CY 24 Foundation Annual Layout FINAL

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This study is based on a survey that Cambridge Associates administers annually to our foundation clients. The report that follows summarizes returns, asset allocation, and other investment-related data for 114 foundations for the year ended December 31, 2024. This year’s report features commentary and exhibits spread across four separate sections: Investment Portfolio Returns, Benchmarking, Asset Allocation and Implementation, and Payout From the Long-Term Investment Portfolio.

While calendar year 2024 performance lagged the previous year, it remained strong, with most foundations reporting returns of near 10% or higher. However, it was also the second straight year that diversified portfolio returns fell short of an investment option with heavier public allocations. As a result, the three-year peer median return underperformed a simple blended index weighted 70% global public equity and 30% fixed income. The story was the opposite over the longer term, where private investments continued to be a primary return driver for the best-performing portfolios. The Investment Portfolio Returns section highlights these contrasting performance themes for the short-term versus long-term periods.

Investment Portfolio Returns

Benchmarking

The increase in private equity allocations was the key trend in asset allocations over the past decade. Almost every other asset class saw a decline in allocations over the same period when it came the peer group average. The takeaways were similar when looking at recent shifts in asset allocation policies, as a significant portion of the respondent group raised their target allocations to private equity and venture capital in 2024. The Asset Allocation and Implementation section covers this and other topics related to portfolio implementation, including an analysis that shows that passive investing in US equities has gained more traction in recent years.

Asset Allocationand Implementation

Payout From the Long-TermInvestment Portfolio

The primary policy benchmark for most respondents is a static-weighted blend of indexes where the weightings align exactly or closely with the asset classes and target percentages specified in the asset allocation policy. Perhaps the most consequential benchmarking decision foundations have had to make in recent years is how to represent policy equity in the policy benchmark. The majority of respondents use a public index for that representation, and this cohort by and large saw significant underperformance versus their benchmark in 2024. Our Benchmarking section summarizes the various approaches that foundations use for benchmarking total portfolio performance and compares foundation performance versus policy benchmark returns.

The vast majority of participants in this study are private nonoperating foundations. These types of foundations must make qualifying distributions that amount to approximately 5% of their total asset value each year. Consequently, most respondents have spending objectives that are closely tied to this legal requirement. Our Payout from the Long-Term Investment Portfolio section summarizes data pertaining to spending for these types of foundations.

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Institutions Have an Asset Size Between $100 Million and $1 Billion

Institutions Have an Asset Size Less Than $100 Million

Community Foundations

Private Operating Foundations

Private Nonoperating Foundations

Institutions Have an Asset Size Greater Than $1 Billion

Profile of Respondents

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