply
what is the coefficient of -4×
Mehri Reply
the operation * is x * y =x + y/ 1+(x × y) show if the operation is commutative if x × y is not equal to -1
Alfred Reply
An investment account was opened with an initial deposit of $9,600 and earns 7.4% interest, compounded continuously. How much will the account be worth after 15 years?
Kala Reply
lim x to infinity e^1-e^-1/log(1+x)
given eccentricity and a point find the equiation
Moses Reply
12, 17, 22.... 25th term
Alexandra Reply
12, 17, 22.... 25th term
College algebra is really hard?
Shirleen Reply
Absolutely, for me. My problems with math started in First grade...involving a nun Sister Anastasia, bad vision, talking & getting expelled from Catholic school. When it comes to math I just can't focus and all I can hear is our family silverware banging and clanging on the pink Formica table.
I'm 13 and I understand it great
I am 1 year old but I can do it! 1+1=2 proof very hard for me though.
Not really they are just easy concepts which can be understood if you have great basics. I am 14 I understood them easily.
find the 15th term of the geometric sequince whose first is 18 and last term of 387
Jerwin Reply
I know this work
The given of f(x=x-2. then what is the value of this f(3) 5f(x+1)
virgelyn Reply
hmm well what is the answer
If f(x) = x-2 then, f(3) when 5f(x+1) 5((3-2)+1) 5(1+1) 5(2) 10
how do they get the third part x = (32)5/4
kinnecy Reply
make 5/4 into a mixed number, make that a decimal, and then multiply 32 by the decimal 5/4 turns out to be
can someone help me with some logarithmic and exponential equations.
Jeffrey Reply
sure. what is your question?
okay, so you have 6 raised to the power of 2. what is that part of your answer
I don't understand what the A with approx sign and the boxed x mean
it think it's written 20/(X-6)^2 so it's 20 divided by X-6 squared
I'm not sure why it wrote it the other way
I got X =-6
ok. so take the square root of both sides, now you have plus or minus the square root of 20= x-6
oops. ignore that.
so you not have an equal sign anywhere in the original equation?
is it a question of log
I rally confuse this number And equations too I need exactly help
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Commplementary angles
Idrissa Reply
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A soccer field is a rectangle 130 meters wide and 110 meters long. The coach asks players to run from one corner to the other corner diagonally across. What is that distance, to the nearest tenths place.
Kimberly Reply
Jeannette has $5 and $10 bills in her wallet. The number of fives is three more than six times the number of tens. Let t represent the number of tens. Write an expression for the number of fives.
August Reply
What is the expressiin for seven less than four times the number of nickels
Leonardo Reply
How do i figure this problem out.
how do you translate this in Algebraic Expressions
linda Reply
why surface tension is zero at critical temperature
I think if critical temperature denote high temperature then a liquid stats boils that time the water stats to evaporate so some moles of h2o to up and due to high temp the bonding break they have low density so it can be a reason
Need to simplify the expresin. 3/7 (x+y)-1/7 (x-1)=
Crystal Reply
. After 3 months on a diet, Lisa had lost 12% of her original weight. She lost 21 pounds. What was Lisa's original weight?
Chris 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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