Commonfund on the Road: Insights from our Portland Roundtable

October 13, 2023 |
2 minute read
|

For over 50 years, Commonfund has been working with boards and committee members on designing and implementing an investment structure that supports maintaining intergenerational equity or the purchasing power of their long-term pool. The Commonfund OCIO team recently hosted a roundtable luncheon in Portland, OR, for local nonprofit leaders.  We aimed to convene a forum to share information and research on best practices while facilitating a meaningful dialogue among participants.  

Attendees represented educational institutions and provided the platform for the discussion to focus on unique challenges this segment of the nonprofit sector is facing, as well as solution-based exchanges based on experience.  

We began the roundtable with the question “What is Your Return Target?” and discussed calculation elements that help determine the performance threshold an organization is seeking to achieve. This led to a meaningful dialogue about inflation—defined as rising costs paired with a reduction of purchasing power. Conventional thinking defaults to the Consumer Price Index (CPI), with the mention of inflation, but most costs that make up CPI are derived from housing and transportation and may not be as applicable to higher education.

Today, many educational institutions use the Higher Education Price Index (HEPI)—designed specifically for higher education and may be a more accurate indicator for colleges and universities than CPI. HEPI measures the average relative level in the prices of a fixed basket of goods and services purchased by colleges and universities each year, i.e. faculty and administrative salaries, supplies & materials, fringe benefits, utilities, etc., making it much more reflective of the cost increases impacting the dollars available at the institution.  

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Another key topic of discussion was Spending Policy, the different methodologies institutions employ and how they work with an inflation marker (CPI, HEPI, tuition costs, budgets, etc.) to provide a framework that reduces spending volatility and cuts down the propensity to overspend during flush market environments. In general, investment policy statements and operating policy statements tend to get more attention than the spending policy, but investment committees should be spending significant time considering the appropriate spending policy for their institution as well. More detail on these can be found in our recent whitepaper – Endowment Spending Policy: Often Overlooked but Critical to Long-Term Success.

This productive and interactive discussion reinforced the importance of engaging committees on these and other topics as they strive to increase the potential of preserving real purchasing power of their long-term portfolio.  

These concepts are covered in further detail in the video, Playing to Win.  

Commonfund OCIO is on the road meeting with institutions to discuss the topics above and more each year. Interested in being a part of the conversation? If you are interested in attending a regional roundtable in your area please complete the form with your details. A member of our team will reach out to  you with dates and locations of where we will be next.  

 

Michael Guido

Author

Michael Guido

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.