Governance and Policy

2017 CCSF Study Results Released

Posted by Commonfund Institute on Aug 9, 2018

Topic: Asset Allocation | Governance and Policy | Industry Knowledge

Data gathered in the 2017 Council on Foundations–Commonfund Study of Investment of Endowments for Private and Community Foundations® (CCSF) show that participating private and community foundations realized significantly higher investment returns for the 2017 fiscal year (January 1 – December 31, 2017) than they did in FY2016. Participating private foundations reported an average FY2017 return of 15.0 percent compared with 6.4 percent in FY2016. Participating community foundations reported an average return of 15.1 percent for FY2017, up from 7.3 percent in FY2016.

Read now

The Four P’s of Investment Decisions:
Lessons from the Commonfund Institute

Posted by Cathleen M. Rittereiser on Jul 12, 2018

Topic: Governance and Policy | Industry Knowledge | Investment Strategy

Three days after becoming Executive Director of the Commonfund Institute, I found myself giving welcoming remarks at our annual program. The agenda focused on the key responsibilities and decisions fiduciaries make, starting with policy decisions and leading into execution. The most important lessons I learned ...

Read now

Inaugural Corporate Responsibility Report and 2018 Mid-Year Letter

Posted by Mark J.P. Anson, Commonfund on Jul 12, 2018

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

We are pleased to share with you our inaugural Corporate Responsibility Report. Since our founding in 1971, Commonfund has pursued a singular mission – to enhance the financial resources of our clients by delivering exceptional performance, service and insight. Beyond our focus on investment excellence . . .

Read now

2017 NCSE Key Findings [Infographic]

Posted by Commonfund Institute on Mar 6, 2018

Topic: Asset Allocation | Governance and Policy | Industry Knowledge

For the fiscal year ended June 30, 2017, educational endowments reported a 12.2 percent return as the 10-Year return fell to 4.6 percent. In this infographic, we report the top findings from the 2017 NACUBO-Commonfund Study of Endowments. This annual report studies, on average, over 800 educational institutions that include U.S. educational institutions, private colleges and university endowments, public educational endowments, institution-related foundations (IRFs) and combined public endowment/foundations.

Read now

Viewpoint:
Being Objective

Posted by Commonfund Institute on Feb 22, 2018

Topic: Governance and Policy | Industry Knowledge

Every year, the NACUBO-Commonfund Study of Endowments® (NCSE) reports new data—on investment returns, asset allocation, risk management, donations and gifts, and much more. But some data points are relatively static. In this Viewpoint we will dive deeper into long-term return objectives and the investment policies that support the objectives of the endowment.

Read now

Despite Strong FY2017, Endowments Report Decline in Ten-Year Return

Posted by Commonfund Institute on Jan 25, 2018

Topic: Asset Allocation | Governance and Policy | Industry Knowledge

Data gathered from 809 U.S. colleges and universities for the 2017 NACUBO-Commonfund Study of Endowments® (NCSE) show that participating institutions’ endowments returned an average of 12.2 percent (net of fees) for the 2017 fiscal year (July 1, 2016 – June 30, 2017) compared with -1.9 percent for the 2016 fiscal year and 2.4 percent for fiscal 2015. Despite this year’s improved return, the mission-critical 10-year average annual return fell to 4.6 percent from last year’s 5.0 percent, as FY2007’s strong 17.2 percent return dropped out of the trailing 10-year average.

Read now

2017 NACUBO-Commonfund Study of Endowments Results Released

Posted by Commonfund Institute on Jan 25, 2018

Topic: Asset Allocation | Governance and Policy | Industry Knowledge

Data gathered from 809 U.S. colleges and universities for the 2017 NACUBO-Commonfund Study of Endowments® (NCSE) show that participating institutions’ endowments returned an average of 12.2 percent (net of fees) for the 2017 fiscal year (July 1, 2016 – June 30, 2017) compared with -1.9 percent for the 2016 fiscal year and 2.4 percent for fiscal 2015. Despite this year’s improved return, the mission-critical 10-year average annual return fell to 4.6 percent from last year’s 5.0 percent, as FY2007’s strong 17.2 percent return dropped out of the trailing 10-year average.

Read now

When Leaks Turn into Floods:
Challenges Facing Higher Education

Posted by Timothy T. Yates, Jr. on Jan 19, 2018

Topic: Governance and Policy | Industry Knowledge | Investment Strategy | Operating Assets | Outsourced Investing | Risk Management

2017’s tax legislation is the latest in a growing list of challenges facing higher education. The new excise taxes on endowment earnings of the largest private universities, coupled with...

Read now

Governance Best Practices: How Does Your Board Measure Up?

