A Closer Look at Religious Independent K-12 Schools

April 25, 2024 |
2 minute read
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A Closer Look at Religious Schools from the Independent Schools Study
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Earlier this year, Commonfund Institute released the 2023 Commonfund Benchmarks Study® of Independent Schools (CSIS), reporting on key investment governance trends and insights over the July 1, 2022 – June 30, 2023 fiscal year (FY2023). 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 FY2023 study, Commonfund did a deep dive into the 59 participating schools who indicated they have a religious affiliation. The results reflect a comparative analysis between those 59 schools and the 210 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

FY2023 one-year returns for participating schools were positive across all size cohorts in both the religious schools’ cohort and the 210 total CSIS respondent’s group, which was a reversal of FY2022’s down year. Religious schools reported a 9.8 percent one-year return vs. 9.2 percent for total respondents in FY2023. Looking at the three- and five-year returns, both groups of respondents reported similar positive returns—7.0 percent for religious schools vs. 7.1 percent for all schools for the three-year, and 6.0 percent for both groups for the five-year. Ten-year returns were also positive across the board. Religious schools outperformed total CSIS respondents over the ten-year period, reporting 6.9 percent vs. 6.7 percent for all schools on average.

Asset Allocation

When compared to CSIS total respondents, the 59 religious schools’ cohort reported an overweight to U.S. equities (39 percent vs. 33 percent), fixed income (19 percent vs. 16 percent) and non-U.S. equities (19 percent vs 16 percent) but an underweight to alternatives (19 percent vs. 29 percent). Schools in the Under $10 million cohort reported the greatest allocation to those over-weighted asset classes—42 percent U.S. equities and 28 percent fixed income. Religious schools in the Over $50 million cohort reported a 22 percent allocation to alternative strategies vs. the 29 percent reported by total CSIS respondents.

Spending

Religious schools Under $10 million reported the highest stated policy spend rate across all size cohorts, at 4.7 percent, followed closely by religious schools Over $50 million at 4.6 percent. The 59 religious schools and total CSIS respondents reported 4.4 percent and 4.3 percent stated policy spend rates on average, respectively.

Gifts

After a marked increase in gifts to institutions in FY2022, average gifts to independent schools were down for FY2023.  Religious schools reported average new gifts to their endowment of $1.5 million, while the total CSIS respondent’s cohort reported an average of $1.7 million.  Interestingly the largest religious schools, those in the Over $50 million cohort, reported an average gift of $3.7 million, more than two times the average of both the total religious schools group and the 210 total CSIS respondents group.

Operating Budget Support

In FY2023, religious schools reported that an average of 5.2 percent of their operating budget was funded from their endowment, compared with total CSIS respondents that reported an average of 6.4 percent. Religious schools Over $50 million reported that 9.7 percent, on average, of their operating budget is funded by their endowment, which is six times the 1.6 percent average reported by religious schools in the Under $10 million cohort, and almost double the percentage of the total religious schools’ cohort (5.2 percent).

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

Fill in your details to download the custom report on religious independent schools. 

Request your copy of the CSIS for FY2023

Commonfund partners with NBOA to create the Commonfund Benchmarks Study® of Independent Schools (CSIS). The CSIS annual report studies, on average, over 200 independent boarding and day schools across North America.
Allison Kaspriske

Author

Allison Kaspriske

Director

Zoë Brizzolara

Author

Zoë Brizzolara

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.