NEPC Survey: Endowments and Foundations Expect COVID-19 Recession to be Similar to 2008

BOSTON--()--NEPC, LLC one of the industry’s largest independent, research-driven investment consulting firms, today announced the results of their endowments and foundations COVID-19 flash poll. This poll examines how these organizations are shifting their strategies amid the coronavirus pandemic.

The results show:

  • The majority (55%) of endowments and foundations expect a severe recession similar to that of 2008. Forty-one percent of respondents are more optimistic and expect a short, sharp COVID-19-driven recession followed by a strong recovery.
  • The majority (61%) of organizations are rebalancing their portfolios in response to recent market moves, with 14% working to raise additional cash and 13% reducing their overall risk exposure. Only seven percent of all respondents indicated they are taking no action at all.
  • The majority (61%) of respondents are taking immediate action to reduce their costs, expenses, and spending rate to protect the corpus. Education foundations, in particular, are working to reduce their costs and expenses. Fifty-seven percent of these respondents indicated they are currently reducing their costs, most likely to reposition themselves for a more volatile future. This compares to the 11% of organizations that are increasing their spending rate to further support ongoing operations.

“Our survey highlights a slight disconnect between endowments’ and foundations’ recession outlook and what the market has been experiencing the past two months,” said Kristin Reynolds, Partner and Co-Leader of NEPC’s Endowment and Foundation practice. “The results also mimic what we’ve been hearing from our clients - that all options are on the table. With so much noise and volatility afoot, it’s imperative that endowments and foundations work with a trusted consultant on portfolio adjustments and robust modeling strategies.”

The nonprofit sector is taking action to support organizations and individuals impacted by the pandemic. More than one-quarter (28%) of private and community foundations are redirecting grants to help address COVID-19 challenges.

This survey was conducted online by NEPC’s Endowments and Foundations Practice Group in March 2020 amid the COVID-19 outbreak. The survey had 105 respondents across education endowments and community, family, private, and public charity foundations. Copyright is held by NEPC.

NEPC, LLC:

Employee-owned NEPC is one of the industry’s largest independent, full-service investment consulting firms, serving over 350 retainer clients with total assets over $1.2 trillion. To learn more about NEPC, visit nepc.com.

Contacts

Media:
Corey Law
NEPC@fullyvested.com

Release Summary

Independent, research-driven investment consultant NEPC announced the results of an E&F flash poll about their COVID-19 recession outlook.

Contacts

Media:
Corey Law
NEPC@fullyvested.com