Posted by Commonfund Institute on Jan 11, 2018

Topic: Governance and Policy | Industry Knowledge

Since our founding in 1971, a core element of the Commonfund mission has been to provide insights on a broad range of governance, policy and investment challenges. An engaged governing board is important in all environments – but perhaps no more so than today. Markets are at new highs, yet there remains much uncertainty – from the inevitable market correction to disruption of many nonprofit operating models to the impact of recently enacted tax law changes. As we start 2018, Commonfund Institute convened a panel of thought leaders to discuss current practices in nonprofit governance and offer ways for boards to bring best practices to their processes and deliberations. The discussion was moderated by John S. Griswold, Founding Director of the Institute. The three panelists were: Thomas K. Hyatt, partner in the Washington office of Dentons US LLPand co-chair of the firm’s U.S. Nonprofit Entities Practice. He is a Senior Fellow for Public Policy at the Association of Governing Boards of Universities and Colleges (AGB) and was recognized as Outstanding Nonprofit Lawyer of the Year for 2017 by the American Bar Association. Robert B. Litterman, PhD., Chair of the Risk Committee and a founding partner of Kepos Capital, a New York City-based systematic global macro investment firm. In a 23-year career with Goldman Sachs he headed the firm’s risk management function and co-developed the Black-Litterman Global Asset Allocation Model, a mathematical model for portfolio allocation. He is Chair of the Board of Trustees of Commonfund, and serves on other boards, including the World Wildlife Fund and the Robert Wood Johnson Foundation. David Nygren, PhD., founder of Nygren Consulting and previously founding Senior Partner of the Corporate Governance Consulting Group at Mercer Delta Consulting. Formerly, he was Executive Vice President of DePaul University and has held teaching and research appointments at Harvard, Yale and Boston University. He has served on or chaired the boards of numerous organizations in education, health care and the arts.

Read now

Tax Reform:
CPI Plus More

Posted by Sharad Samy, Keith Luke, Catherine Keating on Dec 19, 2017

Topic: Governance and Policy | Industry Knowledge

It was another taxing weekend (literally) at Commonfund as we digested 1,097 pages of the conference agreement for the tax reform bill (the Tax Act) and its implications for our country and for the nonprofit and public sector investors we serve. We focused on the Tax Act’s provisions, but also its wider goal of stimulating economic growth. We also attempted to discern the implicit preferences and philosophy of this first piece of major legislation from our nation’s 115th Congress, which is expected to be passed later this week, and its implications for public policy in the years ahead.

Read now

Year-End Update and 2018 Outlook | Rational Resiliency

Posted by Catherine Keating on Dec 14, 2017

Topic: Asset Allocation | Equities | Fixed Income | Governance and Policy | Industry Knowledge | Investment Strategy

As we come to the end of 2017 and look forward to 2018, we are approaching the tenth year of the post-crisis recovery. With synchronized global growth for the first time in a decade, equity markets near all-time highs, and a year of strong double-digit portfolio returns, investors should be feeling exuberant. And yet we find the exuberance of most institutions with whom we work tempered by concerns about the future.

Read now

2017 HEPI: Highest Increase Since 2008

Posted by Commonfund on Dec 12, 2017

Topic: Governance and Policy | Industry Knowledge | Operating Assets

This week Commonfund released the 2017 update to the Higher Education Price Index® (HEPI). It includes three important changes that investors should take note of: (1) the 2017 HEPI inflation rate was 3.7 percent - the highest increase since 2008, (2) seven of the eight HEPI components showed positive increases, with just Supplies and Materials registering a slight decrease of 0.5 percent as compared to the prior year and (3) fringe Benefits increased 5.9 percent, the most since before the Great Financial Crisis.

Read now

The Tax Man Cometh (And Not Just for the Ivies)

Posted by Sharad Samy, Keith Luke, Catherine Keating on Dec 4, 2017

Topic: Governance and Policy | Industry Knowledge

As we approach the end of calendar year 2017, the passage of significant tax reform legislation – while far from certain – seems increasingly more likely. The Senate and the House versions, which vary in some substantive ways, must be reconciled before the President can sign a bill into law. What is certain is that if passed, the tax bill will have a broad impact for most filers – corporations, individuals and tax-exempt institutions, including colleges and universities, private foundations and public charities.

Read now

Spending Policy: Is Yours Ready for the Next Downturn?

Posted by Timothy T. Yates, Jr. on Nov 7, 2017

Topic: Governance and Policy | Investment Strategy | Operating Assets | Outsourced Investing

In most Investment Policy Statements there is often a reference to two important, but conflicting, objectives: one, to preserve the purchasing power of the long-term portfolio in real terms, and two, to provide a stable. predictable and hopefully growing source of income to the institution that the long-term portfolio supports. Why the conflict? Because in order to generate returns that will sustain real purchasing power in perpetuity, the portfolio must be exposed to risk which often means volatility and thus potential instability or unpredictability in the income stream...

Read now

Top Ten Insights for Foundation Investors in a Mature Market

Posted by Catherine Keating on Oct 17, 2017

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

Last week I had the honor of moderating a panel at the 2017 Council on Foundations Endowments & Finance Summit. In the session, “Foundation Investing in Mature Markets: Challenges and Rewards,” I was joined by three esteemed colleagues, representing foundations with over $3 billion in endowed assets and close to three centuries of combined history. My colleagues: Mary Greenebaum, CIO, New York Community Trust; Sherry P. Magill, PhD., President of the Jessie Ball duPont Fund; and Jeremy Tennenbaum, CFA, Chief Financial Officer of the Altman Foundation. Each of these institutions is a pillar of its community, supporting programs that enrich quality of life and . . .

