Foundation and charity endowments grew by an average of 21 percent last fiscal year, but that was not enough to make up for the sharp declines of 2008, according to two studies by the Commonfund Institute.
More than 170 grant makers in one survey saw their investments increase by an average of 20.9 percent, compared with a 26-percent drop in 2008. In a separate study, 66 cultural, religious, and social-service groups recorded very similar returns in their endowments.
Although assets began to rebound last year, many foundations and charities cut back further on giving and spending.
Fifty-five percent of community foundations, for example, said they gave less in 2009, while only 16 percent said they gave more. Among operating charities, 38 percent spent less and 20 percent spent more.
The Commonfund Institute is the research arm of Commonfund, a company in Wilton, Conn., that manages the investments of about 1,600 universities, foundations, and other nonprofit groups.
Not Beating Inflation
Among the studies’ other findings:
Organizations saw very modest growth over a five-year period, an average of 3.6 percent for foundations and 4 percent for charities. Those returns were not enough to cover spending, inflation, and other costs, according to John S. Griswold, executive director of the Commonfund Institute.
Grant makers gave away an average of 5.9 percent of their assets last year, while operating charities spent an average of 4.9 percent.
Charities surveyed carried a median debt of $20-million; for foundations, that number was $24-million. Social-service groups carried the most debt by a significant margin.
Most organizations had not made major changes to the way their assets were invested.
For foundations, alternative strategies such as energy were the most popular asset class; for charities, domestic equities were most popular.
Grant makers relied on an average of 1.4 staff members to manage their investment portfolios. Operating charities, too, employed an average of 1.4 people who devoted to investments, up slightly from 1.2 in 2008.