Investment Strategy for Foundations and Endowments

ABC Foundation is an institutional investor that manages an endowment of $500 million. The foundation aims to support educational initiatives and scholarships for underprivileged students while maintaining the purchasing power of its asset base over the long term. Recently, the board of trustees discussed adjusting the investment strategy to align with their updated spending policy, which now allows for a maximum annual withdrawal of 5% of the portfolio's market value. Given these considerations, what investment approach should the foundation favor to best achieve its goals?