Read now

On Complacency | Why Risk Management Always Matters

Posted by Dana Moreau, Brian Rondeau on Sep 14, 2017

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

Like nearly everything in the financial markets, risk is cyclical. History repeats itself. The echoes of past crises are always heard in present ones, yet new crises are rarely predicted and not always properly planned for. We are in the midst of one of the longest economic expansions in U.S. history, 98 months and counting, trailing only the 120 month and 106 month expansions of the 1990s and 1960s, respectively. There have been bumps along the way, but this has been an extended benign period for risk in the capital markets.

Read now

Never Enough: Challenges Facing Private Colleges

Posted by Commonfund Institute on Sep 14, 2017

Topic: Governance and Policy | Industry Knowledge | Operating Assets

The traditional small, private, liberal arts college model of higher education has been under stress for some time. Viewed as economic entities, these institutions — like their larger peers, the research universities — rely on three main sources of income: tuition, fees and grants, and distributions from their endowments. Unlike research universities, however, small liberal arts colleges are facing a unique combination of headwinds that deeply challenge their operational model and may, in many cases, pose threats to their continued existence. In this article, we describe those challenges and outline some steps that governing boards and administrations may have to take in order to ensure the survival of their institutions.

Read now

2016 CCSF Key Findings [Infographic]

Posted by Commonfund Institute on Aug 14, 2017

Topic: Asset Allocation | Governance and Policy | Industry Knowledge

For the fiscal year ended December 30, 2016, participating private foundations reported an average return of 6.4 percent while participating community foundations reported an average return of 7.3 percent for the same period. In this infographic, we report the top findings from the 2016 Council on Foundations-Commonfund Study of Foundations. This annual report studies, on average, over 200 private and community foundations that represent over $100 billion in assets.

Read now

Viewpoint: Increased Responsibility

Posted by Commonfund Institute on Aug 8, 2017

Topic: Governance and Policy | Industry Knowledge | Responsible Investing

In recent years, growing attention has been paid to the use by endowed institutions of so-called responsible investing practices. The three main practices — environmental, social and governance (ESG) investing; socially responsible investing (SRI); and impact investing (also known as mission-related investing or MRI) — are defined in this article.

Read now

2016 CCSF Study Results Released

Posted by Commonfund Institute on Jul 14, 2017

Topic: Asset Allocation | Governance and Policy | Industry Knowledge

Data gathered in the 2016 Council on Foundations–Commonfund Study of Investment of Endowments for Private and Community Foundations® (CCSF) show that participating private foundations reported an average return of 6.4 percent for the 2016 fiscal year (January 1 – December 31, 2016) while participating community foundations reported an average return of 7.3 percent for the same period.

Read now

Commonfund Among Top 5 Most Trusted Institutional Asset Managers

Posted by Commonfund on Jun 9, 2017

Topic: Governance and Policy | Industry Knowledge | Responsible Investing

Commonfund, a prominent asset manager for endowments, foundations and public pension investors, announced today that the firm has been ranked among the top 5 most trusted institutional asset managers for nonprofits according to findings from the 2017 US Institutional Investor Brandscape®, a Cogent Reports™ study released by Market Strategies International.

Read now

Implications of New York’s Excelsior Scholarship Program

Posted by Commonfund Institute on Jun 6, 2017

Topic: Governance and Policy | Industry Knowledge | Investment Strategy

While opening opportunity to many New York families, the recently enacted Excelsior Scholarship Program will likely stress the financial resources of small private colleges and universities in New York State, particularly those with a high percentage of state resident students, modest endowments and high tuition discount rates. With revenues from tuitions facing pressure, the importance of endowment in support of operating budgets and scholarships will increase.

Read now

Catherine Keating Delivers UVA Law’s 2017 Commencement Address

Posted by Commonfund on May 22, 2017

Topic: Governance and Policy | Industry Knowledge | Investment Strategy | People

Catherine Keating Delivered UVA Law’s 2017 Commencement Address on Sunday, May 21, 2017.

Read now

2016 NCSE Key Findings [Infographic]

Posted by Commonfund Institute on Apr 20, 2017

Topic: Asset Allocation | Governance and Policy | Industry Knowledge

For the fiscal year ended June 30, 2016, educational endowments reported a -1.9 percent return as the 10-Year return fell to 5.0 percent. In this infographic, we report the top findings from the 2016 NACUBO-Commonfund Study of Endowments. This annual report studies, on average, over 800 educational institutions that include U.S. educational institutions, private colleges and university endowments, public educational endowments, institution-related foundations (IRFs) and combined public endowment/foundations.

Read now

Ten Ways to Get Investigated

Posted by Commonfund on Apr 17, 2017

Topic: Governance and Policy

Recently published BoardSource article outlines ten ways to get investigated by a state regulator. When joining the board of a nonprofit organization, you take on a set of responsibilities and duties defined by law. In addition to being attentive to programs, finances, and fundraising, nonprofit board members must understand the regulatory environment in which their organizations operate.

