A phenomenon with far-reaching effects on nonprofit investment management and governance has become a little-noticed yet powerful force in boardrooms over the past decade. Despite its wide-ranging implications, this development has largely gone undocumented. This paper seeks to draw attention to this change and its implications, and to trace a…

College endowments have beaten the market so consistently in recent years, it is not surprising that individuals would like to take advantage of that institutional wisdom to invest their own money. Increasingly, many are. A small but growing number of universities are trying to entice donors to invest their trusts alongside college endowments,…

Several colleges and universities lost millions in the alleged $50-billion Ponzi scheme run by the Wall Street trader Bernard L. Madoff. The losses include institutions' endowment holdings in hedge funds that were invested with Madoff as well as hits taken by supporting foundations and donors. Several foundations that have been active in higher…

Managers of university endowment funds are paying closer attention to investing in "green" industries, commonly bundled under the umbrella "cleantech." Cleantech offers the possibility of buying in while prices are low "and" making a "green" investment play, but it also harbors the risks inherent in any emerging industry. Cleantech has varying…

When Commonfund and the National Association of College and University Business Officers (NACUBO) announced in late 2008 that they would join forces to combine their two endowment studies, which had historically been fielded and reported separately, they had high hopes for the venture, but those hopes were tempered with caution. The financial…

This article reports that as many as five colleges or charitable foundations whose endowments have suffered significant investment losses or were unable to access money in their accounts in recent months are considering legal action against their brokers or investment managers, alleging misrepresentation of risk or mismanagement. Jacob H.…

This article explores the law relating to the global custodianship of funds, notably as managed for endowed charities such as universities and independent schools. Is global custody based on the legal concept of bailment or of trusts? Just how secure are the legal underpinnings of this financial mechanism? The conclusions are that the legal…

The legal terrain regarding institutions' rights for use of major charitable gifts has clarified somewhat in recent months. While this may encourage institutional fundraisers, it is also clear that extreme care still must be taken about the acceptance and terms set for use of transformational gifts. As recent lawsuits demonstrate, careful planning…

This third and final volume of the 2007-08 edition of "Trends" focuses on the resources that Canadian universities have to support their teaching and research activities. The volume begins by comparing the combined funding for teaching and research in Canadian universities with higher education funding in some of its most important…

Recently, spending and fees at colleges and universities have been rising faster than family incomes. If this trend persists, increasing emphasis will be placed on endowments as a source of finance. This paper examines financial planning when growth rates for the sources and uses of funds differ. First, we examine concepts of "intergenerational…

As tuitions continue to rise, Congress is looking for ways to mitigate the costs of college attendance for students and their families. Legislators are giving particular scrutiny to how colleges spend money from their endowments, which have grown significantly over the past decade. Some lawmakers have proposed that institutions with endowments of…

The stock-market crash of 1987 and its effect on college endowment funds are discussed. An informal survey found the market value of nine college endowments had slipped over the past year. The experiences of several colleges and universities are described. (MLW)

Hedge funds are the rock stars of today's financial world. These slightly regulated pools of equity, which are open only to rich players, are managed through secretive and sophisticated investment strategies. Although the risks are high, so are the potential benefits. Despite the risks, many colleges and universities have chosen to invest heavily…

In 1969, in a report to The Ford Foundation entitled "The Law and the Lore of Endowment Funds," William L. Cary and Craig B. Bright summarized the results of an extensive survey of the law governing college and university endowment funds. The key conclusion of the report is that "there is no substantial authority under existing law…

This paper chronicles the life of George Peabody, intermingled with anecdotes on how the researchers gathered data in their studies. A brief overview of Peabody's life introduces the paper with a personal narrative of how the authors' search for details on his life began. Both researchers had affiliations with educational institutions resulting…