Spending Policy

Carnegie Corporation of New York adheres to a spending policy that is designed to weather short-term market fluctuations to provide better predictability and long-term stability in grantmaking. This helps sustain the Corporation's grantmaking efforts in bad times as well as good, allowing us to fulfill Andrew Carnegie's legacy of using private wealth for the public good in perpetuity.

To lessen the impact on the budget from short-term market volatility, Carnegie Corporation uses a process known as smoothing. A common form of smoothing is to target spending at a specified percentage, not of the current market value of the institution’s assets, but of a moving average of market values.

Carnegie Corporation uses an equally weighted, 12-quarter lagging average of the assets’ market value to calculate its 5.5 percent yearly spending target.

When smoothing the budget, the actual spending percentage in any given year deviates from the spending target by a different amount each year. When markets are up, actual spending drops below the yearly spending target because the 12-quarter lagging average market value is below the current value. And, when markets are down, actual spending rises above the target percentage for the same reason. Over the long run, budget smoothing should result in an actual payout rate of 5.25 percent, compared to the target’s 5.5 percent rate.

During periods of extreme market dislocation, such as the period from late 2008 through early 2009, the Corporation retains the ability to adjust its spending allocation in order to enhance preservation of capital for the long term. During these periods, unduly high levels of spending could jeopardize the Corporation’s mandate of preserving purchasing power net of spending.

In the Deed of Gift establishing the Corporation, Andrew Carnegie clearly spelled out that the foundation was created to carry out its philanthropic work in perpetuity, so that “even after I pass away the [wealth] that came to me to administer as a sacred trust for the good of my fellow men is to continue to benefit humanity for generations untold…”

For the ten years ended September 30, 2012, the Corporation awarded 5,462 grants totaling $1,108.3 million and incurred expenses of $158.9 million for  program management, direct charitable activities and administrative expenses, excluding investment expenses, and $38.6 million for taxes, for a total of $1,305.8 million.

Assets and Grantmaking (years ending September 30)

YearInvestment Assets: U.S. Dollars (in billions)Number of GRants *Amount Approved: U.s. Dollars (in millions)*
2012 $2.764   $111.2
2011 $2.547   $93.2
2010 $2.531 210 $96.7
2009 $2.429 860 $112.2
2008 $ 2.630 905 $194.5
2007 $3.073 887 $132.6
2006 $2.529 873 $114.7
2005 $2.244 740 $91.4
2004 $1.955 577 $102.7
2003 $1.823 419 $59.0
2002 $1.611 398 $150.1
2001 $1.711 241 $84.4
2000 $1.928 273 $59.8
* Includes grants made possible by an anonymous donor who worked through the Corporation from 2002 through May 2009 to support arts and social service organizations located in each of New York City's five boroughs. During this period, 2,597 of these annual grants have been made to small and medium-sized nonprofit organizations totaling more than $175 million. These grants cannot be applied for.