CNJG Forum Explores Foundation Investment Strategies to Protect the Nest Egg

October 15, 2014


DEFINITION of “Nest Egg:” nestegg “A substantial sum of money that has been saved or invested for a specific purpose. A nest egg is generally earmarked for longer-term objectives … . “Nest egg” has been used to refer to savings since the late 17th century. The term is believed to have been derived from poultry farmers’ tactic of placing eggs — both real and fake —in hens’ nests to induce them to lay more eggs, which meant more income for these farmers.” — from the website Investopedia

When most in the nonprofit world think of foundations they are focused on the grants, the program areas, the criteria, and perhaps the donor’s intent. What makes those grants possible though is the corpus that the foundation manages — the nest egg. The same is true for those charities that enjoy the income that comes from an endowment.

In 2008, sadly, we saw the value of endowments plummet as the stock market crashed.  There was one estimate that foundation assets in Morris County, New Jersey alone lost a half a BILLON dollars. When the assets of foundations and endowed charities tumble like that the ripple effect across the entire social sector feels more like a tsunami.

Perhaps 2008 was a “black swan” event but it certainly won’t be the last time the market fluctuates in a big way. For those foundation and nonprofit leaders responsible for being good stewards of the endowment, staying on top of the investments goes with the territory. Whether the corpus is large or small, you want to ensure it will be well managed. And after all, the more it grows the more money will be available to pursue the mission. But there are so many considerations.

Nonprofits with endowments must determine the appropriate spending policy in an ever-changing funding environment.

Alternative investments such as hedge funds, managed futures, private equity and others seem to be growing in design and popularity but how does a good steward know what to look for and works best for their organization? An investment committee must determine policy and then put it into good practice while at the same time managing the money managers well. How do mission-focused organizations consider mission-related investments?

Managing the corpus is clearly a very serious undertaking. It can cause some sleepless nights…but it doesn’t have to.

Next month, the Council of New Jersey Grantmakers will present its first-ever Investment Forum for Foundations and Endowments, featuring more than 10 different sessions covering these topics and more. The Investment Forum has been designed to meet the needs and interests of not only the CEO, CFO and investment committee members, but also those in foundation and non-profit leadership positions looking to gain deeper insight into state of the art strategies for managing your corpus.

The day begins with an opening keynote by Brian O’Neil, chief investment officer at the Robert Wood Johnson Foundation. Whether your corpus is $5 Million, $500 Million, or $5 Billion you’ll want to hear Brian’s insights on Oversight of Your Investment Portfolio: What You Have to Get Right.

Throughout the day, investment professionals from JPMorgan, Goldman Sachs, PNC, Glenmede, Neuberger Berman, TD Bank, and many other leaders in the investment world will share their expertise and experience on such topics as Managing Your Manager, Active vs. Passive Investing, Constructing an Alternative Investment Portfolio, Opportunities in Fixed Income and more.

The day wraps up with a truly unique experience — a conversation with philanthropist investors Les Quick and Peter Simon, moderated by Feather O’Connor Houston, formerly the head of the William Penn Foundation.

The Early Bird Discount has been extended for one week, to October 17th. And a number of CNJG members are offering to underwrite some of the registration costs for grantees who would like to attend. Good stewardship of the nest egg is certainly one thing all foundations and endowed nonprofits must get absolutely right.

Nina Stack is President of the Council of New Jersey Grantmakers, the statewide association of more than 120 funding organizations working in New Jersey. She also serves as a Board Member of the Forum of Regional Associations of Grantmakers, a 34-member network serving more than 4,000 foundations, corporations and other donors across the country.