A Closer Look at Religious Independent Schools

April 14, 2025 |
3 minute read
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The Study of Independent Schools - A Closer Look at Religious Schools
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Earlier this year, Commonfund Institute released the 20th annual Commonfund Benchmarks Study of Independent Schools (“CSIS” or the “Study”), reporting on key investment governance trends and insights over the July 1, 2023 – June 30, 2024 fiscal year (FY2024). The CSIS, produced in partnership with NBOA– Business Leadership for Independent Schools, since 2005, is a comprehensive annual survey of investment policies and governance practices of the independent schools’ sector.

Following the release of the FY2024 study, Commonfund did a deep dive into the 63 participating schools who indicated they have a religious affiliation. The results reflect a comparative analysis between those 63 schools and the 221 total respondents from the full CSIS report. Note: religious schools included in this analysis are those who self-reported they have a religious affiliation when completing the questionnaire for the Study.

THE TOP-LINE RESULTS

Performance

FY2024 one-year returns for participating schools were positive across all size cohorts in both the religious schools’ cohort and the 221 total CSIS respondent’s group. Religious schools reported a 13.1 percent one-year return vs. 12.3 percent for total respondents in FY2024. Looking at the three-, five-, and 10-year returns, both groups of respondents reported similar positive returns—3.7 percent for religious schools vs. 3.5 percent for all schools for the three-year, 7.8 percent vs. 7.7 percent, and 6.9 percent vs. 6.7 percent for the five- and 10-year periods, respectively. For the first time in the history of the CSIS we asked schools to report their 15- and 20-year returns. Religious schools outperformed total CSIS respondents over the 15-year period, reporting 8.3 percent vs. 8.0 percent for all schools on average but total CSIS respondents bested the return of religious schools for the 20-year period – 6.9 percent vs. 6.6 percent.

Asset Allocation

When compared to CSIS total respondents, religious schools reported a generous overweight to U.S. equities (42 percent vs. 35 percent) on average in FY2024. They also had higher weights compared to all other asset classes, except the alternative strategies bucket, where the total institutions group reported a 30 percent allocation vs. 20 percent on average. Schools with assets under $10 million reported the greatest allocation to U.S. equities (47 percent) and Fixed Income (30 percent). Religious schools with assets over $50 million reported the highest allocation to alternative strategies (28 percent) compared to average of the total religious schools group (20 percent).

Spending

Religious schools in the over $50 million cohort reported the highest stated policy spend rate across all size cohorts, at 4.6 percent, followed by religious schools under $10 million (4.3 percent) and those with assets between $10 and $50 million (4.2 percent). The religious schools group and total CSIS respondents both reported average stated policy spend rates of 4.3 percent.

Looking at spending methodology, the most commonly used method cited by schools in the FY2024 study is percentage of a moving average (65 percent total CSIS respondents vs. 64 percent of religious schools), the average percentage being 4.3 percent. Sixty-four percent of religious schools with assets between $10 and $50 million reported using a moving average methodology, as did 84 percent of religious schools over $50 million. Fifty percent of religious schools in the smallest cohort (those with under $10 million) reported using a spending methodology different form the overall average – citing “Other”, which some indicated as being a percentage of given market value, a percentage of a given number of trailing quarters, when the endowment value reaches a certain level, etc.

Gifts

After a marked increase in gifts to institutions in FY2022, average gifts to independent schools were down for FY2023 and fell FY2024.  Religious schools reported average new gifts to their endowment of $1.3 million vs. $1.5 million the previous year. The total CSIS respondents’ cohort reported an average of $1.6 million compared to $1.7 million in FY2023.  By size, religious schools with assets over $50 million, reported an average gift of $3.2 million, nearly five times the average new gift reported by religious schools with between $10 million - $50 million ($0.7 million) and more than ten times the average gift of religious schools with under $10 million ($0.3 million).

Operating Budget Support

In FY2024, religious schools reported that an average of 5.7 percent of their operating budget was funded from their endowment, compared with total CSIS respondents that reported an average of 6.7 percent. Compared to the operating budget support values reported in FY2023 (5.2 percent for religious schools and 6.4 for total respondents), reliance on the endowment is increasing. Religious schools over $50 million in assets reported that 12.2 percent of their operating budget is funded by their endowment on average, which is more than 3 times greater than the 3.8 percent average reported by religious schools in the under $10 million cohort and the 6.1 percent on average for religious schools in the $10 million-$50 million cohort.

While these top-line insights from the report are valuable data points, we encourage you to read the Study in its entirety and review all of the findings in detail to best evaluate your performance compared with your benchmark or peers. We hope this important research and future studies serve as a guidepost for your own analysis.

