Institutions have spending and investment policies to support their endowments. Spending policies help in determining issues in long-term asset allocation. The governing bodies of colleges face the challenge of balancing the conflicting goals of supporting current operations and preserving endowment assets. Donors also expect their gifts to provide permanent support towards a specific activity, though colleges usually prefer undesignated or general donations. Spending policies act as referees in the perpetual game between current and future players. A clearly defined spending policy also frees up the asset allocation decisions and enables the fund manager to focus on investment issues.
Keywords: Oxford, Cambridge, investment policy, endowments, long-term asset allocation, endowment assets