Posted on February 4, 2009

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Some Foundations Making Changes in Investment Strategies, Report Finds

Shaken by a decline in asset values that averaged 28 percent in 2008, some U.S. foundations are making changes in their investment managers and strategies and/or further diversifying their asset mix, a new report from the Council on Foundations finds.

Based on a survey of 127 family, independent, and public foundations, the report, Asset Declines and Investment Strategy Changes by Family, Independent, and Public Foundations (7 pages, PDF), found that while three-quarters of respondents are sticking to their investment strategy, those making changes are generally becoming more conservative. The 20 percent of respondents indicating a change to their level of diversification generally said they were moving toward becoming more diversified.

In addition, the survey found that while nearly half (47 percent) of respondents' assets were held in equities at the end of 2008, more than two-fifths (43 percent) of respondents said that the share of their assets in equities had dropped, while more than a third (35 percent) said they had increased the proportion of assets held in fixed-income securities and cash.

The report also found that nearly half the foundations that use money managers had already changed managers (32 percent) or were considering making a change (17 percent), while nearly a quarter of foundations that use investment consultants had changed consultants (8 percent) or were considering a change (17 percent). Approximately 20 percent of foundations said that they were pursuing actions to reduce the investment fees associated with the management of their portfolios.

“Asset Declines and Investment Strategy Changes by Family, Independent, and Public Foundations.” Council on Foundations Press Release 2/02/09.

Primary Subject: Philanthropy and Voluntarism
Secondary Subject(s): Economic Crisis
Location(s): National

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