Opinion: Cultural Organizations Left Themselves Open to Huge Endowment Losses

Major cultural institutions left themselves open to huge endowment losses by pursuing risky investment strategies before the recession, according to a commentary in Forbes.com.

James Panero, managing editor of The New Criterion, writes that money managers and organizations such as Commonfund encouraged arts organizations to move “away from the safety of fixed-income instruments … to the volatility of domestic and foreign equities and even to ‘alternative investments.’”

As a result, he writes, institutions such as the Metropolitan Museum of Art and New York’s City Opera lost 30 percent or more of their endowments when they could have limited losses to around 10 percent with more diversified investment strategies.