GEOList Summary: Spending Policies 2010

Saint Luke’s Foundation is preparing for a board/staff retreat in the spring that will include a reevaluation of our spending policy. As a private foundation, our spending policy is primarily determined by the IRS 5% payout requirement. Increasingly we are finding that 5% alone is insufficient to support a safety net of local health and human services, a core commitment of our responsive grantmaking portfolio. While we have frequently adopted annual budgets greater than 5% to smooth out market fluctuations and maintain a stable level of giving, we see the need to adopt a formal spending policy that better complements our theories of change. We are preparing to discuss the implications of everything from staying at 5%, increasing the payout percentage, establishing a “giving floor” below which we will not go regardless of our asset size, to radically reframing our work by establishing a sunset date. But we are particularly interested in hearing about other alternatives along that continuum. Please share any unique or innovative spending policies your organizations have adopted and the processes used to make those decisions. In addition, if you can suggest articles that might inform this decision and/or a keynote speaker who would be particularly effective, we would appreciate that as well.