Endowment payout for both the UM Foundation and UM Treasury Accounting endowments is calculated by multiplying 4.5% by the average past 20 qtr endowment value. For units with many endowments, this is a time intensive task. Thus, the rule above will provide a reasonable payout projection. However, consideration should be paid to individual endowments with a lot of activity (including but not limited to large new gifts or disbursements) or that were recently created (during and since FY08).
Some background information: As a whole, endowment values decreased nearly 30% during FY08 and FY09 depending on the particular endowment. Endowment values gained during FY04-07 an average of 10% each year. Values have experienced modest increases during the first two quarters of FY10.
If you have further questions about endowment projections, contact your senior accountant on your financial service team.