Endowment and Foundation Series

The Foundation of Good Governance for Endowments and Investment Committees

Suboptimal governance can extend disappointing performance or perpetuate suboptimal past decisions. By contrast, good governance leads of its own design to necessary mid-course corrections. To create the conditions for good governance, endowments should assess whether they have in place the appropriate model for portfolio oversight and management, are upholding their fiduciary responsibilities, and are learning about peer best practices in structure, process, policies, and role of the portfolio.

The Missing Metric for Endowment Growth: Net Flow Rate

By comparing the net flow rate with the real investment return, an institution can determine whether its LTIP is successfully sustaining its role in the institution’s business model The net flow rate is the regular LTIP payout rate plus reinvested operating surpluses, capital additions, and capital withdrawals. Over the long term, the real investment return…