Nonprofits want to know if they can count on continued financial support from foundations. While no one has a crystal ball to predict the future, we do have historical data that shows the high correlation over time between investment returns and giving. We also know that foundations’ investment returns tend to track a portfolio blend of stocks and bonds which we can use as a proxy for current performance. Putting together the correlations between the proxy balanced portfolio of stocks and bonds and the relationship between returns and giving, it follows that giving should track the proxy portfolio over time.
Our affiliate, FoundationMark estimates the investment performance of over 40,000 foundations. Using data from foundations’ reported asset allocations, estimated returns, and public market indices performance we created a proxy for current foundation performance, the FoundationMark Performance Tracker, (“FPT”).