Community Foundation Investment Strategy Pays Off in High Performance

As a steward of endowed assets that produce income for charitable needs, the Community Foundation of Western Nevada has a critical job. As you might expect, 2016 was an excellent year for investments. We are thrilled because the result will be hundreds of scholarships, hundreds of grants, and millions of dollars distributed in the community, mostly from generated income on the endowed investments. The New York Times published an article this week, “Harvard Makes Changes in Managing a Lagging Endowment.”  Harvard’s endowment equates to the wealth of the 12th richest person in the world. Would the Community Foundation returns be better if, like the Harvard endowment, we had a team of hundreds of professionals? Maybe not. The massive Harvard endowment had managed a significant portion of their assets internally, but after a few years of lagging performance, they are moving to more outside managers. Essentially this the same structure the Community Foundation uses. Compared to Columbia, which allocated their endowment funds to a diverse group of outside fund managers, Harvard’s performance over the last ten years was 2.4% less, per year, so over ten years it earned about 25% less in total returns. Although our endowment is much smaller than Harvard’s, we have an excellent Investment Committee that ensures close oversight, monitoring, and direction of our invested funds. Community Foundation investments are managed by professional advisors in accordance with our investment policy. As we grow, we will consider additional oversight, as many of peer community foundations have done. We also continue to watch how the largest endowments in the country, like Harvard’s, are managed. As the article makes clear, endowments regardless of the size of their investment must make changes as they chase performance. We do so by working with a variety of different managers. The individual investment managers' performance varies but by careful review and analysis over time; the Community Foundation Investment Committee's approach is helping increase our performance. Through this strategy, we established relationships with terrific firms and advisors and now have access to higher performing funds and lower fees, which also helps performance. A key measurement for us is to compare our endowment performance to that of our peers around the country, and I’m pleased to share we compare very well. 2016 was a wonderful year for giving in our community. As the Community Foundation works to close out our fiscal/calendar year 2016, I am grateful to administer philanthropy in Northern Nevada. We have had an impressive year, and I will be sharing more about that in the weeks to come. The generosity of people in our community is inspirational and humbling. Philanthropy isn’t just about giving; it is about the act of caring and helping others. Whether you can support our community through charitable giving, through volunteering, or through getting involved in community initiatives, the Community Foundation of Western Nevada, YOUR community foundation, is here to help. If you’d like to join in, please give me a call. It’s a smart way to invest. At the Community Foundation of Western Nevada, we connect people, like you, who care, with causes that matter. Chris Askin, President, and CEO. 775-762-1932