Endowments and Foundations - Articles & White Papers
Institutional research and articles covering investing at university endowments, foundations, non-profits and charities. These papers will be of particular interest to university endowment CIOs and other senior endowment investment management staff. A number of white papers examine endowment asset allocation - examining the so-called "endowment model" pioneered by the Harvard and Yale university endowments, represented by a well-diversified portfolio with a relatively high asset allocation to alternative investments. Other popular papers examine trends in university endowment investing and other drivers of endowment asset allocation....
Other topics of inveterest to endowment CIOs include university endowment investment performance and the potential for endowment investments to impact the world positively, investing according to an ESG or SRI philosophy. A key challenge for university endowments, foundations and charities is to withdraw cash in a sustainable manner, and a number of reports look at sustainable "withdrawal rates". A number of broader investment concepts are considered from an endowment/foundation perspective, such as the outsourced chief investment officer (O CIO) model, risk management and active equity investment. Further research articles and surveys in this section cover issues related to endowment investment performance, investment risk tolerance, and strategies for nonprofit institutional investors. This endowment investing topics tends to be followed not just by university endowment CIOs and senior investment staff, but also by those who are seeking to market investment products to endowment funds.
Yale’s Endowment generated a 5.7% return, net of fees, in fiscal 2019.Over the past ten years, the Endowment grew from $16.3 billion to $30.3billion. With annual returns of 11.1% during the ten-year period, the Endowment’s performance exceeded its benchmark and outpaced institutional fund indices. For four of the past ten…
Fiscal year 2019 was a curious year for the Ivy League endowments. In a year with strong returns in key private market investment classes, the average Ivy underperformed a traditional domestic balanced 60-40 portfolio in FY 2019. Ivies also experienced a wider dispersion of returns and saw a shift in the historical…
There is now a critical mass of investors who recognize that issues of equity and environmental impact are central to the success of businesses and the long-term health of the economy as a whole. Endowments and foundations, charged with stewarding resources in the public interest over the long term, are increasingly…
This primer is intended to be a catalyst for conversation and action on racial equity for fiduciaries of university endowments who are looking to learn more about the current state of racial inequity in the U.S. as it relates to the long-term sustainability of the economy.
What are the basic features of donor-advised funds (DAFs) and what are the considerations in the asset allocation decision for a given donor? This brief blog post explains further.
New data from CAPTRUST shows there is a continued misalignment between foundations’ and endowments’ expected returns, risk preferences and asset allocations.Discussing the findings with PLANADVISER, James Stenstrom, senior manager of asset and liability at CAPTRUST, and Eric Bailey, principal and financial adviser at…
Universities, philanthropies, cultural institutions and other not-for-profit organizations are contending with significant financial hardship brought on by COVID-19. BNY Mellon investigates performance among large and small endowments, and presents some interesting observations.
Endowment funds in the U.S., large and small, significantly underperform passive investment. Moreover, an analysis of the performance of 43 of the largest individual endowments over the 11 years ended June 30, 2019, reveals that none outperformed with statistical significance, while one in four underperformed with…
In State Street's continuing CEO Perspectives series, Ron O’Hanley speaks to Jagdeep Singh Bachher, the Chief Investment Officer for the University of California, one of the largest research universities in the world. Jagdeep describes his own ESG journey as an investor and argues that investment team cultural changes…
CAPTRUST subject matter experts dive into the results of their endowment and foundation market survey. Participants will gain insight into peer data from the nonprofit sector as CAPTRUST's industry experts present survey findings on demographics, performance trends, objectives and risks, budgeting, and more.
This annual study analyzes return data and a broad range of related information gathered from U.S. colleges and universities, both public and private, as well as their supporting foundations. The size and scope of the study make it the most comprehensive annual report on the investment management and governance practices and…
As well as discussing key financials and investments, this Report from Princeton outlines some of the outreach and student transfer programs that the University offers.
Most colleges and universities of all sizes have an endowment, a fund that provides a stream of income and maintains the corpus of the fund in perpetuity. Organizations with large endowments, such as colleges, universities, and private foundations, all finance a significant part of their operations through the return…
Between 2011 and 2018, 35 American universities and colleges divested, either partially or completely, their endowments from fossil-fuel holdings, marking a shift toward sustainability in university endowment investment. However, the decision by these universities to divest was often marred by controversy, owing to conflicts…
We collect tax return data from all 311,222 public NPOs in the United States over the 2009-2017 period to study the asset allocation choices and investment returns of their endowment funds. One in nine public NPOs have endowment funds. The majority of funds allocate their assets conservatively to low-risk assets, and as a…
Alpha, or outperformance of a benchmark, can be generated in many ways within a portfolio. It can be created by picking the top hedge fund managers, or by capturing the illiquidity premium via alternative assets. Venture capital is a major source of alpha for long-term investors. Alpha can also be achieved by active asset…
Three eras define the performance of endowments since 1974. Large funds underperformed by the approximate margin of their costs in the first and third eras. In the middle era, they outperformed by a wide margin. Over the full period, large endowment fund managers, collectively, added value for their institutions. Small…
Unlike the trial-by-fire triage that universities were forced to endure when Covid-19 arrived in spring, schools have had a few months to prepare a thoughtful approach on how to re-open this fall. So what can students and parents expect from this year’s college experience, and what’s the financial outlook for families and…
