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Consulting Group

Institutional Services ♦ Endowments & Foundations

Challenges Facing Endowments and Foundations

We all know America's charitable institutions are under greater financial pressure than ever before. From the White House on down, leaders increasingly are looking to private philanthropy to help meet the nation's most pressing social and cultural needs. We also know the resources available to address those needs are limited, and the outlook for future gifts is uncertain.

All of this highlights the critical importance of managing endowed assets as effectively and efficiently as possible. By enhancing investment returns and controlling risk, your endowment may be able to support higher levels of spending without suffering a decline in future purchasing power.

Spending and Investing Decisions for Institutions

Safeguarding the financial health of your organization is obviously is one of the most important responsibilities you face as a Fiduciary. Prudent investment management is a crucial part of that duty. So is careful budgeting.

But it's important to recognize that spending and investment decisions can't be made in isolation. Sound planning must take into account a host of related factors - including projected spending needs, expected investment earnings and future fundraising prospects.

Failing to address these issues in a comprehensive way can lead to mistakes:

  • If current budgets are set too high, endowment growth may suffer, forcing drastic spending cuts down the road.
  • An overly conservative investment strategy may not produce the returns needed to support spending targets-including those required under federal tax law.
  • An aggressive strategy may boost returns, but also increases short-term risk.

Although the statements of fact and data herein have been obtained from, and are based upon, sources that the Firm believes to be reliable, we do not guarantee their accuracy, and any such information may be incomplete or condensed. All opinions included herein constitute the Firm's judgment as of the date indicated and are subject to change without notice. This material is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. Past performance is not a guarantee of future results.

Please contact your advisor for more information about available products, services and research.

For more information, please contact your Financial Advisor.

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