Foundations Shored Up Endowments in 2024. Nonprofits Need the Funding.

(Illustration by Elias Stein)

Endowments of foundations turned in double-digit returns for the second year in a row in 2024, notes a new report, posting an average calendar-year return of 10.3%, net of fees.

The report by the Council on Foundations and asset manager Commonfund studied endowments with combined assets of $104.9 billion, including private foundations such as the Helmsley Charitable Trust ($7.3 billion) and community foundations such as the Boston Foundation ($1.9 billion). The results, while good, lagged behind private foundations’ 2023 average of 12.6% and community foundations’ 14.1%, helping counter losses for both in 2022.

Created with Highcharts 9.0.1Alternate RoutesPrivate and community foundations differ in how they allocate endowment funds for​investment. Source: Council on Foundations’ Commonfund Study of Investments of Endowments for Private​and Community Endowments

Created with Highcharts 9.0.1Private FoundationsCommunity FoundationsU.S. StocksFixed IncomeNon-U.S. StocksAlternative StrategiesShort-Term Securities, Cash0%1020304050

“It’s always compelling to speak about the one year, but if you’re a perpetual institution, you care about the 10-, 15-, 20-, 25-year returns….That’s going to better illuminate if you’re being a responsible steward of those funds,” says George Suttles, executive director of the Commonfund Institute.

Created with Highcharts 9.0.1Investing for PerpetuityFoundations have long time horizons and require significant returns over many years to​fulfill their missions. Source: Council on Foundations’ Commonfund Study of Investments of Endowments for Private​and Community Endowments

Created with Highcharts 9.0.1Private FoundationsCommunity Foundations1-Year3-Year5-Year10-Year15-Year20-Year0%51015

Foundations are under pressure to provide more support to nonprofits that have lost federal funding and grants. In 2024, private foundations’ “policy spend rate” was 5.2%; community charities spent 4.6%. To sustain that requires annual returns of 7.7% for private and 7.1% for community foundations, which roughly a third of foundations met or exceeded. To get those results, private foundations allocated 45% of assets, on average, to alternative strategies. Community foundations put 38% into U.S. stocks and 25% in alternatives.

Write to Abby Schultz at abby.schultz@barrons.com

Last Week

Markets

As the week began, Japanese stocks hit a high after Prime Minister Shigeru Ishiba resigned, and gold broke $3,600 an ounce as the dollar weakened. The Bureau of Labor Statistics revised payrolls down by 911,000 for 12 months through March, and August inflation rose to 2.9%. But stock indexes, focused on rate cuts, set new highs. On the week, the Dow industrials broke 46,000 for the first time, and were up 1%. The S&P 500 rose 1.6%, and the Nasdaq Composite, 2%.

Companies

Apple’s new iPhone 17 lineup includes its thinnest phone ever. EchoStar agreed to sell spectrum to SpaceX for $17 billion, including $8.5 billion in SpaceX stock. The S&P 500 added AppLovin, Robinhood Markets, and Emcor Group, replacing MarketAxess Holdings, Caesars Entertainment, and Enphase Energy. Oracle reported a surging artificial-intelligence backlog, fueled by a $300 billion OpenAI deal. Microsoft and OpenAI came to a tentative agreement on continuing their partnership.

Deals

PNC Financial Services agreed to buy Colorado’s FirstBank for $4.1 billion…Buy-now, pay-later vendor Klarna Group saw shares rise 30% on its debut… Anglo American and Canada’s Teck Resources agreed to merge, forming a $53 billion copper-mining giant…The Murdoch family settled its inheritance dispute. Lachlan Murdoch will take control of media assets, including Barron’s owner News Corp…The Wall Street Journal said Paramount Skydance is preparing a bid for Warner Bros. Discovery.

Next Week

Tuesday 9/16

The Census Bureau reports retail sales data for August. Consensus estimate is for a 0.2% month-over-month increase, following a 0.5% gain in July. Excluding autos, sales are expected to rise 0.4%, compared with 0.3% previously.

Wednesday 9/17

The Federal Open Market Committee releases its monetary-policy decision as well as its quarterly Summary of Economic Projections, or SEP. The central bank is widely expected to cut the federal-funds rate by a quarter of a percentage point, to 4%-4.25%. Despite inflation running about a full percentage point above the Fed’s 2% target, a weakening labor market has become the greater concern, as signaled by Federal Reserve Chair Jerome Powell in his speech at Jackson Hole, Wyo. in late August. Jobs growth was an anemic 29,000 a month on average for the past three months. Compounding the issue, the Bureau of Labor Statistics this past week significantly revised lower employment data for the 12 months ended in March 2025, suggesting that the labor market was much weaker than previously thought, even before the summer slump in hiring. In the FOMC’s June SEP, the median projection was for two quarter-point rate cuts by the end of 2025, but traders are pricing in an 85% probability of three cuts for the rest of the year.

The Numbers

54%

Percentage of Americans who say they view capitalism favorably, a decline from 60% in 2021.

24%

Decline in the futures price of lumber to $527 per thousand board feet after a three-year high in August.

9.5%

The expected rise in employer-provided health insurance in 2026, according to Aon, highest since 2011.

$84 K

U.S. inflation-adjusted median income in 2024, about the same as the 2023 Census Bureau estimate.

Write to Robert Teitelman at bob.teitelman@dowjones.com