Does Fundriver track spending balance if the available spending gets carried forward year after year?
Yes! Fundriver has an option called Spending Bucket Function, which treats the available spending balances like a budget.
When you “Create Distributions” within Fundriver, this produces the Spending Bucket (budget) transfer amount based on the spending rule parameters. The Spending Bucket does not receive separate investment income or earnings. The amount allocated to the Spending Bucket is still part of the Market Value of the original parent fund. This fund will continue to receive earnings. Only when actual distributions are posted does the fund’s market value decrease. When posting a Spending Bucket transfer, cash flow is not impacted because the monies are moving from the Endowed Fund to the Spending Bucket within Fundriver. Cash is not physically getting pulled out of the endowment pool at this point in time.
When you are ready to spend, distributions are posted as the expense occurs. This reduces the cash in the pool and reduces the Spending Bucket (budget) amount available.
Below is an example Spending Bucket Balance report out of Fundriver. Beginning Balance is where the Fund's total spending distribution that were calculated/withdrawn from the Endowment Fund get transferred. Transactions are the amount actually spent in the current fiscal year plus any new spending distributions. Ending Balance is what is remaining that can be spent. Any unused balance becomes the beginning balance for the next fiscal year.