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Unfortunately I think there is something to what you say, since trustees have wide latitude in determining what should be spend from "endowment." There is still some concept of fiduciary duty to the organization, however, and the need to retain some of the purchasing power of the gift. In fact, most large charities spend their "endowment" at a rate between 4.5% and 5%, thus retaining a significant portion as permanent endowment. In addition, FASB tells accountants that they should get boards operating under UPMIFA to say what portion of a gift is to be considered permanently restricted. Although that has no force of law, for the reasons I have previously expressed, I think it all ought to be considered permanently restricted under UPMIFA. (See Ready Reference Page: "Permanently Restricted Assets Should Be Considered Permanently Restricted Under UPMIFA.")

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