In light of COVID-19, NEPC, LLC conducted a flash poll of Endowments and Foundations to examine how these organizations are shifting their strategies amid the pandemic.
The results show:
- The majority (55%) of endowments and foundations expect a severe recession similar to that of 2008. Forty-one percent of total respondents are more optimistic and expect a short, sharp COVID-19-driven recession followed by a strong recovery.
- The majority (61%) of organizations are rebalancing their portfolios in response to recent market moves, with 14% working to raise additional cash and 13% reducing their overall risk exposure. Only seven percent of all respondents indicated they are taking no action at all.
- The majority (61%) of respondents are also taking immediate action to reduce their costs, expenses, and spending rate to protect the corpus. Education foundations, in particular, are working to reduce their costs and expenses. Fifty-seven percent of these respondents indicated they are currently reducing their costs, most likely in an effort to reposition themselves for a more volatile future. This compares to the 11% of organizations that are increasing their spending rate to further support ongoing operations.