There is an art and a science to building an effective investment committee. Governance excels when a diverse group comes together with complementary contributions, a shared understanding of their role in the endowment’s long-term goals, and a spirit of debate and respect that makes the work enjoyable.
The work of successful investment committees are supported by disciplined processes and work habits. Their work is conducted in a respectful and welcoming culture, with strong leadership, clear expectations, and intellectual stimulation.
For non-profit institutions, the disruptions caused by the COVID-19 virus, and the speed by which these disruptions have materialized, create a perfect financial storm.
Annual distributions from the endowment are a source of supplemental operating revenue for most endowed institutions. An institution’s endowment spending policy provides a basis for the calculation of the annual distribution, serving as a bridge that links the long-term investment portfolio and the enterprise. The data and analysis in this report cover a variety of spending topics, including spending rule types, the endowment’s support of operations, and effective spending rates.
Community foundation assets have grown steadily over the years, accumulating a mix of endowment funds and other funds with more expedient spend-down expectations. With the right expertise and attention, the endowment model can be applied to these complex, dynamic assets to differentiate the foundation and deliver on its mission. This paper discusses how community foundations can develop customized investment programs to better support their long-term goals.
Due to mounting pressures in the healthcare industry, many hospitals will likely rely on spending from investment pools to support operations and capital plans. While investments will be a source of funding, our survey of healthcare clients indicates that for many, investment strategy will balance spending needs and growth goals.
The most effective investment strategy will acknowledge the uncertainty associated with future cash flows, but avoid being overly conservative so as not to impair future cash flow generation.
Annual distributions from the endowment are a source of supplemental operating revenue for most endowed institutions, as an institution’s spending policy serves as a bridge that links the long-term investment portfolio and the enterprise. The data and analysis in this report cover a variety of spending topics including spending rule types, the endowment’s support of operations, and effective spending rates. This year’s report draws on a supplemental study Cambridge Associates conducted in April 2018 to dive deeper into some technical factors of spending policy, specifically focusing on spending from new endowment gifts.
Investing in revenue development and fundraising while simultaneously pursuing goals for asset growth is a balancing act. This paper outlines the various funding mechanisms public universities can use to pay for development efforts, and the implications they have on the investment portfolio and enterprise as a whole.
Setting an appropriate spending policy is an important part of effective endowment management, as an institution’s spending policy serves as a bridge that links the long-term investment portfolio and the enterprise. The data and analysis in this report cover a variety of spending topics including spending rule types, the endowment’s support of operations, and effective spending rates. This year’s report draws on a supplemental study Cambridge Associates conducted in March 2017 to dive deeper into the topics of spending policy implementation and factors that may lead to policy changes.