August 31, 2006 | Read Time: 1 minute
Endowment investments at nonprofit health-care organizations grew by 6.3 percent in 2005 — slower growth than in past years and a mirror of how the stock market has been faring, according to a new study by the Commonfund Institute.
Last year’s returns were down from an average of 8.2 percent in 2004 and 14.1 percent in 2003.
In response to the slowdown in stock prices, health-care organizations began shifting more of their endowments into alternative investments like hedge funds and commodities, the study found.
That trend will continue this year, according to the institute. Twice as many organizations reported that they intend to reduce investments in domestic stocks as said they will increase them. More than one-quarter plan to put more money into alternative types of holdings, while only 1 percent said they plan to cut back on those investments.
The Commonfund Institute is the research arm of Commonfund, a company in Wilton, Conn., that manages approximately $38-billion in assets for more than 1,600 nonprofit organizations. The health-care report is based on data from 202 organizations with $106- billion in operating funds.
Nonprofit organizations can obtain free copies of the “Commonfund Benchmarks Study Healthcare Report 2006″ by sending an e-mail message to the institute’s executive director, John S. Griswold Jr., at jgriswol@cfund.org. Copies cost $250 apiece for other organizations and individuals not affiliated with a nonprofit group.
