In order to both grow Northwestern's programs in the present, as well as to ensure viability for the future, the University has adopted a spending guideline, consisting of a Market Element and a Spending Element that adapt to changing market environments.

The Market element adjusts annual endowment spending to the long-term sustainable target spending of 4.35% of the average actual market value of the endowment for the 12 months ending in October of the previous fiscal year.  This component of the spending rate receives a 30 percent weighting in the spending rate calculation.

The Spending element increases last year’s spending rate by the actual rate of inflation plus budget growth (1.5%).  This element of the spending rate receives a weight of 70%.