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Wednesday, January 17, 2018

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A Delicate Balance
Norman Nabhan

February, 2009

The rising stock market of the 1990’s led some critics of not-forprofi organizations to call for greater spending levels based on gains ealized on endowed portfolios. Some critics called for the raise of the nnual payout requirement for private foundations from the currently andated 5% to 6%, 7% or even 8% of assets. Unfortunately, the days f outsized performance results could not to be sustained indefi nitely.

Recent capital market results and conditions have shown, in retrospect, hat such spending targets could have posed a formidable challenge or organizations seeking to protect their foundations from serious rosion—or spending into extinction.

This paper is intended to help foundation and not-for-profi t managers nderstand the spending and investment choices they face. It describes he components of an eff ective planning process and explains how ff ective portfolio management can help trustees and directors prudently manage both their current and future needs—particularly through eriods of market volatility.

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Norm Nabhan, CIMA is Managing Director of Investments, Institutional Consulting Director of Citi Institutional Consulting.


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Houston, Texas 77056

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