Endowments and Foundations Struggle to Balance Operations and Investments

Incorporating Total Enterprise Management Helps Bridge the Gap Between Operational Needs and Investment Return

BOSTON--()--NEPC, LLC (www.nepc.com), one of the industry’s largest independent, full-service investment consulting firms to endowments and foundations, today made public the results of its Q2 2015 NEPC Endowment and Foundation Poll, a measure of endowment and foundation views on the economy, investing and key market trends. This edition focused on Total Enterprise Management (TEM), an investment risk management tool that combines investment decisions with the operating needs of an organization, to help decision makers holistically approach organizational risk.

Here is an infographic highlighting the survey’s primary findings.

Long and short term risks were at the forefront of participants’ minds. Long term, respondents felt not meeting the organization’s mission is their key concern. Shorter term, most are concerned with “balancing operation and spending needs with investment return/risk/liquidity.” These results paint a different picture from a similar NEPC survey conducted in 2012, when “impact of return on the organization” was the top concern.

“Endowments and foundations are extremely worried about finding the right balance between their spending needs and their investment returns, particularly as they plan into the future,” said Kristin Reynolds, Partner in NEPC’s Endowment and Foundation Practice. “More importantly, the vast majority are concerned about the most fundamental reasons why an endowment or foundation would have an investment program: meeting their mission and funding needs. This is the precise reason why we encourage wider acceptance of TEM strategies.”

On a positive note: many endowments and foundations have incorporated key elements of TEM within the past two years, with roughly half increasing investment committee/operations interaction (54%), increasing investment committee/finance meetings (46%), and adding more liquidity to meet short-term obligations (43%). Eighty eight percent now discuss operational issues at investment committee meetings.

Even with the improved communication, 81% of respondents still measure the success of their investment program against market benchmarks, and over half (56%) continue to compare results to their peer group performance.

Other top survey findings included:

  • 43% think the economy is in a better place now than it was this time last year
  • 46% said that a “slowdown in global growth” is the biggest threat to their near term investment performance, though this is down from 56% last quarter and 68% in the third quarter of 2014
  • 71% feel completely happy with the amount of current interaction between the investment committee and finance

About the Survey

The Q2 2015 NEPC survey was conducted online by the Endowment & Foundation Practice Group in June 2015. Copyright is held by NEPC. For the full survey results, contact Caitlin Byrnes at cbyrnes@waterandwallgroup.com.


NEPC, LLC® is an independent, full service investment consulting firm, providing asset allocation, manager search, performance evaluation, and investment policy services. It works with institutional investment programs and high net worth clients on both an advisory and discretionary basis.

The Endowment and Foundation Practice Group services 116 endowment and foundation retainer relationships, representing assets of $59 billion, from offices in Atlanta, Boston, Charlotte, Chicago, Detroit, Las Vegas and San Francisco. Learn more at http://www.nepc.com/clients/endowments_foundations and www.twitter.com/NEPC_EandF.


Water & Wall Group
Caitlin Byrnes, 212-343-2363

Release Summary

NEPC, one of the leading investment consulting firms, today made public the results of its Q2 2015 Endowment and Foundation Poll. This edition focuses on Total Enterprise Management (TEM).


Water & Wall Group
Caitlin Byrnes, 212-343-2363