Spending and Distribution Policy

Spending and Distribution Policy

Benjamin Franklin once said that nothing in this world is certain, except death and taxes.  Nonprofit organizations suspend these certainties as they are generally exempt from taxes and live on in perpetuity.  Institutional spending policies specify the balance between appropriately funding today’s generation and protecting investment assets for tomorrow’s beneficiaries.  We developed the Sustainable Withdrawal Model to help us deepen our understanding of the potential ramifications of asset allocation and spending decisions.  This model helps us and our clients assess this balance based on the following questions:

1. What is my organization’s asset allocation strategy?
2. Does our asset allocation strategy match our risk profile?
3. How much can we withdraw or distribute from our portfolio each year?
4. How should we calculate our withdrawal rate?

At Mason, we can help you formulate answers to each of these questions and reevaluate previous decisions.  These decisions may have a profound influence on your ability to support your most important constituents.

Click below to request more information about Mason’s Sustainable Withdrawal Model for institutions.