How are Foundations Doing?
We asked the fundamental question about foundation investment performance confident that we would easily find a good answer. We couldn’t. Despite the enormous impact that investment performance has on charitable giving, there were no sources of independent, objective and representative performance measures specifically focused on private foundations, so we built them. FoundationMark (our sister company) publishes performance indices and provides free reports to trustees quantifying their foundation’s investment performance in relation to the foundation market and their peers.
At Foundation Advocate we ask ourselves the vital question, How are Foundations Doing?, every day. We publish our newsletter to share our thoughts and views on foundation investment performance. We believe that providing a forum for a discussion of performance will lead to better informed investors and hopefully better performance.
We Don’t Offer Investment Advice
We used to advise nonprofits on their investments – which led us to wonder about foundation investment performance in the first place – but felt compelled to track this industry from an “insiders” point of view, essentially providing the data and information that we wanted when we advised nonprofits.
Why We Do It: 1% Better Performance
Unlike public or operating charities which actively seek donations to support their work, private foundations rely on their investment returns to support their philanthropic missions. For most foundations, investment returns provide the sole source of income
Foundations have $1 trillion in assets. If their investments perform 1% better a year, that translates to $10 billion a year…every year! How do you get better at anything? One way is to look around at other people doing the same thing as you, seeing what they are doing better or worse and applying those lessons. We believe that foundations should look to their peers for ideas about evaluating and improving their performance or process.
Simply put better returns mean more money to charity.