{
  "slug": "endowment-payout",
  "title": "Endowment Payout Calculator",
  "heading": "Endowment Spending Policy Calculator",
  "category": "financial",
  "url": "https://www.revenuelab.fyi/toolbox/endowment-payout",
  "summary": "Annual distribution, real growth, and corpus purchasing power over time.",
  "description": "A spending policy is a bet that returns exceed payout plus inflation plus fees. Project the annual distribution under a rolling-average policy and see whether the endowment's purchasing power grows, holds, or erodes across decades.",
  "formula": "Payout = corpus × rate; real growth = return − payout − inflation − fees.",
  "dateModified": "2026-09-30",
  "run_url": "https://www.revenuelab.fyi/api/public/calc?tool=endowment-payout",
  "inputs": [
    {
      "id": "corpus",
      "label": "Endowment corpus",
      "kind": "number",
      "hint": null,
      "default": 5000000,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "payout",
      "label": "Spending rate",
      "kind": "number",
      "hint": null,
      "default": 4.5,
      "unit": "%",
      "min": 0,
      "max": 12
    },
    {
      "id": "returns",
      "label": "Expected nominal return",
      "kind": "number",
      "hint": null,
      "default": 7,
      "unit": "%",
      "min": -5,
      "max": 20
    },
    {
      "id": "inflation",
      "label": "Inflation",
      "kind": "number",
      "hint": null,
      "default": 2.6,
      "unit": "%",
      "min": 0,
      "max": 15
    },
    {
      "id": "fees",
      "label": "Investment & admin fees",
      "kind": "number",
      "hint": null,
      "default": 0.85,
      "unit": "%",
      "min": 0,
      "max": 5
    },
    {
      "id": "gifts",
      "label": "New gifts to corpus per year",
      "kind": "number",
      "hint": null,
      "default": 100000,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "years",
      "label": "Years to project",
      "kind": "number",
      "hint": null,
      "default": 25,
      "unit": null,
      "min": 1,
      "max": 75
    }
  ],
  "outputs": [
    {
      "id": "firstPayout",
      "label": "First-year distribution",
      "format": "currency",
      "hint": null,
      "primary": true
    },
    {
      "id": "endCorpus",
      "label": "Corpus at horizon (nominal)",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "realCorpus",
      "label": "Corpus in today's dollars",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "purchasing",
      "label": "Purchasing power vs today",
      "format": "percent",
      "hint": null,
      "primary": false
    },
    {
      "id": "totalPaid",
      "label": "Total distributed over the period",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "realGrowth",
      "label": "Annual real growth rate",
      "format": "percent",
      "hint": null,
      "primary": false
    }
  ],
  "worked_example": {
    "inputs": [
      "Endowment corpus: 5000000 $",
      "Spending rate: 4.5 %",
      "Expected nominal return: 7 %",
      "Inflation: 2.6 %",
      "Investment & admin fees: 0.85 %",
      "New gifts to corpus per year: 100000 $",
      "Years to project: 25"
    ],
    "outputs": [
      "First-year distribution: $225,000",
      "Corpus at horizon (nominal): $10,591,283",
      "Corpus in today's dollars: $5,575,252",
      "Purchasing power vs today: 111.5%",
      "Total distributed over the period: $8,430,771",
      "Annual real growth rate: -0.95%"
    ]
  },
  "how_to": {
    "title": "How to use this",
    "steps": [
      "Enter endowment corpus ($).",
      "Enter spending rate (%).",
      "Enter expected nominal return (%).",
      "Enter inflation (%).",
      "Enter investment & admin fees (%).",
      "Enter new gifts to corpus per year ($).",
      "Enter years to project.",
      "Read your first-year distribution on the right — it updates as you type.",
      "Hit Share to keep the scenario or send it to someone."
    ]
  },
  "scenarios": [
    {
      "name": "Conservative",
      "description": "Lower-end numbers — what if things land soft?",
      "values": {
        "corpus": 3000000,
        "payout": 2.6999999999999997,
        "returns": 4.2,
        "inflation": 1.56,
        "fees": 0.51,
        "gifts": 60000,
        "years": 15
      }
    },
    {
      "name": "Typical",
      "description": "Defaults — the most common real-world setup.",
      "values": {
        "corpus": 5000000,
        "payout": 4.5,
        "returns": 7,
        "inflation": 2.6,
        "fees": 0.85,
        "gifts": 100000,
        "years": 25
      }
    },
    {
      "name": "Ambitious",
      "description": "Higher-end numbers — what if things really pop?",
      "values": {
        "corpus": 8000000,
        "payout": 7.2,
        "returns": 11.200000000000001,
        "inflation": 4.16,
        "fees": 1.36,
        "gifts": 160000,
        "years": 40
      }
    }
  ],
  "limitations": [
    "Results are estimates before tax, fees, and inflation unless an input explicitly covers them.",
    "Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.",
    "This is educational maths, not financial advice. Check anything contractual with the lender or your accountant."
  ],
  "faq": [
    {
      "q": "Why is 4–5% the standard spending rate?",
      "a": "It is roughly what a diversified portfolio can distribute while still covering inflation and fees. Push past 6% and the endowment usually shrinks in real terms across a full market cycle."
    },
    {
      "q": "What is a rolling-average policy?",
      "a": "Applying the spending rate to the trailing 12- or 20-quarter average market value rather than the current value. It smooths distributions so a bad market year does not force a sudden program cut."
    }
  ],
  "related": [
    "https://www.revenuelab.fyi/toolbox/nonprofit-overhead-ratio",
    "https://www.revenuelab.fyi/toolbox/fundraising-goal"
  ],
  "license": "CC-BY-4.0",
  "citation": "RevenueLab — Endowment Payout Calculator (https://www.revenuelab.fyi/toolbox/endowment-payout)"
}