Organizations face multiple challenges in deciding how to allocate resources. One of the most difficult is implementing a spending policy that successfully balances two ever-competing goals:

  • Supporting the organization’s mission by supplementing budget or funding initiatives today, and
  • Preserving or growing the invested portfolio to support future spending.

Ideally, a policy would exist to perfectly address all your needs and desires. Reality suggests compromise is likely required. Rigid spending policies that ignore investment volatility simply push problems into the future. Shortsighted policies fail to acknowledge the impact significant year-to-year fluctuation in distributions has on budgets and initiatives.

Fortunately, best practices exist to help tailor your spending policy to your unique circumstances and improve the probability of success for your organization. While there are many ways of approaching the creation of your policy, its flexibility is key to your long-term success.

An effective policy reflects what’s most important to the organization and balances the demands of the present with the desires of the future. The path to getting there isn’t always short or straight, but navigating it successfully is critical to your organization’s success. We can help you get there.