Beyond the Five Percent: The New Foundation Payout Menu

Publication date: 
January, 2007

The issue of payout percentage has been subject to debate, with various studies taking different positions as to the long-term effect of different rates on the corpus, but the general assumption in foundation circles is still that the 5% payout rate is the number that will enable foundations to maintain their purchasing power into the future.

 

This paper looks at 13 foundations, and examines the ways in which their non-standard structures — whether in the areas of lifespan, payout, or methods — arise from their missions. For many of them, the choice to do things differently has meant that they have had to invent their own methods to carry out their work. While it is a given in the field that every foundation is different, some are more different than others, and the kinds of rethinking required by these unusual foundations yield lessons not only for those who are considering following in their footsteps, but for all foundations and donors.

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