Spending Policy (The Wallace Foundation, 2012)

The Foundation’s policy is to target spending on grants and qualifying distributions at an average 5.0% of assets over long periods of time. The Foundation’s Board may elect to exceed that spending rate for a limited period of time if:

• There is a compelling opportunity in a programmatic area that cannot be met by reallocating funds from other areas without acceptable sacrifice and that cannot be postponed until a later date when more funds might be available, or
• A sharp decline in support from the foundation would threaten key non-profit grantees whose health is important to sustain for the long-term effectiveness of the foundation’s programs.

Spending in years after the limited period should be moderated until such time as the 5-year average of spending returns to 5%, while continuing to comply with IRS payout requirements.