The historical record is clear that the Executive Board of the American Library Association continually resisted the temptation of removing the capital funds of the Endowment. During the first 80 years of the Endowment Fund operation it appears, through historical record, that only the interest earned on the Endowment funds were used for any Association purposes. It was clearly the intention of the American Library Association membership to use earnings for program enhancement. The following guidelines clarify the Constitution Article IX and ALA Policy 8.5.1. Unless specified, they apply only to the ALA Endowment Fund.
Divisions follow the Division Operational Practice on Endowments.
The ALA Endowment Fund is by its very nature a complex fund with numerous purposes. For purpose of investment efficiency, these funds may be invested together, with separate reporting of each fund as necessary and appropriate. The Executive Board has the power to spend principal from the Board-Designated Fund to meet emergency situations. When the Board spends principal, a reimbursement plan will be established with the Endowment Trustees for repayment of the principal, plus interest at a rate equal to the net earnings of the endowment as reported to ALA from the Endowment Fund manager. Repayment will begin the fiscal year following the withdrawal at a rate that will achieve total repayment of the principal and interest within five years.