Aligning asset allocation decisions with organizational spending and other financial decisions is the top priority among non-profit executives surveyed by SEI.
Forty-eight percent of respondents said such an alignment is a “high priority” with 13% calling it an “extremely high priority.”
Portfolio decisions have historically been focused on performance, rather than the organization's broader financial goals, according to the report.
Making asset allocation changes focused on downside risk protection was the second priority with similar results — 48% ranked it a “high priority” and 10% said it was an “extremely high priority.”
“As market volatility continues, non-profit investment committees face a challenging year ahead in aligning endowment assets with organizational spending needs,” Kevin Matthews, vice president and managing director, solutions team, SEI Institutional Group, said in a news release. “Limited resources and time constraints have led many non-profits to outsource all or a portion of their portfolio management to a third-party fiduciary partner. Outsourcing allows the investment committee to focus its time and attention on more strategic investment and organizational finance decisions.”
Also 43% are considering outsourcing the investment management of all or some non-profit and endowment assets.
The rest of the top five priorities include decreasing volatility by adding new asset classes for diversification, defining investment management fiduciary responsibilities for trustees and investment consultants, and finding ways to best evaluate the effect of potential investment market changes on the invested assets.
The entire list can be viewed on SEI's website at www.seic.com/enUS/about/8516.htm.
SEI surveyed 150 executives and investment committee members overseeing U.S. non-profits and university/college endowments. The survey doesn't specify whether those surveyed are SEI clients.