 

Allison Kaspriske

Author

Allison Kaspriske

Director

Disclaimer

Certain information contained herein has been obtained from or is based on third-party sources and, although believed to be reliable, has not been independently verified. Such information is as of the date indicated, if indicated, may not be complete, is subject to change and has not necessarily been updated. No representation or warranty, express or implied, is or will be given by The Common Fund for Nonprofit Organizations, any of its affiliates or any of its or their affiliates, trustees, directors, officers, employees or advisers (collectively referred to herein as “Commonfund”) or any other person as to the accuracy or completeness of the information in any third-party materials. Accordingly, Commonfund shall not be liable for any direct, indirect or consequential loss or damage suffered by any person as a result of relying on any statement in, or omission from, such third-party materials, and any such liability is expressly disclaimed.

All rights to the trademarks, copyrights, logos and other intellectual property listed herein belong to their respective owners and the use of such logos hereof does not imply an affiliation with, or endorsement by, the owners of such trademarks, copyrights, logos and other intellectual property.

To the extent views presented forecast market activity, they may be based on many factors in addition to those explicitly stated herein. Forecasts of experts inevitably differ. Views attributed to third-parties are presented to demonstrate the existence of points of view, not as a basis for recommendations or as investment advice. Market and investment views of third-parties presented herein do not necessarily reflect the views of Commonfund, any manager retained by Commonfund to manage any investments for Commonfund (each, a “Manager”) or any fund managed by any Commonfund entity (each, a “Fund”). Accordingly, the views presented herein may not be relied upon as an indication of trading intent on behalf of Commonfund, any Manager or any Fund.

Statements concerning Commonfund’s views of possible future outcomes in any investment asset class or market, or of possible future economic developments, are not intended, and should not be construed, as forecasts or predictions of the future investment performance of any Fund. Such statements are also not intended as recommendations by any Commonfund entity or any Commonfund employee to the recipient of the presentation. It is Commonfund’s policy that investment recommendations to its clients must be based on the investment objectives and risk tolerances of each individual client. All market outlook and similar statements are based upon information reasonably available as of the date of this presentation (unless an earlier date is stated with regard to particular information), and reasonably believed to be accurate by Commonfund. Commonfund disclaims any responsibility to provide the recipient of this presentation with updated or corrected information or statements. Past performance is not indicative of future results. For more information please refer to Important Disclosures.

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Disclaimer

Certain information contained herein has been obtained from or is based on third-party sources and, although believed to be reliable, has not been independently verified. Such information is as of the date indicated, if indicated, may not be complete, is subject to change and has not necessarily been updated. No representation or warranty, express or implied, is or will be given by The Common Fund for Nonprofit Organizations, any of its affiliates or any of its or their affiliates, trustees, directors, officers, employees or advisers (collectively referred to herein as “Commonfund”) or any other person as to the accuracy or completeness of the information in any third-party materials. Accordingly, Commonfund shall not be liable for any direct, indirect or consequential loss or damage suffered by any person as a result of relying on any statement in, or omission from, such third-party materials, and any such liability is expressly disclaimed.

All rights to the trademarks, copyrights, logos and other intellectual property listed herein belong to their respective owners and the use of such logos hereof does not imply an affiliation with, or endorsement by, the owners of such trademarks, copyrights, logos and other intellectual property.

To the extent views presented forecast market activity, they may be based on many factors in addition to those explicitly stated herein. Forecasts of experts inevitably differ. Views attributed to third-parties are presented to demonstrate the existence of points of view, not as a basis for recommendations or as investment advice. Market and investment views of third-parties presented herein do not necessarily reflect the views of Commonfund, any manager retained by Commonfund to manage any investments for Commonfund (each, a “Manager”) or any fund managed by any Commonfund entity (each, a “Fund”). Accordingly, the views presented herein may not be relied upon as an indication of trading intent on behalf of Commonfund, any Manager or any Fund.

Statements concerning Commonfund’s views of possible future outcomes in any investment asset class or market, or of possible future economic developments, are not intended, and should not be construed, as forecasts or predictions of the future investment performance of any Fund. Such statements are also not intended as recommendations by any Commonfund entity or any Commonfund employee to the recipient of the presentation. It is Commonfund’s policy that investment recommendations to its clients must be based on the investment objectives and risk tolerances of each individual client. All market outlook and similar statements are based upon information reasonably available as of the date of this presentation (unless an earlier date is stated with regard to particular information), and reasonably believed to be accurate by Commonfund. Commonfund disclaims any responsibility to provide the recipient of this presentation with updated or corrected information or statements. Past performance is not indicative of future results. For more information please refer to Important Disclosures.