September 19, 2002 | Read Time: 1 minute
For the first time since 1994, community foundations lost money on their investments last year, largely because of declines in stock prices, according to a study by the Council on Foundations.
The median return on investment for 2001 was minus 3.9 percent, meaning that half of the foundations surveyed fared worse and half better than that figure.
Despite the decline in the stock market’s value, community foundations continued to invest almost two-thirds of their assets in stocks, according to the report.
The report is based on a survey of 157 community foundations with assets of $5-million or more.
At the end of 2001, the foundations had $17.1-billion in assets under management by professional advisers who worked either for outside investment companies or for the foundations. Another $4.1-billion in assets were excluded from the study because they were held in money-market accounts, short-term investments, or closely held stock.
The study found that in 2001, community funds invested 63.8 percent of their assets in stocks, 29.4 percent in bonds, 3.4 percent in cash, and 3.4 percent in alternative investments, such as hedge funds. Those figures were similar to data in the 2000 report.
The report, “2001 Investment Performance and Practices of Community Foundations,” is available on CD-ROM for $10 for members and $30 for nonmembers. Printed copies are $50 for Council on Foundations members and $140 for nonmembers. To order, contact the Publications Department, Council on Foundations, P.O. Box 98293, Washington, D.C. 20090; (888) 239-5221; http://www.cof.org.
