The best way to answer this question is with an illustration. Assume a $100,000 endowed scholarship fund has an 8% annual rate of return. Per Flintridge Prep’s spending policy, up to $4,500 (4.5%) of the earnings will be available for financial assistance scholarships the following year. The remaining 3.5% will be reinvested back into the fund, enabling it to grow over time. As the endowment fund grows, the income available from the endowment will also grow; as a result, the income available for financial assistance scholarships will increase. For instance, if the value of the endowment increases to $110,000, the amount available for scholarships will increase to $4,950.