FEG Investment Advisors (FEG) released the results from the FEG 2019 Community Foundation Survey which saw spending rates decrease and interest in responsive investing increase.
The 2019 survey covers fresh perspectives on topics such responsive investing, donor advised funds, investment committee structure, and administrative fees.
“We believe that focusing on enterprise considerations in addition to investment concerns adds a greater value to our clients,” said consultant Jeff Weisker, Senior Vice President at FEG. “That is why our survey goes beyond asset allocation and performance. We feel the survey offers a platform to discuss enterprise trends and grasp the community foundation universe sentiment on these topics of interest.”
Some of the key findings on select investment and enterprise topics are provided below:
- While the overall percentage is limited, nearly 50% of community foundations surveyed have investments in Responsive Investing Strategies—a broad term encompassing Environmental, Social and Governance, Mission Related Investing, Program-Related Investing, and Socially Responsible Investing.
- Community foundations who allow externally managed funds have 18 on average.
- Asset allocation findings highlighted differences between smaller and larger community foundations. Larger foundations have less of a home country bias and allocate more to hedge funds. Average allocations for U.S. equities ranged from 47% for community foundations with less than $25 million in assets, to 33% for community foundations with more than $250 million in assets while hedge funds ranged from 2% to 11% respectively.
- Spending policy findings showed that the average foundation spends 4.4% of its assets per annum, and the most common spending policy methodology is a rolling 12-quarter average.
The 2019 survey was issued to community foundations nationwide and received 112 responses from 35 states, with assets ranging from less than $25 million to more than $1 billion.
FEG first issued the survey in 2015 to clients with the explicit goal of providing a peer comparison for spending policy and asset allocation. Based on client feedback that current surveys available to community foundations often are too narrow in scope, FEG expanded their survey to include fresh perspectives on topics such as fundraising, donor advised funds, investment board governance, and responsive / mission-based investing.
To learn more, visit www.feg.com/studies.
About FEG Investment Advisors: FEG Investment Advisors has worked with community foundations for more than 30 years. FEG provides investment consulting, portfolio management, and research services to clients nationwide. Established in 1988, the independently-owned firm has approximately $65 billion in total client assets under advisement as of March 31, 2019. FEG services include FEG Consulting, which provides traditional, nondiscretionary investment consulting services to institutions; Portfolio Management, which provides outsourced CIO and discretionary portfolio management services for institutions and financial intermediaries; and FEG Research Services, which provides traditional and alternative strategies’ investment manager research, due diligence and monitoring. For more information, visit www.feg.com.
About the FEG Community Foundation Survey: The data is obtained from the proprietary FEG 2019 Community Foundation Survey. The survey was open for responses online from March 4 – April 5, 2018 and received 112 responses. Participants also had the option to complete as a word document and email the results back to FEG. The data from this survey was grouped into five categories based on assets of the community foundation with assets ranging from less than $25 million to greater than $250 million. The information in this study is based on the responses provided by the participants and is meant for illustration and educational purposes only.