With all the buzz and growing interest in alternative investments and how they may be able to provide outsize returns and downsize protection to private foundations, we decided to ask the experts to weigh in and recently hosted a webinar on this topic. Josh Stamer, Senior Managing Director at Foundation Source, was joined by Ben Durrant, CIO and co-founder of Provenio Capital, an advisor specializing in alternative investments, and Jeannea Varrichio, Foundation Source’s Legal Services Director, to discuss the legal and tax implications that foundations must consider as they explore and allocate to nontraditional asset classes.
The strategies they shared could enable individuals, boards and corporations to expand their mission, grow their asset base and align a spirit of entrepreneurship within their foundation. Check out the first takeaway below.
#1 Take Advantage of Benefits
Alternative assets are any investments other than cash, publicly traded securities and bonds, and they can play a key role in funding a philanthropic mission when used through private foundations. According to our proprietary research, as foundations grow in size, so does their use of alternatives. Some of the benefits to foundations include:
- Higher returns
- Lower correlation to public markets
- Less sensitivity to interest rates or inflation
- More predictable returns
- Capital preservation
While hedge funds and private equity are the most commonly used alternative assets among foundations, others include tangible property, real estate and cryptocurrency, to name a few.
Ready to Talk to a Philanthropic Specialist?
Whether you’re starting a private foundation or want to better manage your foundation with the latest cutting-edge technology, we’d love to chat! Schedule a call with us here or reach us at 800-839-0054. Together, let’s #begiving.
Foundation Source does not give tax, legal, or investment advice. You should consult with your attorney, tax advisor, and/or financial advisor regarding your specific situation.