Bill Jarvis

Constraints Faced by Healthcare Endowments

Posted by Bill Jarvis on Feb 17, 2017

Topic: Asset Allocation | Industry Knowledge

As a result of the evolving landscape of the healthcare industry, organizations are increasingly being shaped by pressures affecting both the revenue and expense sides of the income statement.

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Does Your Investment Policy Statement Account for Risk?

Posted by Bill Jarvis on Jan 20, 2017

Topic: Governance and Policy | Industry Knowledge | Investment Strategy | Risk Management

In the past, many investment policy statements gave relatively cursory treatment to risk, its quantification and its potential impact on the asset pool. Market collapses and credit crises demonstrated that many institutions’ portfolios carried unacknowledged risks, that their risk profiles in general were higher than they thought, and that the risk tolerance of their fiduciaries was lower than acknowledged. Today, then, it is entirely appropriate to put risk at the top of the process of investment policy development.

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Healthcare Endowment Management: 3 Questions to Consider

Posted by Bill Jarvis on Jan 10, 2017

Topic: Governance and Policy | Industry Knowledge | Investment Strategy

The healthcare business model is changing. Mounting cost pressures are forcing small and mid-sized nonprofit healthcare organizations to consider adopting endowment management practices similar to those used elsewhere in the nonprofit sector. In the face of declining reimbursement from insurance companies and governmental payers, nonprofit healthcare organizations are confronted with an unprecedented series of challenges.

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Assessing the State of Healthcare

Posted by Bill Jarvis on Jan 10, 2017

Topic: Governance and Policy | Industry Knowledge

Healthcare organizations are challenged to maintain positive operating margins in the face of declining insurance reimbursements and governmental payers.

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Drafting Your Investment Policy Statement: 10 Critical Issues

Posted by John Griswold, Bill Jarvis on Dec 12, 2016

Topic: Governance and Policy | Industry Knowledge | Investment Strategy

There is no single ‘right’ investment policy statement; each institution’s board must craft a statement that responds to the needs of the institution and the preferences and risk tolerances of the trustees. Annual review of the statement by the board can help to ensure...

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The Investment Policy Statement

Posted by John Griswold, Bill Jarvis on Dec 9, 2016

Topic: Governance and Policy | Industry Knowledge | Investment Strategy

Successful investing for long-term funds requires a strategic plan. This is true despite – indeed, because of – the fact that the future is unknowable. The plan must be specific, embodying in concrete terms the best thinking of the board of trustees about the investment pool, its goals and purposes; but it also needs to be sufficiently flexible to guide the board through environments that may be very different from those prevailing at the time of its adoption.

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How Does Board Structure Affect Performance

Posted by John Griswold, Bill Jarvis on Oct 19, 2016

Topic: Governance and Policy | Industry Knowledge

The structure of a board has an important influence on its effectiveness, and being cognizant of these matters is essential to improving a board’s performance. In this article, we'll discuss four major factors that relate to the structure and composition of effective boards.

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The Fiduciary Case for Carbon Exposure Management Now

Posted by Jess Gaspar, Bill Jarvis on Oct 18, 2016

Topic: Investment Strategy | Responsible Investing

The year 2015 featured a wealth of global warming headlines: the December Paris Agreement on climate change, the Pope’s Encyclical, the collapse of oil prices, the Obama administration’s Clean Power Plan, France’s mandatory carbon reporting and the New York Attorney General’s subpoena of Exxon Mobil. It was also the warmest year on record.

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Fiduciary Responsibility:
A Board’s Purpose and Role

Posted by John Griswold, Bill Jarvis on Sep 27, 2016

Topic: Governance and Policy | Industry Knowledge

Achieving excellence in board governance requires success in four crucial areas: capable leadership, a sound organizational structure, attention to fiduciary responsibility and a culture that binds the board members to each other in a cohesive unit.

