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Corporate & Institutional

Endowments & Foundations Update: Key 2022 Trends

Walter J. Dillingham Jr., CFA
Director of Endowments & Foundations National Practice

August 5, 2021

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This update summarizes key trends we’re tracking as we continue to focus on the endowment, foundation, and nonprofit marketplace. The Wilmington Trust Endowments and Foundations team categorized them into investment and fundraising trends, since these are the two key ways to grow endowment funds. With the pandemic essentially behind us, many nonprofits are now assessing their endowment strategies, fundraising goals, and strategic plans in light of recent geopolitical turmoil.

Investment-related trends

Surging inflation, rising interest rates, and the Russia-Ukraine situation are leading to greater uncertainty on the U.S. economy and capital markets. While the stock market finished strong in 2021, nonprofit boards are reviewing their endowment strategies and strategic plans. Many boards, concerned about the recent stock market volatility, are reassessing their asset allocations and liquidity positions. Investment committees are also speaking regularly with their investment advisors about their risk levels and applying stress testing to their portfolios.

Boards also continue to monitor and refine their investment policy statements, which include strategic and tactical asset allocation targets and endowment spending rates, as market returns are expected to be lower over the next decade. Some nonprofits have assessed their spending levels, which has led to an increase in some cases. In these current times, endowments and foundations are also asking about the overall value-add their managers bring to the relationship as they seek to grow their endowments in other ways, such as fundraising insights and peer reviews.

Please see important disclosures at the end of the article

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