Earlier this year, Commonfund, in partnership with the National Association of College and University Business Officers (NACUBO), released the 2025 NACUBO-Commonfund Study of Endowments (NCSE). The Study examines investment performance, governance and management practices at hundreds of U.S. higher education endowments and related foundations over the July 1, 2024 – June 30, 2025 fiscal year (FY25).
Following the release of the FY25 Study, Commonfund did a deep dive into results from the 169 institutions that reported having a religious affiliation, i.e. “religious schools” as a shorthand. Religiously affiliated colleges and universities range from schools where faith shapes every aspect of campus life and instruction, to those with a denominational identity that may influence mission and culture, or that maintain only a nominal tie to a founding denomination. Below is a comparative analysis of these institutions and the 657 total respondents from the full NCSE Study. Note: Additional types of schools surveyed in the Study are private colleges and universities, public colleges and universities, institutionally-related foundations (IRFs) and combined endowment/foundations. Detailed analysis of these is included in the full report.
Religious institutions accounted for $114.8 billion of the reported $944.3 billion in assets represented in the full FY25 Study, with an average endowment size of $679.4 million vs. $1.3 billion, respectively.
THE TOP-LINE RESULTS
Performance
Returns for all time horizons reported in the Study were positive across both groups for all institution sizes. The 169 religious schools participating in this year’s Study reported 10.5 percent average 1-yr. return vs. 10.9 percent for the total NCSE respondents’ cohort. Three-, five- and 10-year average returns for religious schools were reported as 9.7, 10.1 and 7.7 percent, respectively, vs. 10.0, 10.2 and 7.7 percent for total NCSE respondents over the same time periods. Longer-term returns were also similar between religious and total institutions: the former reporting 8.6 percent, 7.2 percent, and 6.5 percent for 15-, 20-, and 25- year returns, and the latter reporting 8.5 percent, 7.3 percent, and 6.6 percent for those time periods respectively, on average.
Asset Allocation
Religious schools participating in FY25 reported similar allocations to publicly traded equities when compared with total NCSE respondents (30.8 percent vs. 31.5 percent). Religious schools reported a notable underweight to alternative strategies, with a dollar-weighted average of 29.9 percent compared with 44.8 percent for total schools. There was a slight overweight to fixed income (12.9 percent vs. 10.7 percent for total schools) and a slight underweight to real assets (7.8 percent vs. 9.7 percent). Meanwhile the largest overweight compared to total schools was for the category of “other.” Note: Publicly traded equities includes U.S. equities, non-U.S. equities, emerging markets and global equities; Alternative Strategies includes private equity, private venture capital, marketable alternatives, secondaries and sustainable investments.
Spending
Religious schools reported an annual effective spending rate of 5.7 percent, which surpasses the 4.9 percent average for total NCSE respondents. Looking at spending policy, the most frequently reported spending methodology was a percentage of a moving average: 74.6 percent of religious schools reported using this method to determine their annual spending, essentially matching the 74.3 percent of total NCSE respondents that did. Meanwhile, 12.4 percent of religious schools and 12.1 percent of total schools reported using the hybrid (“Yale/Stanford rule”) method, and 9.5 percent and 10.8 percent indicated “Other” for their spending methodology, respectively.
Gifts
Total gifts to NCSE respondents in FY25 were $14.0 billion, falling from a total of $15.0 billion reported in FY24. Meanwhile total gifts to religious schools amounted to $1.8 billion in FY25. Average gifts for total schools also fell to $22.6 million in FY25 from $24.4 million in FY24, compared with $11.1 million in average gifts for participating religious schools. Further, as it typically is, the median gift size was below that of the average ($3.7 million for religious schools vs. $5.2 million for total NCSE respondents)—a sign that a few outlying institutions received exceptionally large gifts over the course of the fiscal year.
Operating Budget Support
A plurality of total respondents to the FY25 NCSE reported an increase in funding of the operating budget from the endowment – 42.8 percent – while 37.5 percent reported a decreased rate of operating budget support. Religious institutions reported that an average of 11.0 percent of operating budgets were funded from their endowments, comprising a wide range from 0.0 percent to 75.0 percent, compared with total NCSE respondents that reported an average of 15.2 percent. Median values were 6.6 percent vs. 6.1 percent for the religious cohort vs. total respondents.
Overall, these findings suggest that religious schools are managing comparatively small endowments through disciplined investment practices, though their higher spending rates merit consideration. A 5.7 percent annual spending rate is notably elevated and may reflect a combination of strong investment returns and growing operational needs. While their overweight to fixed income provides some stability it may limit growth potential, which could present challenges for sustaining this level of spending over time. Their underweight to alternative strategies suggests a more conservative positioning that prioritizes near-term predictability, though this approach may warrant review as institutions balance longer-term endowment sustainability alongside current institutional needs.
We hope these top-line insights will serve as a guidepost for your own analysis into these important topics and we encourage you to read the Study in its entirety to best evaluate your performance vs. your benchmark or peers.
