A friend who serves on a nonprofit board asked me whether her organization was drawing enough from its endowment each year. “Probably not,” I answered. Then she described her organization’s endowment spending policies. I was right.
Endowment spending policies are often discussed at board meetings, but rarely questioned. And the amount taken annually from the endowment in most cases is too little.
To understand what’s going on, we have to look at the social and power dynamics. Continue reading