Improving the Endowment Model | Russell Investments

Endowment model: How non-profits can improve upon the endowment model—and make it work for them

Are you able to implement the model efficiently yourself? Read this paper to identify where additional resources would be beneficial.

By Mary Beth Lato, CFA

The endowment model has been celebrated, maligned and examined intensely over the past four decades. Popularized by Yale University, the model is often characterized by a low allocation to core fixed income and high allocations to hedge funds and private capital. However, there's more to the model than that.

This Russell Investments Viewpoint discusses:

Recent experience and outlook of the endowment model
Five elements to drive returns in a risk-aware manner
Three key strategic decisions that drive your strategic asset allocation (SAA)
Portfolio construction – bringing your SAA to life
Dynamic portfolio management
Constructing the private capital allocation, including four recommendations on a service provider
Key to improving the endowment model and helping it remain relevant

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Also of interest...

Understanding the impact of the spending policy

A useful framework for non-profit fiduciaries to help support the needs of their communities for generations to come.
Should inflation risk management
be your goal?

Inflation has led to short-term challenges to achieve higher returns. Will this be the case for the long term? Read this paper for a historical perspective.
What role can private markets play in a total portfolio strategy?

We believe that successfully navigating the complexity of private markets demands risk management at the total portfolio level.

Visit our dedicated non-profit section for additional resources