Endowment Distribution Calculator
Are annual endowment distributions best for you? Calculate and find out.
Enter your variables into the fields below, and this tool will calculate your mathematically optimal endowment distribution schedule to maximize endowment value, as opposed to the traditional annual distribution framework.
Purpose of the model
Meet today’s needs.
Manage tomorrow’s capital.
FundNav’s cofounders are actively researching how institutions can manage philanthropic capital across longer time horizons. This calculator is not about withholding scholarships or resources needed today. It is designed to help institutions model excess capital and funds being accumulated for major future commitments. A building fund is one example: capital projects are expensive, and a thoughtful investment and distribution strategy can help an institution understand how to put more of its endowment to work toward the project while protecting current priorities.
Core assumptions
Choose what you want to maximize, and enter your variables.
Choose what the plan should optimizeSelect one mode before adjusting the assumptions below.
Endowment principal targetSet the corpus you want to preserve
Estimated annual payout supported by that corpus$534,600Target corpus × after-fee growth × policy distribution rate
Anticipated expenses
When will money be needed?
Enter the full amount that must be available in the spendable account in each year.
Corpus additions
Are there any fund contributions expected?
Each contribution is added directly to the endowment corpus in the year entered.
Recommended balanced plan
18 planned distributions, plus the final-year payout
Distribution schedule
Take the full policy distribution in these years
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CorpusSpendableDistributionExpensesGift
Annual detail
Compare model timing with annual distributions
Values are shown in nominal dollars—the cash value in each future year.The annual-distribution columns provide a year-by-year benchmark, making the difference between automatic annual payouts and the modeled schedule visible over time. Click and drag any column header to reorder the table.
| Year | Decision | Beginning corpus | Contribution | Market return | Admin fee | Distribution | Expenses | Annual distribution corpus | Annual distribution spendable | Modeled corpus | Modeled spendable |
|---|---|---|---|---|---|---|---|---|---|---|---|
| 1 | Reinvest | $7,000,000 | — | +$560,000 | −$75,600 | — | — | $7,110,180 | $624,220 | $7,484,400 | $250,000 |
| 2 | Reinvest | $7,484,400 | — | +$598,752 | −$80,832 | — | — | $7,222,094 | $1,004,330 | $8,002,320 | $250,000 |
| 3 | Distribute | $8,002,320 | — | +$640,186 | −$86,425 | $427,804 | — | $7,335,770 | $1,390,423 | $8,128,277 | $677,804 |
| 4 | Reinvest | $8,128,277 | — | +$650,262 | −$87,785 | — | — | $7,451,235 | $1,782,594 | $8,690,754 | $677,804 |
| 5 | Reinvest | $8,690,754 | — | +$695,260 | −$93,860 | — | — | $7,568,517 | $2,180,937 | $9,292,154 | $677,804 |
| 6 | Distribute | $9,292,154 | — | +$743,372 | −$100,355 | $496,759 | $500,000 | $7,687,646 | $2,085,550 | $9,438,412 | $674,563 |
| 7 | Reinvest | $9,438,412 | — | +$755,073 | −$101,935 | — | — | $7,808,649 | $2,496,531 | $10,091,551 | $674,563 |
| 8 | Reinvest | $10,091,551 | — | +$807,324 | −$108,989 | — | — | $7,931,558 | $2,913,982 | $10,789,886 | $674,563 |
| 9 | Distribute | $10,789,886 | — | +$863,191 | −$116,531 | $576,827 | — | $8,056,400 | $3,338,003 | $10,959,719 | $1,251,390 |
| 10 | Distribute | $10,959,719 | $1,000,000 | +$956,777 | −$129,165 | $639,367 | — | $9,198,948 | $3,822,158 | $12,147,965 | $1,890,756 |
| 11 | Distribute | $12,147,965 | — | +$971,837 | −$131,198 | $649,430 | — | $9,343,740 | $4,313,934 | $12,339,174 | $2,540,187 |
| 12 | Distribute | $12,339,174 | — | +$987,134 | −$133,263 | $659,652 | — | $9,490,810 | $4,813,450 | $12,533,392 | $3,199,839 |
| 13 | Distribute | $12,533,392 | — | +$1,002,671 | −$135,361 | $670,035 | — | $9,640,195 | $5,320,829 | $12,730,668 | $3,869,874 |
| 14 | Distribute | $12,730,668 | — | +$1,018,453 | −$137,491 | $680,582 | $1,250,000 | $9,791,932 | $4,586,193 | $12,931,049 | $3,300,456 |
| 15 | Distribute | $12,931,049 | — | +$1,034,484 | −$139,655 | $691,294 | — | $9,946,057 | $5,109,670 | $13,134,583 | $3,991,749 |
| 16 | Distribute | $13,134,583 | — | +$1,050,767 | −$141,853 | $702,175 | — | $10,102,608 | $5,641,386 | $13,341,322 | $4,693,924 |
| 17 | Distribute | $13,341,322 | — | +$1,067,306 | −$144,086 | $713,227 | — | $10,261,623 | $6,181,472 | $13,551,314 | $5,407,151 |
| 18 | Distribute | $13,551,314 | — | +$1,084,105 | −$146,354 | $724,453 | — | $10,423,141 | $6,730,058 | $13,764,612 | $6,131,604 |
| 19 | Distribute | $13,764,612 | — | +$1,101,169 | −$148,658 | $735,856 | — | $10,587,201 | $7,287,279 | $13,981,267 | $6,867,461 |
