STUDY DESCRIPTION

ClearView Fiduciary Alliance is pleased to announce its 2021 comprehensive and confidential study of investment fees for foundations, endowments, and nonprofit organizations with investment portfolios totaling less than $500 million.

Background

In working with small and mid-size foundation, endowment and nonprofit Boards, Committees and Executives over the last seven years, many of the questions heard most frequently stem from the need for better understanding of investment fee structures and levels. We have attempted to address these questions by reviewing the available research but have observed that independent analysis on this topic is very limited.

Benchmarking the investment fees borne by foundations, endowments and nonprofit organizations has proven to be an ongoing challenge for their fiduciaries. This reflects a reality that the fees incurred by these organizations are influenced by a multitude of factors.

While opinions on this topic vary, we observe a consensus that some of the variables most influencing investment fees include:

Portfolio size ($)
Portfolio structure and implementation approach
Type of Investment Consultant/Adviser engaged
Level of discretion/responsibility given to the Investment Consultant/Adviser
Services and relationship support provided by the Investment Consultant/Adviser

The ClearView Fiduciary Alliance 2021 Study of Investment Fees for Foundations, Endowments and Nonprofits is designed to provide fiduciaries with a baseline understanding of the various structures and levels of investment fees for these organizations. We will attempt to analyze the extent to which the variables listed above are indeed reflected in the investment fees incurred.

Participation – “Open Invitation”

Though ClearView is a membership-based organization, participation in this study is available to all foundation, endowment or nonprofit organizations with investment assets of less than $500 million.

The first step in the study is a brief, confidential survey that is intended to obtain a broad base of data directly from foundations, endowments and nonprofit organizations. A companion survey will obtain detailed data on portfolio structure and fees directly from the investment consultants/advisers that serve those organizations.

Foundations, endowments and nonprofit organizations that have received this invitation are encouraged to:

Forward this invitation to the appropriate parties related to their Organization (Executives or Board/Committee members) and request completion and submission of the online survey. The survey is available here.
Authorize and direct your investment consultant/adviser to provide information to ClearView via a separate survey, which ClearView will issue to those firms.
Forward this invitation to other foundations, endowments and nonprofit organizations that you believe would benefit from participation.

Study Confidentiality/Participant Privacy

ClearView is committed to maintaining the confidentiality of the responses received from each participating organization AND to including ALL participating organizations in the distribution of the summary analysis and published results of the Study. Submissions by Study participants require organization and individual names and contact information to ensure the integrity of the Survey. This information reduces the possibility of accidental duplicate responses and ensures that individuals submitting information are appropriately affiliated with their respective organizations. Please note that:

ClearView will not share or disclose the identities or contact information of Survey respondent organizations or individuals with any third parties, for any reason.
ClearView will not share or disclose any specific responses provided by respondents to this Survey with any third parties, for any reason.

Study Objectives

To update the baseline information generated by our 2019 Fee Study on the structures and levels of investment fees incurred by foundations, endowments and nonprofit organizations with investments totaling less than $500 million.
To update the primary variables (and combinations thereof) that affect the investment fees incurred by these organizations.
To develop additional educational content in the form of a whitepaper and a webinar to assist fiduciaries in fulfilling their responsibilities regarding the fees that their organizations incur in overseeing, managing and implementing their investment portfolios.

Study Timeline

Phase 1 – Surveys (June – August 2021)
Develop Surveys
Issue “Open Invitation”
Release Surveys
Analyze Results
Phase 2 – Supplemental Analysis (September – October 2021)
Review Other Industry Sources for broader and historical context
Review Fee Structures of Recent RFP processes
Review Fee Structures of a Sampling of Respondents in greater detail
Conduct Interviews with a selection of Fiduciaries and Advisers
Phase 3 – Publish Results (November – December 2021)
Whitepaper
Webinar for All Survey Participants and their submitting Investment Consultants/Advisers

Expected Time and Information Needed to Complete the Survey

We expect that respondents representing endowments, foundations and nonprofit organizations will require 15-20 minutes to complete the Survey. Investment consultants/advisers will likely require 20-30 minutes to complete the more detailed companion Survey. Information that will be covered in the surveys includes:

Basic Portfolio Implementation Approach
Asset Allocation to Major Asset Classes – Equities, Fixed Income, Diversifying Investments and Cash
Percentage of portfolio assets that are invested in…
Passive Investments
Illiquid Investments
Proprietary Funds/Products of the Investment Consultant/Adviser
Investment Consultant/Adviser Relationship
“Consultative” versus “Discretionary” (Including areas of discretion)
Tenure of the Investment Consultant/Adviser relationship
Years since the organization conducted an RFP or search
Frequency of meetings with the Investment Consultant/Adviser
Services provided by the Investment Consultant/Adviser
Historical Performance
Portfolio versus benchmark returns
Portfolio risk metrics over trailing periods
Investment Fees and Expenses
Are fee disclosures believed to be “transparent”?
Fee components
Consulting/Advisory Services
Portfolio Implementation
Custodial Services
Other Services

About ClearView Fiduciary Alliance

The ClearView Fiduciary Alliance is a membership-based, research focused learning and teaching organization whose sole mission is “to help foundation, endowment and nonprofit fiduciaries make more informed decisions.” ClearView’s growing membership currently includes 68 foundations, endowments and nonprofit organizations representing over $3B in investment assets. To learn more about ClearView and the services provided to its members, please visit www.clearviewfiduciary.com or contact one of the ClearView leadership team members listed below:

Regards,

Larry D. Coats, Jr.
President and CEO
LCoats@ClearViewFiduciary.com

Julie McGlothlin
Member Services Coordinator
JMcGlothlin@ClearViewFiduciary.com

David K. Phillips, Jr. CPA
Member Consultant
DPhillips@ClearViewFiduciary.com

John R. Rogers, III
Member Consultant
JRogers@ClearViewFiduciary.com