5% spending target foundations and endowments?

I know that Foundations and Endowments are used interchangably, but is there the 5% spending rule on endowments as well to maintain the tax status?

The 5% rule is only for Private and Family Foundations, it does not apply to community foundations or endowments. This tax constraint would therefore be given in the reading for an essay type questions.

that is why there is a lot of pressure and controversy surrounding endowments.

Yes, there should be a spending rule enforced on endowments; however if you are in the PE or VC world, you should thank your lucky stars for them because their ability to bear risk is enormous; much more so than institutional surplus portfolios.

hey guys, This confused me, too. Thought that 5% min spending req. was for Foundations only but I think I saw some questions involving such a req. for foundations, too…

malek_bg Wrote: ------------------------------------------------------- > hey guys, > > This confused me, too. Thought that 5% min > spending req. was for Foundations only but I think > I saw some questions involving such a req. for > foundations, too… I am not sure I understand your question?