| 20 | Distribute | $13,981,267 | — | +$1,118,501 | −$150,998 | $747,439 | — | $10,753,844 | $7,853,271 | $14,201,332 | $7,614,899 |
| 21 | Distribute | $14,201,332 | — | +$1,136,107 | −$153,374 | $759,203 | — | $10,923,109 | $8,428,171 | $14,424,861 | $8,374,102 |
| 22 | Distribute | $14,424,861 | — | +$1,153,989 | −$155,788 | $771,153 | — | $11,095,039 | $9,012,121 | $14,651,908 | $9,145,255 |
| 23 | Distribute | $14,651,908 | — | +$1,172,153 | −$158,241 | $783,291 | — | $11,269,675 | $9,605,262 | $14,882,529 | $9,928,546 |
| 24 | Distribute | $14,882,529 | — | +$1,190,602 | −$160,731 | $795,620 | — | $11,447,060 | $10,207,738 | $15,116,780 | $10,724,166 |
| 25 | Final payout | $15,116,780 | — | +$1,209,342 | −$163,261 | $808,143 | — | $11,627,236 | $10,819,698 | $15,354,718 | $11,532,309 |
How the calculation works
The case for looking beyond an annual distribution
This is a timing model.
Most institutions make an endowment distribution every year because that is the established practice. This model asks a narrower question: if the institution keeps its existing policy rate but changes the years in which it distributes, how much difference could that make over time?
A skipped distribution stays in the endowed corpus. It continues to earn the assumed portfolio return and increases the balance used to calculate later distributions. The skipped amount does not become a larger entitlement in a future year; any later payout is still the ordinary policy percentage applied to the corpus at that time.
How money moves through the model
Contributions enter the corpus. The entire corpus is invested, earns the return entered above, and is charged the annual administrative fee.
In each year, the model chooses either the full policy distribution or no distribution. It cannot change the institution’s rate or take a partial payout.
A payout moves from corpus to spendable cash. Spendable earns 0%. Anticipated expenses are paid from this account in the year entered.
Every achievable expense must be funded, and the plan cannot go longer than the institution’s maximum permitted gap without a distribution.
The annual account math
One year, shown in order
1
Corpus after return and feesC−t = (Ct−1 + Gt)(1 + r)(1 − f)
2
Policy distribution, if selectedPt = xtpC−t, xt ∈ {0, 1}
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Corpus carried into the next yearCt = C−t − Pt
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Spendable cash after that year’s expensesSt = St−1 + Pt − Nt
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Any year-t value expressed in today’s dollarsVrealt = Vt ÷ (1 + i)t
Key to your inputs
What each symbol means
- Ct
- Endowment corpusStarts at $7,000,000
- St
- Spendable balanceStarts at $250,000
- Gt
- Fund contributions1 entered
- Nt
- Anticipated expenses2 entered
- r
- Average portfolio return8% per year
- f
- Administrative fee1% per year
- p
- Policy distribution rate5% in payout years
- i
- Average inflation2.5% per year
- xt
- Annual decision0 = reinvest; 1 = distribute
- T / W
- Horizon / maximum gap25 years / 3 years
What this plan is maximizing
Spendable cash after protecting a corpus target
The model works toward an ending corpus of at least $10,000,000. While it is below that target, distributions occur only when an expense or the maximum-gap rule requires one. Once the target can be protected, the model maximizes ending spendable cash without allowing an elective payout to take corpus back below the target. If the target cannot be reached, it selects the feasible schedule that comes closest.
Why show inflation?
The schedule is calculated in the nominal dollars that will actually move through the accounts. Inflation does not change the recommended years; it shows what those future balances and payouts may be worth in today’s purchasing power. The Annual Detail toggle applies the entered inflation rate cumulatively through each row’s year.
How this should be used
This is not an argument for withholding resources that students and programs need now. Institutional commitments come first. The model is most useful when an institution has philanthropic capital beyond its current requirements and wants to understand whether a different distribution schedule could expand what that capital supports over time.
A mathematical comparison, not investment advice
This tool uses the institution’s own assumptions, practices, and precedents to show one alternative to an automatic annual distribution. It cannot account for every restriction, donor agreement, liquidity requirement, market event, governance consideration, or institutional priority. Those considerations vary by institution and belong in the decision.
The goal is not to prescribe a strategy. It is to help institutions think more creatively about philanthropic surplus, see the cost of timing decisions, and ask whether their capital is being used as effectively as it could be while their funding needs are still met.