Foundation Investments

During the past few years, endowments of the country's largest foundations and universities have experienced healthy returns at rates most investors would be envious of. This wasn’t always the case, as noted in the new book Foundation & Endowment Investing: Strategies of Top Investors and Institutions by Lawrence E. Kochard and Cathleen M. Rittereiser (John Wiley).

A few decades ago, endowments would often underperform as a result of conservative investments. What was the turning point? About 40 years ago, McGeorge Bundy (the president of the Ford Foundation at the time) was troubled by the fact that endowments were not keeping up with the rising costs of higher education. He noted in the 1967 Ford Foundation annual report: “We have the impression that over the long run caution has cost our colleges and universities much more than imprudence or excessive risk taking.”

Kochard and Rittereiser explain how Bundy’s leadership and the Ford Foundation’s support led to legal and tax changes that have provided the flexibility for managing endowment portfolios that we see today.

The core of this book, however, contains profiles that describe the experience and lessons from respected chief investment officers (CIOs) at institutions such as the Hewlett Foundation, Massachusetts Institute of Technology, Carnegie Corporation of New York, the Henry J. Kaiser Family Foundation, and others.

The CIOs discuss their investment approaches, management techniques, and key challenges they have encountered.

Are you interested in other readings? Search the Catalog of Nonprofit Literature for more readings on endowments or foundation investments.