The control of endowment spending, a critical factor in maintaining value over time, is a responsibility that is vested in the trustees of the University. Each year as part of the budget process, the trustees are asked to approve a level of spending that is within the range of 4.5 to 5.5 percent of a 12-quarter average market value, lagged one year. The flexibility afforded the trustees by virtue of the range allows them to lower the rate of spending during periods of market appreciation and to increase it during periods of decline. This spending rule, which was implemented with the fiscal year 2005, is designed to strike a healthy balance between long-term asset preservation, prudent spending for current operations, and capital budget support. It has the added benefit of protecting the payout from sudden swings or shocks in the financial markets.