Foundation Source’s 2021 Report on Private Foundations – Endowments, which functions as a companion to our 2021 Report on Private Foundations – Grantmaking issued earlier this year. The two reports work together to provide a complete picture of the core giving and funding activities at the heart of private foundations.

While we have seen rays of hope during the second year of the COVID-19 pandemic, we continue to navigate a shifting and unpredictable landscape that impacts people, businesses,  governments and nonprofits, and we remain committed to sharing our insights with philanthropists to help them make educated, strategic decisions in the pursuit of their charitable missions.

In this quantitative study, we analyzed the endowment activities of more than 1,000 private and family foundations across 2019 and 2020 to better understand the asset allocation, portfolio performance, fees and various financial transactions that allow foundations to endure and continue their ongoing charitable work.

Every foundation has unique investment objectives to consider when designing their portfolio. The endowments in this study invest more than half of their assets in equities, which is consistent with a long-term horizon and institutional-quality investment strategies. They also rely on a complement of other asset types to round out their portfolios and address other priorities such as liquidity, risk mitigation, and, in some cases, aligning their investments more closely with their mission.

High allocations to equities allowed foundations to benefit from strong markets and realize solid growth. At the same time, donors continued to replenish their endowments with additional contributions helping to fund the increased grant activity we observed in earlier reports and indicating ongoing philanthropic intent. As such, we believe the outlook for future giving is encouraging.

So, where do we go from here? While it may be true that the only constant is change, at Foundation Source, we will continue to serve as the trusted partner for philanthropic foundations as we have for the past 20 years. We hope that our 2021 Report on Private Foundations – Endowments helps inform your views and guides your philanthropic vision and activities as we follow this journey together.