Read now

Commonfund Returns
to New York City

Posted by Commonfund on Apr 4, 2017

Topic: Governance and Policy | Industry Knowledge | Investment Strategy

Commonfund, a prominent investment manager for endowments, foundations and public pension investors, announced today it has returned to New York City with the opening of a new office at 280 Park Avenue. The firm’s New York office will enhance access to clients and investment managers, as well as expand the firm’s footprint in the region. In addition to New York, Commonfund has offices in Connecticut, San Francisco, London, and Beijing.

Read now

Viewpoint:
Counting the Cost

Posted by Commonfund Institute on Mar 30, 2017

Topic: Governance and Policy | Industry Knowledge

How much does investment management cost? Fiduciaries, donors and stakeholders at endowed institutions have a strong interest in finding a good answer to this question, particularly in this era of low returns when costs may occupy a comparatively large proportion of the total return percentage. But achieving that goal is harder than it seems. In our white paper of 2015, “Understanding the Cost of Investment Management,” we outlined the types of cost that institutions pay— including those that are not specifically invoiced, and of which many fiduciaries may be unaware. This year, we enlisted the aid of institutions participating in the NCSE to dig more deeply into one of the main factors that influence investment cost: the investment vehicles employed in managing the portfolio.

Read now

Five Takeaways from Treasury Symposium 2017

Posted by Jon Speare on Feb 23, 2017

Topic: Asset Allocation | Governance and Policy | Industry Knowledge | Operating Assets

Treasury Symposium 2017 was held in New Orleans earlier this month. 285 senior financial officers from over 100 large universities participated in the strategic discussions. Once again, the takeaways from the three-day Symposium were thought-provoking as well as cautionary for the higher education industry.

Read now

2016 NACUBO-Commonfund Study of Endowments Results Released

Posted by Commonfund Institute on Jan 31, 2017

Topic: Asset Allocation | Governance and Policy | Industry Knowledge

Data gathered from 805 U.S. colleges and universities for the 2016 NACUBO-Commonfund Study of Endowments® (NCSE) show that participating institutions’ endowments returned an average of -1.9 percent (net of fees) for the 2016 fiscal year (July 1, 2015 – June 30, 2016). This year’s negative return, following the low 2.4 percent return reported for FY2015, contributed to a decline in long-term 10-year average annual returns to 5.0 percent from last year’s 6.3 percent.

Read now

Does Your Investment Policy Statement Account for Risk?

Posted by Commonfund Institute 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.

Read now

Healthcare Endowment Management: 3 Questions to Consider

Posted by Commonfund Institute 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.

Read now

Assessing the State of Healthcare

Posted by Commonfund Institute 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.

Read now

Taking Away the Punch Bowl

Posted by Ryan Driscoll, Michael Strauss on Dec 19, 2016

Topic: Governance and Policy | Investment Strategy | Market Commentary

A combination of better economic growth, including stronger labor conditions and signs of a bottoming in inflation, provided the Fed with an opportunity to restart the normalization process by raising short rates 25 basis points at the mid-December FOMC meeting in what “Fed-watchers” from decades ago might term “taking away the punchbowl just when the party is warming up”. . .

Read now

Drafting Your Investment Policy Statement: 10 Critical Issues

Posted by Commonfund Institute 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...

Read now

The Investment Policy Statement

Posted by Commonfund Institute, John Griswold 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.

Read now

Commonfund Election Update: Missions and Markets

Posted by Catherine Keating on Nov 11, 2016

Topic: Governance and Policy | Investment Strategy | Market Commentary

Commonfund is a firm that marries mission and markets in a unique way. And so today we assess the implications of last night's Presidential election on our clients' nonprofit missions as well as on the markets that we invest in together. There were many headlines about markets today, but few about mission. Yet we think that this is an important moment for mission-based organizations.

Read now

2015 CSHO Study of Healthcare Organizations Released

Posted by Commonfund Institute on Nov 1, 2016

Topic: Asset Allocation | Governance and Policy | Industry Knowledge

Data gathered in the 2014-2015 Commonfund Benchmarks Study of Healthcare Organizations (CSHO) reveals investment challenges facing hospitals. Participants report 4.4 percent return for FY 2014 but -1.6 percent for FY2015.

Read now

2016 HEPI Report Released

Posted by Commonfund Institute on Oct 31, 2016

Topic: Governance and Policy | Industry Knowledge | Operating Assets

The annual Commonfund Higher Education Price Index (HEPI) report provides an analysis of HEPI and the cost factors associated with the index. Download your copy today to determine increases in funding necessary to maintain both real purchasing power and investment at your institution.

Read now

How Does Board Structure Affect Performance

Posted by Commonfund Institute 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.

Read now

Fiduciary Responsibility:
A Board’s Purpose and Role

Posted by Commonfund Institute 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.

Read now

Where Did Our Operating Income Go?

