All references in my posts refer to permanently restricted funds, which by our policy can be increased through the board action of "rolling" the endowment earnings into its "principal." By choice, we are permanently restricting those funds and, also by policy, cannot rescind those decisions.

Our endowment restrictions negotiated with donors are intentionally very broad while also fulfilling the donor's purpose. One of our more restrictive endowments is for the stated purpose of "maintenance and restoration of rolling stock [at our museum]." That works fine so far and the accounting isn't that bad. Pooled investments for endownment funds with diverse interests have been more challenging, but we're managing.

Regarding our target annual investment revenues of 5% of NAV. I would not say these are "too conservative". You may remember the blood bath in the markets of a few years back. We weathered those well losing less than 3% while overall market returns were -6 to 9%. The following year we had recaptured those losses and were again making distributions from the endowments. "Too conservative" are scary words in regard to endowment discussions.

I am not sure how "spending needs" play into this discussion. Regarding our largest endowment established for the purpose of supporting unrestricted activities, our distribution limit is 5% of NAV. So is the investment target. If we earn more, we have the choice of "rolling" it or holding it as earnings to augment the next year's earnings.

Also regarding needs, a quick review of our budget reveals that about 83% is not discretionary, but pays for utilities, fuel, running maintenance, professional services and our two employees. That means that there is not a lot of lee-way in adjusting to "too rich."