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Five Laws that Led to Uniformity in Nonprofit Governance

Posted by Bill Jarvis on Jul 26, 2016

Topic: Governance and Policy | Industry Knowledge

As the American economy began to function on a more truly national basis in the closing decades of the nineteenth century, it became apparent that users of the legal system – including corporations, financial institutions and trustees – would benefit from a greater degree of legal uniformity in nonprofit governance among the states. At least with respect to the laws affecting investment and trust matters ...

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A Framework for Nonprofit Governance

Posted by Bill Jarvis on Jul 12, 2016

Topic: Governance and Policy | Industry Knowledge

Regulation of nonprofit investment and governance practices have migrated from traditional common-law principles to codified statutory law, affecting areas of nonprofit governance not addressed in the original legislation. Two important laws enacted in the last 15 years have had an impact far beyond the intent of their original authors, causing major, if little-noticed, changes in nonprofit governance; The Sarbanes-Oxley Act of 2002, and the Uniform Prudent Management of Institutional Funds Act (UPMIFA). In this newly-created “normative environment,” nonprofits can appear to be departing from best practice if they fail to comply with the standards set by these laws, even if the laws were not intended to apply directly to those situations, and boards of such institutions...

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Integration of ESG Factors in Practical Steps

Posted by Bill Jarvis on Jul 1, 2016

Topic: Asset Allocation | Governance and Policy | Investment Strategy | Responsible Investing

In the current climate of slow global economic growth and resource constraints at many institutions, integration of ESG considerations in an organization’s investment portfolio may be perceived as a luxury or an unacceptable distraction. ESG implementation does not, however, need to be an all or-nothing decision. A sliding scale of engagement is available for institutions that decide to explore ESG...

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Common Concerns about Responsible Investing

Posted by Bill Jarvis on Jun 6, 2016

Topic: Governance and Policy | Investment Strategy | Responsible Investing

Discussions about whether responsible investing strategies help or hurt investment performance are complicated by the fact that, there are several broad categories of responsible investing practice and they influence portfolios in different ways. Many institutions have concerns about whether and how to apply ESG investing practices to their portfolio. These reservations stem partly from their past experience with SRI and partly because ESG investing has only recently become more widespread. While there are many concerns about responsible investing, the most common concerns...

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Risk and Investment Policy Approaches

Posted by Bill Jarvis, Brett Lane, Dana Moreau on Jun 1, 2016

Topic: Governance and Policy | Investment Strategy | Risk Management

Our new whitepaper, Striking the Balance, challenges the traditional risk/return paradigm. Listen to our webcast hosted by Brett Lane for an overview from Bill Jarvis, Executive Director of Commonfund Institute on the key findings from the paper and our Chief Risk Officer, Dana Moreau on a risk-based investment structure.

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Operating Charity Implements Risk-Based Investment Policy

Posted by Bill Jarvis on May 31, 2016

Topic: Governance and Policy | Industry Knowledge | Investment Strategy | Risk Management

Operating charity in the Northeast is in the process of implementing a risk-based investment policy for its $30 million endowment. The seven-member investment committee is comprised of individuals with experience at leading securities and investment firms. In drafting its IPS, the committee created a separate section entitled "Risk Tolerance"...

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Deciding on an OCIO Provider: Three Factors to Consider

Posted by Bill Jarvis on May 17, 2016

Topic: Governance and Policy | Industry Knowledge | Investment Strategy | Outsourced Investing

One of the most important aspects of the success of an organization’s OCIO model is defining the respective roles and responsibilities of the institution’s board, staff, investment committee and the outsourced CIO. Investment committees should think carefully about the institution’s ultimate goals in order to articulate objectives that are understandable and clear.

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Defining Investment Success for Endowments and Foundations

Posted by Bill Jarvis on May 16, 2016

Topic: Governance and Policy | Industry Knowledge | Investment Strategy | Risk Management

William Jarvis of the Commonfund Institute explains how the investment horizons and objectives are different for endowments and foundations as opposed to retail investors. He highlights the tax exempt status of these organizations as one of the biggest drivers of investment philosophy.

