Spending Rule Policy

Spending Rule Policy

Money will be distributed from the FUND upon written request of the Vestry and with the approval of the COMMITTEE for those uses which conform to the purposes and restrictions established by donors or incorporated in the Enabling Resolution.

Funds available for distribution will be determined by using a total return principle, i.e., return derived from dividends and interest as well as realized and unrealized capital gains.[i] The funds available for distribution during any one year will be limited to a percentage of the market value of the corpus that is based on a three-year rolling average,[ii] with measures taken at the end of each of the preceding twelve quarters.  The market value for this purpose will be taken net of the fees for investment management.


The percentage of the FUND made available for distribution shall be determined each year by the COMMITTEE and will normally fall in the range of three to five percent. In so doing, market performance of the portfolio will be an important consideration. It will be the goal of the COMMITTEE to grow, or at least maintain, the purchasing power of the FUND taking inflationary effects into account.

Any unexpended funds from those available for distribution in a given year will be accrued and will continue to be considered available for distribution in subsequent years unless otherwise designated by action of the COMMITTEE with the approval of the Vestry. Expenses related to the management and administration of the FUND will be deducted from the funds available for distribution.


[i] A “total return” spending policy establishes value based on income, dividends, and capital appreciation (depreciation). An “income only” policy considers only the interest earned and dividends paid.


[ii] Some churches use a five-year rolling average to smooth out the ups and downs of the market. Churches just starting out that do not have a multi-year average sometimes apply their spending rule to 80% or 90% of the first year net average value.