Foundation & Investment Horizon - R14 Example 12

[Miamia]

In this example, the investment product is chosen based on investment horizon, which is different from foundation’s life. Please help elaborate the basis of using CF.
Is it a general concept that investment horizon is always half of foundation’s life if contributions and spends are spread over the life cycle. Is it a strict formula (also in practice) applied for this case? I’d think many foundations have similar cash flow patterns. Why isn’t it applied for DB for example?
Please confirm for the sake of my calculation: is it 10 years/2 = 5 investment horizon given foundation’s life=10 years? Could you point out the relevant concept/theory reading? If the only contribution is at the beginning of the period, will investment horizon be 10 years? Thanks!
Example 12, Reading 14, Curriculum L3 jun 15

 

[cpk123]

The statement of relevance - it is expected to fund itself out of existence at the end of 10 years. So the average life of 5 years is used in this case.

Quote:
The fund’s charter expressly decrees that the fund should spend itself out of existence within 10 years of its founding rather than trying to become a permanent institution.

 

[Miamia]

Thanks cpk123! I noted this cash flow pattern (I meant to ask about further reading out of this specific example).
If the spending was specified that it’d sponsor significant project one every 3 years. Will investment horizon be different? I want to understand if the pattern of spending is a determinant at all or in all cases we would use the average of cash outflow horizon. Thanks!