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Responsible Investing:
Terminology and Background

Posted by Bill Jarvis on May 9, 2016

Topic: Industry Knowledge | Responsible Investing

The terms socially-responsible investing (SRI), mission-related investing, impact investing and environmental, social and governance (ESG) investing – all frequently grouped under the heading of responsible investing – have become a familiar part of the vocabulary of institutional and retail investors. Just what these terms mean in practice, however, and how their practitioners’ claims can be impartially assessed, has been less clear.

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What is Outsourced Investment Management?

Posted by Bill Jarvis on Apr 14, 2016

Topic: Governance and Policy | Industry Knowledge | Investment Strategy | Outsourced Investing

Outsourced investment management, once primarily a solution for small institutions with limited resources, is now used by a broad range of long-term investors. When properly implemented, outsourcing can help institutions with both large and small asset pools to address portfolio complexity and risk management challenges.

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New Environmental Regulations and the Impact on Fiduciaries

Posted by Bill Jarvis on Jan 20, 2016

Topic: Governance and Policy | Responsible Investing

Developments in world financial markets seem to occur more quickly every year, requiring ever-higher levels of expertise and experience on the part of investment committees. Climate change is a more slowly-evolving issue that will require a more strategic approach from trustees and investments committees. The Paris Agreement and the Clean Power Plan clearly raise important investment considerations for institutional investors. In addition, beyond portfolio considerations, practical issues suggest themselves.

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Fiduciary Duty & Environmental Responsibility: Crafting A Low Carbon Response

Posted by Bill Jarvis on Jan 20, 2016

Topic: Responsible Investing

Developments in world financial markets seem to occur more quickly every year, requiring ever-higher levels of expertise on the part of investment committees. Climate change is a more slowly-evolving issue that will require a more strategic approach from trustees and investment committees.

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How to Calculate Investment Management Costs

Posted by Bill Jarvis on Dec 17, 2015

Topic: Governance and Policy

How do you calculate what you pay for investment management? Few aspects of financial management are more important for fiduciaries than understanding the costs paid for the management of the funds for which they have responsibility. Read our short blog on how to calculate what you actually pay for investment management.

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Understanding the Cost of Investment Management

Posted by Bill Jarvis on Oct 16, 2015

Topic: Governance and Policy | Industry Knowledge

Few aspects of financial management are more important for fiduciaries than an understanding of the cost if investment management of the perpetual funds for which they have responsibility. Our aim is to guide fiduciaries as they strive to fulfill their duties under common and statutory law.

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Legislating the Normative Environment: Nonprofit Governance, Sarbanes-Oxley and UPMIFA

Posted by Bill Jarvis on May 19, 2015

Topic: Governance and Policy

Regulation of nonprofit investment and governance practices has migrated from traditional common-law principles to codified statutory law, affecting areas of nonprofit governance not addressed in the original legislation. Trustees will do well to heed this development. This paper seeks to draw attention to recent shifts in the law and its implications, and to trace a transformation in thinking that has gained momentum in recent years.

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Viewpoint: Changing our Minds

Posted by Bill Jarvis on Jan 12, 2015

Topic: Governance and Policy | Industry Knowledge

It is often said that we live in a world of change, but it is surprising how slowly that change can occur. Seven years after the onset of the Great Recession, many business school students are still taught that portfolio volatility is a suitable proxy for risk. In an encouraging contrast, however, this year’s NCSE data show that endowment fiduciaries at educational institutions are increasingly—and meaningfully—assimilating new practices in measuring and overseeing risk, taking steps to acknowledge and understand it in its various forms.

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Viewpoint: Alphabet Soup – Responsible Investing

Posted by Bill Jarvis on Oct 12, 2014

Topic: Governance and Policy | Industry Knowledge | Responsible Investing

Responsible investing has been used as an umbrella term that includes some investment practices of long standing and some that are relatively new arrivals. Simple, clear definitions of responsible investing practices are not difficult to find; here are the ones...

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Greenhouse effect

Posted by Bill Jarvis on Aug 17, 2014

Topic: Industry Knowledge | Risk Management

In the last five years, as world markets have recovered from the global financial crisis, institutional portfolio returns have generally been strong. While many factors have played a part in this scenario, historically low interest rates and accommodative monetary policies on the part of the Federal Reserve and the European Central Bank—an artificial environment like that of a greenhouse—are among the main causes for the high equity market returns of the last few years.