Posted by Ryan Driscoll, Jon Speare, Michael Strauss on Sep 15, 2016

Topic: Fixed Income | Governance and Policy | Industry Knowledge | Operating Assets

Treasury managers face a new challenge to an old problem. Their institutions historically have relied on operating income to provide a necessary influx to operating budgets. Prior to 2008, risk free or minimal risk investments provided support for operations with returns that are currently unimaginable. The concept of a risk-free instrument yielding anything significantly above 0% in the future does not take into account the post crisis world of capital markets, specifically cash markets. So, the world of five percent cash returns is gone, and has little chance of re-emerging. This leaves a shortfall in how treasury managers balance budgets and fund capital initiatives going forward.

Read now

Viewpoint: A Firmer Foundation

Posted by Commonfund Institute on Sep 2, 2016

Topic: Governance and Policy | Industry Knowledge | Responsible Investing

How long is the long term? A year ago, private and community foundations appeared to many observers to have recovered from the losses suffered in the 2008–09 global financial crisis. Double-digit investment returns had been reported in every year except FY2011 and FY2014, donations to community foundations had returned to their pre-crisis levels and the investment strategies of successful foundations were once again followed closely in the financial press.

Read now

2015 CCSF Study of Foundations Released

Posted by Commonfund Institute on Aug 23, 2016

Topic: Asset Allocation | Governance and Policy | Industry Knowledge

Data gathered in the 2015 Council on Foundations - Commonfund Study of Investment of Endowments for Private and Community Foundations (CCSF) shows Foundations' spending in support of mission holds steady, despite second year of declining investment returns.

Read now

The Billion Dollar Dilemma

Posted by Commonfund on Aug 12, 2016

Topic: Governance and Policy | Industry Knowledge | Outsourced Investing

Finding the right investment governance model for your institution isn’t about size. In the hyper-competitive world of endowment management, something curious happens when the word used to describe the size of an endowment changes from starting with the letter “m” to a word that starts with the letter “b.” Yes, Billion. With a “B.”

Read now

Five Laws that Led to Uniformity in Nonprofit Governance

Posted by Commonfund Institute 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 ...

Read now

Responsible Investing Study of Foundations Released

Posted by Commonfund Institute on Jul 14, 2016

Topic: Governance and Policy | Investment Strategy | Responsible Investing

The Council on Foundations-Commonfund Study of Responsible Investing was issued jointly today by the two representative organizations. The study, believed to be the most comprehensive and detailed to date on the topic among private and public foundations, analyzed the policies, practices and attitudes with respect to responsible investing among 186 U.S. private and public/community foundations representing a total of $39.7 billion in endowment assets as of December 31, 2014.

Read now

A Framework for Nonprofit Governance

Posted by Commonfund Institute 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...

Read now

Integration of ESG Factors in Practical Steps

Posted by Commonfund Institute 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...

Read now

Commonfund Roundup
06-29-16

Posted by Commonfund on Jun 29, 2016

Topic: Asset Allocation | Governance and Policy | Industry Knowledge | Investment Strategy | Market Commentary | Responsible Investing | Risk Management

In this month’s Commonfund Roundup, active management and risk are leading topics. Featured articles include: an interview in Institutional Investor with CEO, Catherine Keating, where she discusses the active-versus-passive debate and more; and “Active Management Fatigue and What to Do About it,” co-authored by Kristofer Kwait, Head of Investments; Jess Gaspar, Head of Asset Allocation and Research; and John Delano, Head of Analytics. Also included, the new white paper, "Striking the Balance: A Fiduciary Approach to Risk and the Investment Policy"; the latest weekly economic podcasts and more.

Read now

Bridging the Gap: Carbon and Fiduciary Responsibility

Posted by Commonfund on Jun 20, 2016

Topic: Asset Allocation | Governance and Policy | Responsible Investing

Most institutional investor discussions and actions regarding global warming have been at two ends of the spectrum: either divest from fossil fuels entirely or remain fully invested. A better approach would be to change the conversation from a tug of war over a binary decision, between investment considerations and environmental appeals, to a more balanced discussion centered on common objectives.

Read now

Investment Management
Principle 7: Fiduciary Responsibilities

Posted by Commonfund Institute on Jun 16, 2016

Topic: Governance and Policy | Industry Knowledge

In this final installation of Commonfund's 7-part series of Principles of Investment Management, we will review Principle #7: Fiduciary Responsibilities. The responsibilities of those charged with oversight of a long-term investment fund such as an educational, religious or charitable endowment, foundation, hospital asset pool or pension fund differ fundamentally from those of other investment fiduciaries. It's essential to define the roles of trustees, investment officers...

Read now

Top Ten Risks for Practicing CIOs

Posted by Bruce Zimmerman on Jun 8, 2016

Topic: Governance and Policy | Risk Management

A Chief Investment Officer’s primary responsibility is to identify and clearly communicate his/her portfolio’s risks to his/her Board, Investment Committee and/or client(s). About eighteen months ago, the University of Texas Investment Management Company (UTIMCO) developed a ten item framework to help with this responsibility. Read more from CEO and CIO of UTIMCO, Bruce Zimmerman.

Read now

Common Concerns about Responsible Investing

Posted by Commonfund Institute 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...

Read now

Operating Charity Implements Risk-Based Investment Policy

Posted by Commonfund Institute 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"...

