From: Jeff Lennon, Interim Chief Financial Officer
Date: March 4, 2026
Re: Endowment Payout Planning for Fiscal 2026

To assist with year-end planning, I am writing to provide a projected endowment payout rate for fiscal 2026. Subject to changes in investment markets over the final months of the fiscal year, the net endowment payout for program spending will be $10.34 per unit, excluding the allocation for investment in fundraising capacity via the AIM program.

As you know, beginning April 30, 2024, the University initiated a new Advancement Investment Model (AIM) to support divisional and university-wide priorities for growth in fundraising and engagement. The AIM assessment is set at 0.26% based on a target payout of 4% of the five-year average market value of the endowment. For 2026, this results in an AIM allocation of $0.72 per unit. The University Advancement office will coordinate with Planning & Budget and each division to manage the allocation of funds generated via the AIM.

The total endowment payout of $11.06 per unit, inclusive of AIM, represents a 4.0% increase over last year’s payout rate. The increase in payout takes into account the following factors:

• From May to January 2026, LTCAP achieved an actual return of 12.7%. Given the current period of economic uncertainty, we have conservatively assumed a moderation of this return to 7.0% by the end of the fiscal year, which is aligned with our target rate of return of 4% plus CPI.
• The projected 4.0% increase in the payout rate for fiscal 2026 is intended to provide funding for increased operating costs due to inflation.

The gross payout of $11.06 per unit for fiscal 2026 will represent 4.0% of the 5-year average market value of the endowment. This falls within the target 3% to 5% corridor for endowment spending in accordance with policy. The distribution will provide a total of $145 million to beneficiaries and $7.8 million to support the AIM program.

More information is available in the endowment annual financial report. If you have any questions about the payout for this year, please contact Jenny Cheng, Associate Director of Restricted Fund Accounting at jenny.cheng@utoronto.ca. The annual payout for 2026 will be distributed by Monday, April 20, 2026.