Small foundations arent expected to make many investment changes in 2009 other than becoming more conservative, according to a January survey conducted by Citi Institutional Consulting and the Association of Small Foundations.
Nearly half of the 350 foundations surveyed reported investment losses of 20% or more in 2008, and 30% had losses between 10% and 20%. Citigroup spokeswoman Diane Green said that more than 90% of the surveyed foundations have less than $50 million in assets.
Twenty-eight percent said they intend to increase their cash balances, while 25% plan to increase their investment-grade bond allocations. Another 23% of the foundations plan to increase their exposure to U.S. large-cap stocks.
Also, 16% said they intended to reduce their allocation to hedge funds, while 14% and 11%, respectively, planned to trim their international and emerging market equity mandates.
In light of the markets recent volatility, it is heartening that the vast majority of the foundations surveyed recognize the value of sustaining their long-term, strategic allocation, Patrick Schussman, director of Citi Institutional Consulting, said in a news release.
Although increasing cash allocations could diminish future growth, Mr. Schussman said, nevertheless, the vast majority of small foundations deserve to be commended for steadfast investment discipline and refusal to panic.