White Papers

Assessing the State of Healthcare

Posted by Bill Jarvis 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.

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The Investment Policy Statement

Posted by John Griswold, Bill Jarvis 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.

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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.

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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.

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Fiduciary Duty & Environmental Responsibility: Crafting A Low Carbon Response

Posted by Bill Jarvis on Jan 20, 2016

Topic: Responsible Investing

Developments in world financial markets seem to occur more quickly every year, requiring ever-higher levels of expertise on the part of investment committees. Climate change is a more slowly-evolving issue that will require a more strategic approach from trustees and investment committees.

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The Curious Case of Risk Exposures in Diversified, Multi-Asset Class Portfolios – A Deep Dive

Posted by Jess Gaspar, Suresh Iyer on Dec 30, 2015

Topic: Asset Allocation | Equities | Quant Strategies

Previous research at Commonfund has demonstrated that a traditional 70/30 stock/bond portfolio has north of 99 percent of its risk allocated to equities. Thus portfolio risk in the traditional portfolio is not broadly diversified across equities and fixed income, but rather, highly concentrated in one exposure: equities. Does a more diversified, multi-asset class portfolio do a better job of balancing risk?

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Understanding the Cost of Investment Management

Posted by Bill Jarvis 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.

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

Posted by Bill Jarvis 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.

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Chasing Winners: The Appeal and the Risk

Posted by John Delano, Kristofer Kwait on Aug 6, 2014

Topic: Hedge Funds

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Assessing Your Board’s Risk Tolerance

Posted by John Griswold, Bill Jarvis 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?

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Strive for the Best: Building and Maintaining an Excellent Board

Posted by John Griswold, Bill Jarvis on May 19, 2014

Topic: Governance and Policy

Excellent boards are made, not born. Achieving excellence in board governance requires success in four crucial areas: capable leadership; sound organizational structure; attention to fiduciary duties; and a culture that creates a cohesive board.

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Outsourced Investment Management: An Overview

Posted by John Griswold, Bill Jarvis on Nov 19, 2013

Topic: Outsourced Investing

Once seen primarily as a solution for small institutions with limited resources, outsourcing of the investment management function is now widespread, with a broad range of long-term investors turning to the outsourced chief investment officer model. Properly implemented, outsourcing can help institutions with both large and small asset pools to address portfolio complexity and risk management challenges, benefit from more timely decision-making and contend with an increasingly rigorous regulatory environment, while enabling trustees to focus on improving institutional governance.

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From SRI to ESG: The Changing World of Responsible Investing

Posted by John Griswold, Bill Jarvis on Sep 19, 2013

Topic: Responsible Investing

Thoughtful investment professionals continue to debate whether a portfolio’s long-term performance can be enhanced by including environmental, social and governance (ESG) considerations in the security selection process, but responsible investing is more than a passing trend. Long-term fiduciaries should educate themselves on the fundamental arguments for and against ESG, and think critically about its meaning for the institutions they serve.

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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.

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Essential Not Optional

Posted by Commonfund Institute on Aug 25, 2012

Topic: Industry Knowledge

In an era when many believe that returns from financial markets will be lower than in the recent past, endowed nonprofits no longer have the option of treating fund-raising as a tactical resource. Fund-raising for endowments has become an essential strategic capability that endowed institutions will have to build or acquire in order to thrive – or, perhaps, to survive. For this paper, we have reviewed the existing literature and sources of information on giving, and have been able to consult with leading academic researchers and fundraisers for leading nonprofit institutions. Their contributions form the basis for the conclusions expressed here.

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Holistic Risk Management for Perpetual Portfolios:
Keeping an Eye on What’s Important

Posted by Commonfund on Jan 15, 2008

Topic: Governance and Policy | Industry Knowledge | Risk Management

Risk management is inseparable from the investment process. Investment theory and practice both teach that without the assumption of risk by an investor there can be no possibility of return. This paper describes and analyzes the various types of risk ...

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