This biweekly series explores endowment fundamentals, tackles tough questions about asset management, and shares the latest information on key issues that affect endowment investing, spending, and management. Over the course of six sessions, thought leaders from leading investment companies, the higher education sector, and other stakeholders share their expertise on current trends and challenging topics.

Even among those with years of higher education experience, endowments and how they work can be challenging to describe. Experts will explain the legal and governing structure of endowment funds and how they are managed to provide colleges, universities, and other nonprofit organizations with a steady and reliable source of funding over the long term. This session explores the basic structure of endowments and covers how they are managed to support current operations without shortchanging the future.

This session provides an overview of the results of the 2023 NACUBO-Commonfund Study of Endowments, the most comprehensive analysis of endowment investment returns, asset allocations, and governance policies and practices at U.S. higher education institutions and affiliated foundations. The 2023 NACUBO-Commonfund Study of Endowments, the 50th anniversary of NACUBO’s endowment study series, is expected to show that college and university endowments posted below average returns in fiscal year 2023. College and university chief investment officers and other panelists will look back at the investment returns, asset allocations, and other factors that influenced performance in FY23. Panelists will address the challenges of the financial market conditions they are facing in 2024 and beyond. They will also share the major highlights endowments have seen over the past 50 years.

Institutions with endowments must have strong relationships between business, academic, investment, development, and governance functions. This session touches on how many moving institutional parts work together and why. Topics include donor reporting, endowed faculty positions, accounting, and record keeping for individual funds, fiduciary responsibility, funds functioning as endowments, public policy and perception, understanding the giving pipeline, and the importance of communicating endowment spending benefits internally and externally.

College and university investment offices have been responding to stakeholders’ social concerns for decades. Responsible investing (RI) involved responding to calls to divest from South Africa because of apartheid in the 1960s–1980s and now includes considering concerns about climate change and racial equity issues in terms of management and fund ownership. For example, data has shown that a lack of diversity in the asset management field, and a lack of diversity among college and university asset managers specifically, is an ongoing and persistent issue that some colleges and universities have begun to address. Others have made major new strategic investment decisions to stop investing in fossil fuels. Further, there is increasing interest from regulators and others to increase reporting on hard-to-define environmental, social, and governance (ESG) investing. During this session, explore strategies for investing with impact and with fiduciary duty.

Most institutional endowments have seen lower investment rates of return over the past two years. At the same time, there is pressure on campuses to spend more endowment dollars on student financial aid and other important functions. To deal with these pressures, some institutions made special spending appropriations, while others stayed the course in their spending dollars, resulting in modest spending increases over time due to the spending “smoothing” effect of multi-year trailing average returns. Can a single year of significant spending compromise intergenerational equity? Since returns can be unrealized, what will continued market volatility mean for institutions that significantly increase spending? What are the best strategies to ensure stability while increasing spending? This session’s experts will address such questions, especially given large swings in returns over the past two years. Panelists will also discuss the latest strategic investment practices that consider national and global economic policy decisions.

How can higher education endowments best compare their investment rates of return and other results against peer institutions? What are the best tools available for conducting effective, data-driven analysis of endowment performance? This session will discuss the critical topic of college and university peer-analysis benchmarking of endowment returns, asset allocations, and other key data. Panelists will provide advice on the tools and tips that can be used by investment managers and committees for evaluating performance against a variety of peer institutional sets.

Presenters review all accounting and reporting considerations and requirements for true endowments and funds functioning and endowments. Accounting for the various split-interest gifts that comprise planned giving arrangements are also discussed. Several differences between GASB and FASB requirements are highlighted.

Presenters review all accounting and reporting considerations and requirements for true endowments and funds functioning and endowments. Accounting for the various split-interest gifts that comprise planned giving arrangements are also discussed. Several differences between GASB and FASB requirements are highlighted.