We are pleased to share this ClearView Fiduciary Alliance update as we continue to pursue ClearView’s mission of “Helping Foundation, Endowment and Nonprofit Boards Make More Informed Investment Decisions.”
- Continued Growth - Membership continues to expand, with one new organization joining ClearView each month, on average. Although three of our smallest members were unable to renew in recent months (due to pandemic-related budgetary pressures), overall membership now stands at 71, an increase of 16 members since the pandemic began. With additional organizations expressing interest, we anticipate continued membership growth. Member organizations now stretch from New York to Florida – a total of ten states plus the District of Columbia – representing over $3.1B in total assets. The ClearView Member roster (here) includes organizations with portfolios that range in size from $1M to $400M.
- ClearView Peer Portal - The peer universe against which ClearView members can benchmark their returns has also continued to expand. Our benchmarking includes both the ClearView Member Universe and the much larger Investment Metrics Universe of Endowments and Foundations, which now includes performance details on up to 1,175 portfolios each quarter. Combined ClearView and Investment Metrics data allows ClearView to provide what we believe to be the country’s most extensive peer analysis for foundations, endowments and nonprofit organizations.
- Assistance with Investment Adviser Selection - In response to member requests for hands-on assistance in searching for and selecting a new investment adviser, ClearView launched its “RFP Consulting” practice in mid-2017. Since that time, ClearView has assisted 36 member organizations with their selection process. The ClearView RFP process is designed to be comprehensive, yet efficient for member staff and committees.
- Pandemic Response - As with many organizations, ClearView evolved rapidly in response to the constraints imposed by Covid-19. With the help of Zoom and other technologies, our work continued without interruption and membership continued to expand. In March of this year we successfully hosted our Annual Members Meeting “virtually” for the first time and provided a market overview, remarks on member peer analysis, and a review of recent ClearView studies and future research plans. We hope to return to an in-person annual meeting format in
2022. In addition, ClearView undertook specific research efforts in response to Covid:
- Covid-19 Response Survey - Given the dramatic market decline in March last year, ClearView surveyed members to better understand organizational responses to Covid’s impact on investment portfolios and to gauge the frequency and value of adviser communications during the early stages of the pandemic. Results of the Survey indicated that most ClearView members were staying the course in terms of adherence to their long-term investment strategies, with some members making only moderate adjustments to asset allocations.
- Spending During Market Declines - It is not unusual for the value of endowments to decline significantly when markets are turbulent – often below their original values. Fiduciaries grapple with the question of whether and how much to spend from endowments in such periods, particularly when they are subject to restrictions imposed by donors. Our Insights publication, “UPMIFA and its Impact on Spending in Times of Market Decline,” was released in April of last year and provided timely insight on Board and Committee responses during the market decline. We detailed the challenge of addressing “underwater” endowments when markets are volatile, including suggested steps and alternatives for consideration by fiduciaries.
- Fixed Income Alternatives - With Federal stimulus at unprecedented levels in support of the capital markets and the broader economy, yields on fixed income instruments dropped to historic lows. As many institutional investors have evolved their portfolios in response to the low-yielding fixed income environment, ClearView’s research has noted both increasing equity allocations and renewed attention to “alternative” investments.
- Upcoming Research - During the next few months, ClearView will continue research in several areas that are essential for effective committee governance. Research areas will likely include:
- 2021 Study of Investment Fees – ClearView conducted its first study of investment fees in 2019 in order to help members better understand investment fee levels for foundations, endowments and nonprofits, the structure of those fees, and the factors that had the greatest impact on fees. The discretionary adviser environment has continued to evolve, and our 2021 Study of Investment Fees (currently underway) will update the 2019 findings, with emphasis on changes in fee levels and fee structures, and the factors that most influence fees. The current study is structured around two surveys, one completed by the foundation, endowment or nonprofit, and a separate (more detailed) survey for those organizations’ investment advisers.
- Lessons from Adviser Selection – With 36 RFP processes complete and more underway for ClearView members, we have developed a deep understanding of the committee and candidate dynamics that most influence the outcome of such processes. We aim to distill this knowledge into an educational whitepaper or webinar for our members.
- Efficacy of Alternative Investments – We have continued to explore the extent to which “alternative investments” can play an effective role in institutional portfolios with long- term investment horizons. Though we have periodically shared various findings from this ongoing research with our members, we plan to consolidate many of these observations into a whitepaper in the coming months.
- Diversity, Equity and Inclusion – Ensuring more diverse, equitable and inclusive investment practices is a growing concern for many foundations, endowments and nonprofits. We shared observations from our research on this topic with ClearView members in our 2021 Annual Member meeting and are planning a whitepaper that will shed light on current best practices in this area and the many challenges that still remain.
- Tools for Effective Committees – The challenge of properly governing long-term investments under a committee structure that involves rotating committee members has long been recognized as an impediment to optimal investment performance. Our paper in this area will explore best-practices that investment committees have adopted to ensure a long-term perspective that controls for the risks inherent in committee governance.
- Technology – ClearView continues to focus on innovation and automation to better serve our members:
- Updated Website – After an extensive review and redesign effort, ClearView’s updated website launched last year. The new site provides a format that is more accessible and intuitive as well as more representative of the expanding menu of services that ClearView provides its members. We welcome your comments and encourage you to visit the site here.
- Peer Portal Update – By the end of this month, the ClearView Peer Portal will have been enhanced with an improved format and better technology that will allow us to further expand the Portal’s functionality for members.
- The ClearView Team – Following the addition of David Phillips to the ClearView team in 2018, John Rogers joined ClearView in 2020. David previously served as EVP/CFO of The Conservation Fund and CFO of The Mortgage Bankers Association. John was previously EVP/CFO of The Urban Institute and earlier served as a U.S. Foreign Service Officer. David and John work as “member consultants” and have brought a wealth of practical experience to ClearView. Larry Coats continues as the firm’s CEO and Julie McGlothlin, who worked with Larry for many years in institutional money management, continues to ably serve as ClearView’s “member services coordinator.”
As always, we thank you for your participation in the ClearView Fiduciary Alliance as we work to help foundation, endowment and not-for-profit Boards and Executives make more informed investment decisions. Please feel free to contact us with any questions or comments using the contact information below.
Larry D. Coats, Jr.
Julie R. McGlothlin
David Phillips, Jr.
John R. Rogers, III