Read now

Striking the Balance: A Fiduciary Approach to Risk and Investment Policy

Posted by Commonfund Institute on May 31, 2016

Topic: Asset Allocation | Governance and Policy | Investment Strategy | Risk Management

In formulating an investment policy, fiduciaries frequently treat risk as an output of portfolio construction and asset allocation processes, giving priority to return objectives. Fiduciaries would do better to acknowledge risk as a primary input which guides and constrains those charged with institutional governance and investment policy formulation. Download this paper to help determine practical methods to assign risk when formulating an investment policy for your institution.

Read now

Commonfund Roundup
05-31-16

Posted by Commonfund on May 31, 2016

Topic: Asset Allocation | Governance and Policy | Industry Knowledge | Risk Management

This month's Commonfund Roundup features a webcast of Catherine Keating on the panel, "Thematic Investing and Portfolio Strategies: Betting on the Megatrends", at Milken Institute's Global Conference; Mark Anson and Ryan Driscoll's article, "Unhedged Commentary: The $3 Trillion Question," published in Institutional Investor’s Alpha; Commonfund Forum Spotlights, "The Big Picture: Integrating Investments, Finance and Development" and "Ideas for Next Gen Energy Investing"; along with the latest economic pod casts and more.

Read now

Investment Management
Principle 6: Cost Management

Posted by Commonfund Institute on May 24, 2016

Topic: Governance and Policy | Industry Knowledge

In this installation of Commonfund's 7-part series of Principles of Investment Management, we will review Principle #6: Cost Management. The costs of your investment program can quietly undercut returns; make sure you keep those costs reasonable in relation to the returns you expect to receive. The investment management function requires a deliberate commitment to cost management. Cost control essentially involves three types of activity...

Read now

Deciding on an OCIO Provider: Three Factors to Consider

Posted by Commonfund Institute 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.

Read now

Investment Management
Principle 5: Risk Management

Posted by Commonfund Institute on May 3, 2016

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

In this installation of Commonfund's 7-part series of Principles of Investment Management, we will review Principle #5: Risk Management. Risk can be defined broadly as anything that can result in the objectives of the portfolio not being met. The process of risk management seeks to enable fiduciaries to make the best possible investment decisions in the face of uncertainty and to maximize the likelihood that your portfolio objectives will be achieved.

Read now

The Big Picture: Integrating Investments, Finance and Development

Posted by Commonfund on May 3, 2016

Topic: Governance and Policy | Industry Knowledge | Investment Strategy

Most things function a lot better when all the moving parts work together—nonprofit institutions included. The synergies afforded by collaboration across organizational boundaries may be the most underutilized way to leverage your organization’s resources.

Read now

Commonfund Roundup
05-02-16

Posted by Commonfund on May 2, 2016

Topic: Asset Allocation | Governance and Policy | Industry Knowledge | Risk Management

This month's Commonfund Roundup features our latest Partner Page for OHSU Foundation; Commonfund Forum Spotlight, Emerging Markets: Balancing Risk and Reward; Mark Anson's latest article, "Asset Allocation with Private Equity," published in the Journal of Investment Consulting; along with the latest economic pod casts and more.

Read now

Investment Management
Principle 4: Manager Selection

Posted by Commonfund Institute on Apr 22, 2016

Topic: Governance and Policy | Industry Knowledge | Investment Strategy

In this installation of Commonfund's 7-part series of Principles of Investment Management, we will review Principle #4: Manager Selection. In the past trustees did the investing themselves or assigned the task to one or two all-purpose managers. During the last three decades, that model has been superseded by one in which fiduciaries delegate management of the portfolio to a variety of specialized investment managers, seeking those with a demonstrated record of exceeding their benchmarks.

Read now

What is Outsourced Investment Management?

Posted by Commonfund Institute 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.

Read now

Investment Management
Principle 3: Asset Allocation

Posted by Commonfund Institute on Apr 7, 2016

Topic: Asset Allocation | Governance and Policy | Industry Knowledge | Investment Strategy

In this installation of Commonfund's 7-part series of Principles of Investment Management, we will review Principle #3: Asset Allocation. Arguably one of the most important investment-related decisions, asset allocation will largely determine the level of risk-adjusted return you are seeking. A key responsibility of the governing board, your strategic asset allocation policy will set the course for investing the fund for many years to come. But determining an optimal asset allocation for your institution’s portfolio involves more than numbers.

Read now

Is Currency an Asset Class?

Posted by Mark J.P. Anson on Mar 29, 2016

Topic: Governance and Policy | Investment Strategy | Risk Management

Currency risk can best be described as the surprise impact that currency exposure has on an investment portfolio. Although currency risk typically confounds investors, it is easy to measure – it is the difference in the return to an unhedged portfolio position versus that portfolio position hedged back to the investor’s domestic currency. So simple to measure, yet so difficult to figure out.

Read now

Commonfund Roundup
03-29-16

Posted by Commonfund on Mar 29, 2016

Topic: Asset Allocation | Governance and Policy | Industry Knowledge | Risk Management

This month's Commonfund Roundup includes the results of the Commonfund Investor Outlook Survey™, Commonfund Forum Spotlights, Sal Khan, Education Reimagined webcast, along with the article, Rethinking Risk and Diversification; the latest economic pod cast and more.

