The Math is Simple
Private foundations have over $900 billion in assets. An incremental 1% return on their investment would yield an additional $9 billion….per year…every year.
To put that in perspective, the additional $9 billion would equal the annual charitable support provided by 12 Ford Foundations, 36 Rockefellers, or 45 Carnegies – you get the picture. Better returns of just 1% would be the biggest thing to hit philanthropy since Bill Gates (or actually bigger since Gates disburses $5.6 billion a year).
Mind the Gap: Is 1% Better an Achievable Target?
Over the 5 year period to December 31, 2017, the average foundation returned 8.2% while a portfolio comprised of 60% US Stocks (S&P 500) and 40% US bonds (Bloomberg Barclays Aggregate) returned 10.3% – a difference of 2.1% per year. Just cutting that gap in half would have boosted performance by 1%.