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.
Click on SPENDING RULES.
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.
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.
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.