Read now

Investment Management
Principle 2: Payout Policy

Posted by Commonfund Institute on Mar 17, 2016

Topic: Governance and Policy | Industry Knowledge | Investment Strategy

In this installation of Commonfund's 7-part series of Principles of Investment Management, we will review Principle #2: Payout Policy. Determining how much of the fund can be transferred each year to the operating budget or to designated beneficiaries while still maintaining the fund's ability to support its mission in the future.

Read now

Investment Management
Principle 1: Objectives

Posted by Commonfund Institute on Mar 11, 2016

Topic: Governance and Policy | Industry Knowledge | Investment Strategy

The responsibilities of those charged with oversight of a long-term investment fund such as an educational, religious or charitable endowment, foundation, hospital asset pool or pension fund differ fundamentally from those of other investment fiduciaries. The differences arise primarily from the nature of these funds’ beneficiaries. In this 7-part series, we’re going to discuss key issues and essential principles of investment management. We’ll start with Principle #1: Objectives.

Read now

Survey Shows Uncertainty Among Institutional Investors

Posted by Commonfund on Mar 1, 2016

Topic: Governance and Policy | Industry Knowledge

The results of our sixth annual Commonfund Investor Outlook Survey™ shows that institutional investor expectations have shifted from cautious optimism a year ago, to negativity for 2016.

Read now

Sample Investment Policy Statement Responsible Investing Rider

Posted by Commonfund on Feb 19, 2016

Topic: Governance and Policy | Industry Knowledge | Responsible Investing

Download the sample investment policy statement rider on responsible investing strategies.

Read now

Six Key Questions To Ask OCIO Providers

Posted by Commonfund on Feb 4, 2016

Topic: Governance and Policy | Industry Knowledge | Outsourced Investing

Today, few OCIOs that serve nonprofits are total institutional partners. Value-added OCIO providers must no longer view an institution through a purely investment-related, or even finance-related, keyhole. Many institutions require a broader and deeper approach—one that addresses wide-ranging institutional factors that extend well beyond investment management. Here are six key questions that can help you find a provider who takes a holistic approach.

Read now

Top 5 Questions of Nonprofit Fiduciaries

Posted by Steve Snyder on Jan 27, 2016

Topic: Governance and Policy | Industry Knowledge | Market Commentary

Investment committees and staff often question what’s next for the markets and what they should do about it. In this article we address top five concerns and questions we have heard followed by our guidance for nonprofit fiduciaries.

Read now

New Environmental Regulations and the Impact on Fiduciaries

Posted by Commonfund Institute 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.

Read now

How to Calculate Investment Management Costs

Posted by Commonfund Institute 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.

Read now

HEPI

Posted by Commonfund on Dec 4, 2015

Topic: Governance and Policy | Industry Knowledge

The annual Commonfund Higher Education Price Index (HEPI) report provides an analysis of HEPI and the cost factors...

Read now

Download Commonfund’s Sample Operating Asset Policy and Guidelines

Posted by Commonfund on Oct 22, 2015

Topic: Governance and Policy | Operating Assets

Commonfund has developed a sample Operating Asset Investment Policy based on best practices in cash investment management. Download your copy today.

Read now

Understanding the Cost of Investment Management

Posted by Commonfund Institute 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.

Read now

Participate in the next Healthcare Study

Posted by Commonfund Institute on Aug 28, 2015

Topic: Governance and Policy | Industry Knowledge

Become a participant in the next Healthcare Organizations Report. The Commonfund Benchmarks Study® – Healthcare Organizations Report provides an analysis of the investment and governance policies and practices of nonprofit healthcare organizations across the U.S. Let your voice be heard on a range a topics important to healthcare organizations.

Read now

Be Heard: Participate in the next Study of Private and Community Foundations

Posted by Commonfund Institute on Aug 21, 2015

Topic: Governance and Policy | Industry Knowledge

Become a participant in the next Council on Foundations-Commonfund Study of Investment of Endowments for Private and Community Foundations (CCSF). This annual report provides an overview on investment and governance policies and practices of endowments for private and community foundations.

Read now

Study of Foundations

Posted by Commonfund on Aug 21, 2015

Topic: Governance and Policy | Industry Knowledge

The CCSF study provides an authoritative and comprehensive survey of private and community foundation investment and governance practices.

Read now

Impact Investing

Posted by Paul Von Steenburg on Jul 1, 2015

Topic: Governance and Policy | Responsible Investing

Recently, Commonfund convened an expert panel of investment managers to hold  a roundtable discussion and take a closer look at the different impact investing strategies being implemented today.The roundtable participants were: Timothy Coffin, Senior Vice President of Breckinridge Capital Advisors; David Richardson, CFA, Head of Business Development and Client Service for Impax Asset Management in…

Read now

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

Posted by Commonfund Institute 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.

Read now

Are you achieving CPI + 5% Returns?

Posted by Commonfund on Apr 21, 2015

Topic: Governance and Policy | Industry Knowledge

Is your institution achieving its goals? Are you achieving CPI +5% returns? As a pioneer of the endowment model of investing, Commonfund works with investors every day to apply the endowment model in new ways that address today’s market environment.

