(June 26, 2012) — The investment performance of foundations languished in the 2011 fiscal year, the 2012 Commonfund Benchmarks Study of Foundations has found.
The average fiscal year 2011 return of the 179 private and community foundations participating in the survey was -0.9%, an underwhelming figure and a sizeable drop from average returns since 2008. The average foundation earned 12% in fiscal year 2010 and 21% in fiscal year 2009, the study noted.
The 2011 fiscal year was “frustrating… for foundations,” said John S. Griswold, executive director of Commonfund Institute. “On top of the negative investment returns, the addition of inflation and investment management costs means that these institutions fell a little farther behind financially, even before spending for mission support. It’s fortunate that this year was preceded by the two strong years of FY2009 and FY2010.”
Although disappointing, the return of -0.9% represents a far cry from fiscal year 2008, when foundations returned a painful -26%. The study noted that the average foundation returned 5.2% over a 10-year period.
From an asset allocation standpoint, fixed income was a winner for foundations, returning an average of 5.7%. Investments in international equities, on the other hand, hit investment performances with a return of -12.2%. Alternative strategies, though in aggregation gaining 2%, offered some bright spots, with venture capital generating 14.2% and private equity earning 8.9%