Category: Insights

For nonprofit organizations, the endowment/foundation’s ultimate purpose is to support the organization and its activities, accomplished through the annual spend or withdrawal (“the spend”) from the endowment to be used as funds for the operating budget. The Spend Policy is the agreed formal policy that governs how much is taken from the endowment and how the amount will be calculated. The Spend Policy is not merely a procedural requirement but a cornerstone of effective endowment management. Beyond being a hallmark of good governance, it is imperative for stewards of capital to grasp the intricacies of the Spend Policy and its impact on the institution’s financial health and mission fulfillment. With over three decades of dedicated service to the nonprofit sector, TIFF stands ready to offer expert guidance and collaboration in the development and refinement of your Spend Policy, helping you to secure a sustainable and prosperous future for your organization.

This paper outlines the fundamentals of Spend Policy, equipping any Business Officer or Investment Committee member with the information to discuss and understand this important topic.

1. Spend Policy best practices
2. Various methodologies for calculating the spend
3. Industry level data on average spend rates
4. Operating budget implications

These points are brought to life through higher education industry data from NACUBO FY23 Study of Endowments and real case studies from Ivy League schools.

The materials are being provided for informational purposes only and constitute neither an offer to sell nor a solicitation of an offer to buy securities. These materials also do not constitute an offer or advertisement of TIFF’s investment advisory services or investment, legal or tax advice. Opinions expressed herein are those of TIFF and are not a recommendation to buy or sell any securities.

As Kane Brenan, TIFF’s CEO, reflects on his nearly five years with the firm, he takes pride in the advancements made in supporting TIFF’s clients’ organizational goals. While TIFF’s mission remains the same, there have been notable strides in strengthening the team, enhancing the investment program, offering more tailored advice, and more.

Read more about TIFF and our outlooks for the year ahead here.

The materials are being provided for informational purposes only and constitute neither an offer to sell nor a solicitation of an offer to buy securities. These materials also do not constitute investment, legal or tax advice. Opinions expressed herein are those of TIFF and are not a recommendation to buy or sell any securities.

At TIFF, we aim to add value to our clients in two distinct ways. First, we provide advice on Strategic Asset Allocation, or “SAA.” We define SAA as the long-term portfolio weightings that, in light of an organization’s unique financial circumstances, help it accomplish its long-term goals. Second, once we agree on an SAA and an associated benchmark, we seek to achieve net-of-fee alpha above and beyond that benchmark. If we can deliver on these two value-adds, we are likely to have success in enhancing the missions of our nonprofit clients.

SAA and benchmarking are handled very differently across the outsourced chief investment officer (OCIO) industry, with firms taking a variety of approaches. The objective of this paper is to provide some detail around our framework for each. More specifically, we will address:

• Why we define SAA as the allocations to four major asset classes, rather than a more granular and detailed universe of asset classes
• Our rationale for using risk-equivalent public market composites as benchmarks, rather than other options that may not be investable or transparent in their construction

The structure of the SAA and benchmark may not seem quite as critical as other investment decisions. We would argue however, that the downstream effects of these structures can be quite impactful over the long-term.

The materials are being provided for informational purposes only and constitute neither an offer to sell nor a solicitation of an offer to buy securities. These materials also do not constitute investment, legal or tax advice. Opinions expressed herein are those of TIFF and are not a recommendation to buy or sell any securities.

TIFF collaborates with clients to understand their distinct goals and situations and to define their investment needs.  Additionally, TIFF seeks out those active managers that we believe to be the best from across the investment landscape to meet these needs. Less apparent is the third leg of TIFF’s investment work: the portfolio construction that allows TIFF to harness active management risk and mold it to meet our clients’ investment needs. TIFF employs a multi-layered approach involving asset-class allocation, diversification, exposure management and focused asset-class views. This process helps us tailor a portfolio’s return potential, drawdown risk and liquidity profile, bridging the gap between active managers’ capabilities and clients’ objectives.

The materials are being provided for informational purposes only and constitute neither an offer to sell nor a solicitation of an offer to buy securities. These materials also do not constitute investment, legal or tax advice. Opinions expressed herein are those of TIFF and are not a recommendation to buy or sell any securities.

TIFF works with a wide range of nonprofits. The individuals that we interact with from these organizations have a wide range of investment experience and knowledge. This video is for those individuals that have less experience with financial markets and would like to gain a better understanding of endowment investing.

Watch this video and more, click here.

The materials are being provided for informational purposes only and constitute neither an offer to sell nor a solicitation of an offer to buy securities. These materials also do not constitute investment, legal or tax advice. Opinions expressed herein are those of TIFF and are not a recommendation to buy or sell any securities.