For your foundation, put half the money you're allocating to dividend payers in the SPDR

S&P Dividend (SDY), an exchange-traded fund that tracks the 50 highest-yielding stocks in
the S&P 1500 index of large, medium, and small companies that have paid a dividend for 25
consecutive years or more. Recent yield: 3.6%. Among its holdings: household products
maker Kimberly-Clark (KMB), yielding 4.1%, and components manufacturer Leggett & Platt
(LEG), yielding 5.6%.

Then, to get to a 4% yield overall, put the rest of the money in a handful of stocks that
together will pay an average of 5%. Start with picks from the traditionally high-yielding
telecommunications and utilities sectors.

David Katz, chief investment officer of Matrix Asset Advisors in New York City, likes wireless
giant AT&T (T), which has more than doubled its cash reserves since 2006 and was recently
yielding 6.2%.

MONEY columnist Pat Dorsey, director of equity research at Morningstar, is keen on Exelon
(EXC), the country's largest nuclear plant operator, which has raised its dividend 5.6%
annually over the past five years and now yields about 5.2%.

Then spread the rest among different industries and regions. Laton Spahr, co-manager of
Columbia Dividend Opportunity, likes drug giant Merck (MRK), which yields 4.3% and uses
about 40% of its cash to pay the dividend, and Intel (INTC), yielding 3.6%, which has
boosted its dividend 17% annually over the past five years. Another smart bet: European
telecom Vodafone (VOD), which has a 48% payout ratio and currently yields 7.%.

3. Use funds as an alternate approach. Not keen on making individual picks? You can also
put together a well-diversified, high-yielding portfolio with a handful of mutual funds and
ETFs. Once again, use the SPDR S&P Dividend ETF as a core holding, putting about 25%
of the money you're allocating to dividend payers in it.

Add even more yield by putting another quarter each into the market's two highest-paying
sectors with the Utilities Select Sector SPDR (XLU), yielding 4.1%, and iShares S&P Global
Telecommunications (IXP), doling out 4.4%, suggests Scott Burns, director of ETF research
at Morningstar.

Then, for international diversification, split the remainder between Vanguard European
(VGK), yielding 4.2%, and Matthews Asia Dividend (MAPIX), with a payout of 3.3%. Average
yield on the portfolio of five funds: about 4%.

Or if you'd prefer to leave the yield-hunting entirely to a portfolio manager, look at Columbia
Dividend Opportunity (INUTX). The fund aims to pay out 1½ times the yield of the S&P 500
and counts AT&T, Intel, and Merck among its biggest holdings. Recent yield: 4%.