Endowment and Spending Calculator October 2014 “Creating Transformational Gifts”

Endowment and Spending Calculator -- The Power of Compounding Variable Inputs: Starting Market Value of Endowment or Gift, Assumed Rate of Return, and Spending Rate input in yellow fields. Model grows endowment or gift value for one year at the assumed rate of return, at the end of the year subtracts the spending that is to be applied to support programs and/or operations, and reinvests the difference between the return achieved and the spending. This reinvested amount is then grown at the assumed rate of return for the next year, and at the end of the year, the spending is deducted, and the remaining balance is reinvested. Exhibits that follow illustrate multiple rates of return and spending rates to help develop input assumptions for the model. The sources for these exhibits are the UWW “Endowment Investment Best Practices Toolkit” and the UWW “2014 Report on United Way Endowments”. 2

Endowment and Spending Calculator Sample Model Output and Sample Exhibit Principal($) Beginning of Year Market Value Rate of Return(%)8Assumed Rate of Return for Full Year Spending (%)4 Annual Spending Deducted at End of Year YearValue($)Spending ($)Net Value($) Cumulative Spending Used ($) 1 1,080,000 43,200 1,036,800 43, ,119,744 44,790 1,074,954 87, ,160,951 46,438 1,114, , ,203,674 48,147 1,155, , ,247,969 49,919 1,198, , ,293,894 51,756 1,242, , ,341,509 53,660 1,287, , ,390,877 55,635 1,335, , ,442,061 57,682 1,384, , ,495,129 59,805 1,435, ,032 Cumulative Spending 1,244,529 3

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Investment Performance Rankings Source: 2014 United Way Endowment Survey and Dimensional Fund Advisors Three-year Annualized Return 75 th Median th Mean N MARKET INDICES S&P 500 Index MSCI EAFE Index LT Govt Bonds One Month U.S. Treasury Bills

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Spending Rates Calculated over Varying Time Periods Source: 2014 United Way Endowment Survey 1 Year2 year3 year 75 th 5.0% Median4.9%5.0%4.5% 25 th 4.0%2.5% Mean4.6%5.0%3.7% N18113 Spending rates were reported to be calculated on a multi year or multi quarter basis relative to average market value of the endowment portfolio. Time Period over which Spending Rate is Calculated

For further information, contact Evelyn Morgner Manager, Endowment and Planned Giving Services, Investor Relations United Way Worldwide 701 N. Fairfax St. Alexandria, VA 22314, USA telephone ext 341