Most large endowed independent U.S. foundations paid out at or above the required 5% rate during the 2007–2009 period, according to a study released Tuesday by the Foundation Center.
A companion study found that the chief factor affecting a foundation’s expense level was whether it employed paid staff. Both reports were funded by the Charles Stewart Mott Foundation.
Understanding and Benchmarking Foundation Payout is the first report of its kind to track payout practices of the largest U.S. foundations, the center said in a statement.
It found that during 2007–2009, 46% of endowed foundations reported payout rates in the range of 5–5.9%, on average. Nearly one-in-five foundations had payout rates at or above 10%.
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The Foundation Center disavowed any particular position on whether the minimum payout rate should be higher or lower—whether foundation assets should be spent down quickly or preserved long-term. Rather, the statement said, it had provided data and research to inform the debate.