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Viewpoint: Looking Modern and Sharpe

Posted by Bill Jarvis on Jul 7, 2014

Topic: Governance and Policy | Industry Knowledge | Risk Management

Every fiduciary knows that risk-taking is an unavoidable part of investing. But how can fiduciaries think usefully about risk in the context of their role as guardians of their institutions’ funds? This question is particularly urgent in the current financial and economic environment, which since early 2009 has been strongly influenced by the policies of the leading central banks, notably the Federal Reserve. The banks’ policies of keeping interest rates extremely low and providing liquidity to the market have supported a broad resurgence in public equity prices in the U.S. and Japan. Although the recovery has seen some pauses and retrenchments as each market has reacted in its own way to the central banks’ policies, the overall direction of prices has been strongly upward.

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Assessing Your Board’s Risk Tolerance

Posted by John Griswold, Bill Jarvis on Jun 2, 2014

Topic: Governance and Policy | Industry Knowledge | Investment Strategy | Risk Management

In the wake of the financial crisis, trustees of many endowed nonprofit institutions realized that their portfolio was riskier than they thought and their own ability to tolerate loss wasn’t as strong as they imagined. What can board and investment committee members do to improve their ability to assess their risk tolerance?

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Strive for the Best: Building and Maintaining an Excellent Board

Posted by John Griswold, Bill Jarvis on May 19, 2014

Topic: Governance and Policy

Excellent boards are made, not born. Achieving excellence in board governance requires success in four crucial areas: capable leadership; sound organizational structure; attention to fiduciary duties; and a culture that creates a cohesive board.

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Viewpoint: Looking Modern and Sharpe – Study of Endowments

Posted by Bill Jarvis on Jan 12, 2014

Topic: Governance and Policy | Industry Knowledge | Risk Management

Every fiduciary knows that risk-taking is an unavoidable part of investing. But how can fiduciaries think usefully about risk in the context of their role as guardians of their institutions’ funds? This question is particularly urgent in the current financial and economic environment, which since early 2009 has been strongly influenced by the policies of the leading central banks, notably the Federal Reserve. The banks’ policies of keeping interest rates extremely low and providing liquidity to the market have supported a broad resurgence in public equity prices in the U.S. and Japan. Although the recovery has seen some pauses and retrenchments as each market has reacted in its own way to the central banks’ policies, the overall direction of prices has been strongly upward.

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Outsourced Investment Management: An Overview

Posted by John Griswold, Bill Jarvis on Nov 19, 2013

Topic: Outsourced Investing

Once seen primarily as a solution for small institutions with limited resources, outsourcing of the investment management function is now widespread, with a broad range of long-term investors turning to the outsourced chief investment officer model. Properly implemented, outsourcing can help institutions with both large and small asset pools to address portfolio complexity and risk management challenges, benefit from more timely decision-making and contend with an increasingly rigorous regulatory environment, while enabling trustees to focus on improving institutional governance.

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10 Point Checklist to Get Governance Right

Posted by Tom Hyatt, Bill Jarvis on Oct 1, 2013

Topic: Governance and Policy | Industry Knowledge

While governance has many facets that can make it daunting to navigate, trustees may want to start with this 10-point checklist.

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From SRI to ESG: The Changing World of Responsible Investing

Posted by John Griswold, Bill Jarvis on Sep 19, 2013

Topic: Responsible Investing

Thoughtful investment professionals continue to debate whether a portfolio’s long-term performance can be enhanced by including environmental, social and governance (ESG) considerations in the security selection process, but responsible investing is more than a passing trend. Long-term fiduciaries should educate themselves on the fundamental arguments for and against ESG, and think critically about its meaning for the institutions they serve.

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10-Point Checklist: Get Governance Right

Posted by Tom Hyatt, Bill Jarvis on Aug 12, 2013

Topic: Governance and Policy

Follow this 10-point governance checklist to address the topics your board is accountable for....

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