Operating charities returned an average 15.1% in fiscal year 2013, a significant improvement from less than 12% the previous year, a report from Commonfund Institute said Monday
The 60 operating charities — consisting of 23 cultural organizations, 19 religious institutions and 18 social-service organizations — reported the returns net of fees for the year ended Dec. 31.
The FY2013 Commonfund Benchmarks Study of Operating Charities reported the improvement from 11.7% in fiscal year 2012 was due to solid equity returns as well as a low-interest-rate environment, said John S. Griswold, executive director of Commonfund Institute, in a news release.
Operating charities are non-profit organizations, such as cultural organizations or social service organizations, that use their endowments to run their own programs as opposed to making cash grants to other organizations.
“Strong returns from domestic equities sparked good returns for participating charities of all sizes,” Mr. Griswold said. “The largest operating charities actually secured the highest return from their domestic equities allocation, but because the smaller charities had the largest allocation to this asset class they secured the highest overall portfolio performance in 2013.”
Domestic equities returned an average 31.1%, followed by international equities at 17.3%, alternatives at 10.5% and fixed income at -0.8%.
As of Dec. 31, the average asset allocation of the 60 institutions that participated in the survey was 28% alternatives, 25% domestic equities, 20% each fixed income and international equities, and 7% short-term securities/cash/other.