Read now

Principles of Investment Management for Long-Term Investors

Posted by Commonfund Institute on Mar 11, 2015

Topic: Governance and Policy | Industry Knowledge

Are you a fiduciary who oversees a long-term investment fund such as an educational, religious or charitable endowment, foundation, hospital asset pool or pension fund? If so, then your role differs fundamentally from those of other investment fiduciaries. With that in mind, we have published the Principles of Investment Management for Long-Term Funds. Download this brochure today to review the key issues and essential principles that you should consider in your decision making process. In it, we discuss…

Read now

Study of Endowments

Posted by Commonfund on Mar 2, 2015

Topic: Governance and Policy | Industry Knowledge

The NACUBO-Commonfund Study of Endowments® (NCSE) provides the most comprehensive analysis of financial, investment and governance policies and practices.

Read now

Viewpoint: Changing our Minds

Posted by Commonfund Institute 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.

Read now

Viewpoint: Alphabet Soup – Responsible Investing

Posted by Commonfund Institute 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...

Read now

Commonfund Benchmarks Study – Healthcare Report

Posted by Commonfund on Aug 28, 2014

Topic: Governance and Policy | Industry Knowledge

The Commonfund Benchmarks Study–Healthcare Report provides an analysis of investment & governance policies & practices of healthcare organizations.

Read now

Viewpoint: Looking Modern and Sharpe

Posted by Commonfund Institute 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.

Read now

Assessing Your Board’s Risk Tolerance

Posted by Commonfund Institute, John Griswold 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?

Read now

Strive for the Best: Building and Maintaining an Excellent Board

Posted by Commonfund Institute, John Griswold on May 19, 2014

Topic: Governance and Policy

How well a board functions determines the fortunes of the organization it governs. Mediocre performance may enable an organization to survive, while weak or dysfunctional boards may jeopardize their organization. Achieving excellence in board governance requires success in four crucial areas...

Read now

ESG – What is it?

Posted by Commonfund on May 1, 2014

Topic: Governance and Policy | Industry Knowledge | Responsible Investing

Generally speaking, Environmental Social and Governance, or ESG for short, is used to describe a group of characteristics that can have a material impact on the long-term success of a company and, potentially, its long-term investment returns.

Read now

Commonfund Roundtable | Evolving challenges in nonprofit governance

Posted by Commonfund on Apr 13, 2014

Topic: Governance and Policy | Industry Knowledge

Commonfund recently convened an expert panel moderated by MYRA DRUCKER (standing, left), Chair of the Board, TrustedPeer Inc. and former chair of the Commonfund Board of Trustees. The roundtable examined recent developments in the ongoing evolution of nonprofit governance. Roundtable participants were (seated, left to right): JOHN GRISWOLD, Executive Director, Commonfund Institute; CINDY LOTT, Senior Counsel to the National State Attorneys General Program at Columbia Law School; and JEFFREY TENENBAUM, Partner and Chair of the nonprofit organization practice Venable, LLP, Washington, D.C. Highlights of their exchange follow.

Read now

Nonstop Non-profit dedicated OCIO

Posted by Commonfund on Apr 12, 2014

Topic: Governance and Policy | Outsourced Investing

As the OCIO model has evolved and expanded in recent years, a number of financial providers have entered markets they may not fully understand—markets such as nonprofit institutions. Their arrival has served to spotlight the differences between generalist practitioners and specialists dedicated to nonprofits. In my experience in the OCIO arena, I have found that nonprofit institutions are often better served by an OCIO provider with a full staff of professionals who are focused solely on nonprofits than by a generalist with a nonprofit's practice among several other competing business units.

Read now

Viewpoint: Looking Modern and Sharpe – Study of Endowments

Posted by Commonfund Institute 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.

Read now

Subscribe and Manage Your Frequency to Insights Blog

Posted by Commonfund on Jan 5, 2014

Topic: Asset Allocation | Equities | Fixed Income | Governance and Policy | Hedge Funds | Industry Knowledge | Market Commentary | Operating Assets | Outsourced Investing | People | Private Capital | Responsible Investing | Risk Management

Subscribe to the Insights Blog from Commonfund to stay informed with the latest information for nonprofit investors and the public sector.

Read now

10 Point Checklist to Get Governance Right

Posted by Commonfund Institute, Tom Hyatt 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.

Read now

10-Point Checklist: Get Governance Right

Posted by Commonfund, Tom Hyatt on Aug 12, 2013

Topic: Governance and Policy

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

Read now

Endowment Spending: A Look Back

Posted by Commonfund Institute on Sep 1, 2012

Topic: Governance and Policy | Industry Knowledge | Investment Strategy

Market volatility has severely tested many nonprofit institutions, causing them to revisit their endowment spending practices. In this paper, Fred Rogers, Vice President and Treasurer of Carleton College, analyzes the NACUBO-Commonfund Study of Endowments® findings and provides a brief primer on endowment spending, budgeting and accounting practices at institutions of higher education.

Read now