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How do I set up a spending rule?

Spending rules dictate how returns on an endowment can be spent by an institution.  Organizations may apply one spending rule to all of their endowment funds or assign different rules to groups of funds (note: a client should have distributions impacting units when implementing multiple spending rules within the same pool). A client user is able to create multiple spending rules, assign funds to a spending rule and track changes within the spending rules.  The following training shows you how to set up a new spending rule in Fundriver.

Log in to Fundriver and click on the ORGANIZE tab.

Log in to Fundriver and click on the ORGANIZE tab.

Click on SPENDING RULES.

Click on SPENDING RULES.

Click the green ADD button to add a new spending rule.

Click the green ADD button to add a new spending rule.

Name your spending rule and enter a brief description.

Name your spending rule and enter a brief description.

Select a TYPE for your spending rule.  See below for more information on Spending Rule types.  

Select a TYPE for your spending rule.  See below for more information on Spending Rule types.  

A Spending Rule TYPE is required, even if it is a Blank Rule.

Blank Rule - Nothing is calculated. All funds are required to have a spending rule even if they do not calculate spending.

Blank Rule - Nothing is calculated. All funds are required to have a spending rule even if they do not calculate spending.

Due to/Due From funds often are assigned blank spending rules, as are other kinds of funds.

Dollar Amount Per Unit – The spending amount is the number of shares times the rate entered into this rule. This is more commonly used in clients over $300 million. In most cases, spending needs to impact unit price (not the number of units) and all funds need to take a distribution.

Dollar Amount Per Unit – The spending amount is the number of shares times the rate entered into this rule. This is more commonly used in clients over $300 million. In most cases, spending needs to impact unit price (not the number of units) and all funds need to take a distribution.

Percent Average – This is the most common rule. It can be configured to calculate based on the average fund value, pool value, or unit price.  See below for instructions on selecting parameters.

Percent Average – This is the most common rule. It can be configured to calculate based on the average fund value, pool value, or unit price.  See below for instructions on selecting parameters.

Avg Of: Options are Fund, Pool or Unit Price

% to Distribute: Enter a percent. For example 5% should be entered as “5” not “.05”. If spending is taken quarterly, then enter 1/4th of the annual rate. For example if the rule is 5% taken quarterly, then enter 1.25.

Periods for Average: If the rule is trailing 3 years using quarterly values, then enter 12. If the rule says trailing 3 years using annual values then enter 3.

Period Length: Options are Monthly, Quarterly or Annual. In example from above, if the rule is trailing 3 years using quarterly values, then select quarterly.

If underwater % to Distribute: Enter 0 if the fund is not permitted to spend underwater. Enter 100 if a fund can take distributions underwater. If a fund can take 90% of the allocation if it is underwater, then enter 90, etc.

Percent Of Income – This is rarely used. It is designed for funds that can only distribute income or realized gains. This to support funds following pre-UMIFA guidelines.

Percent Of Income – This is rarely used. It is designed for funds that can only distribute income or realized gains. This to support funds following pre-UMIFA guidelines.

Prior Year Spending – This rule calculates an increase from the prior year spending plus a percent of any new gifts. (Less common.)

Prior Year Spending – This rule calculates an increase from the prior year spending plus a percent of any new gifts. (Less common.)

Proportional Distribution – This distributes a fixed amount across all funds. If a fund that participates in the rule does not take a distribution, the total may not add up to the amount entered. There is also a rounding bug that may also cause the total distribution to be off by a few pennies. This rule can be used when spending impacts units or unit price.

Proportional Distribution – This distributes a fixed amount across all funds. If a fund that participates in the rule does not take a distribution, the total may not add up to the amount entered. There is also a rounding bug that may also cause the total distribution to be off by a few pennies. This rule can be used when spending impacts units or unit price.

Once you have selected your spending rule and applied applicable parameters, click SAVE.

Once you have selected your spending rule and applied applicable parameters, click SAVE.

A message will appear confirming your rule was successfully saved.

A message will appear confirming your rule was successfully saved.

Click on the ASSIGN RULES tab.

Click on the ASSIGN RULES tab.

Select your new rule from the SPENDING RULE table.

Select your new rule from the SPENDING RULE table.

Highlight funds on the left to which you would like to apply the rule.  Move them to the right box by clicking the arrow button.  Once moved over, the funds are assigned.

Highlight funds on the right to which you would like to apply the rule.  Move them to the left box by clicking the arrow button.  Once moved over, the funds are assigned.

If you would like to apply the rule to all funds, click the SELECT ALL box and then move the funds by clicking on the arrow button.  You can also hold down the CTRL button + click to select multiple funds.

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