International Giving By U.S. Foundations Down 4%
International giving by U.S. foundations in 2009 declined from the
record level posted in 2008, but at a slower rate than the decline in
domestic giving, according to a new report.
According to the International Grantmaking Update: A Snapshot of U.S. Foundation Trends, a new report prepared by the Foundation Center and the Council on Foundations, giving by U.S. foundations for international causes held nearly steady last year-to the surprise of many-generating $6.7 billion, down 4%. That's less than half the 8.4% estimated decline in foundation giving overall for 2009.
The news is encouraging, especially when compared to the significant growth in international giving experienced before the recession, between 2006 and 2008, when international grant dollars grew faster than overall funding among sampled foundations (49% versus 21%), according to the report.
Foundation Center President Bradford K. Smith noted, "Contrary to some fears, foundations did not abandon international grant making during the economic crisis. These findings demonstrate their firm commitment to addressing global issues." It is likely that international grant making will maintain and possibly increase its share of overall foundation grant dollars in the future, according to the report.
The report, which tracks giving for both U.S.-based international programs and overseas recipients-the former received about two-thirds of international grant dollars awarded by sampled foundations, while the latter received the roughly one-third of remaining dollars-is the latest update of the Foundation Center's series on international grant making. The update examines changes in overall giving by private and community foundations through 2009 based on a survey of leading funders.
These top funders include The Bill & Melinda Gates Foundation, which awarded over $2.7 billion, accounting for more than two out of five international dollars in the center's 2008 grants sample. Yet international giving by other foundations in the sample grew even faster between 2006 and 2008 than did funding by the Gates Foundation (62% versus 39%).
As for where the charitable dollars were directed, health care (39%) captured the largest share of international support in 2008, followed by international development (21%) and the environment (17%). The report provides not only an analysis of patterns of U.S.-based international giving in 2008, and changes in funding priorities between 2006 and 2008, but information on international giving by foundations based outside of the United States. For information about the report and how to download it at no charge, go to the "Gain Knowledge" area of the Foundation Center's Web site at foundationcenter.org or call 212-620-4230.
In other news ...
Only 39% of the nation's leading private company CEOs voiced optimism about U.S. economic growth over the next 12 months-a figure down from the previous quarter's 45% and four points below a year ago-according to PricewaterhouseCoopers' recent Private Company Trendsetter Barometer survey. However, 45% of companies with international operations were optimistic about U.S. economic growth, markedly more so than their domestic-only peers (35%). For more information go to www.pwc.com.
Rothe Financial Group of Vienna, Va., has created the Praxis Fund to enable clients to invest in the stock market in a manner similar to that utilized by large pensions and institutions. The fund uses the "spoke fund" concept, in which accounts are collectively managed but separately held, thus providing the diversification of mutual funds with enhanced transparency and the flexibility necessary to quickly move into safe haven investments during times of market uncertainty, according to Praxis Fund manager and firm CEO John Rothe.
Despite the economic crisis of the past two years, only one in five U.S. adults say they have changed their investment strategy recently, compared to a few years ago, according to a new 24/7 Wall St./Harris Poll survey. While 17% state they have shifted toward more conservative or stable investments, just 4% report they have moved toward more aggressive or volatile investments. Further information is available at the Harris Interactive Web site at www.harrisinteractive.com.
Which is the greater macroeconomic risk facing the world's developed economy: inflation or deflation? To shed light on issue, Credit Suisse has released a new white paper entitled, How Commodities Can Help Investors Face the Uncertainty of the Inflation/Deflation Debate. The paper argues the case for the incorporation of commodities into an overall portfolio allocation as a hedge against inflation-especially the unexpected variety. To obtain a copy of the report, send an e-mail to [email protected] or go to www.credit-suisse.com.
Early estimates indicate the Dow Jones Credit Suisse Hedge Fund Index ("Broad Index") pulled back in November, posting slightly negative performance of 0.28% for the month (based on 79% of assets in the index reporting). Five out of the ten sectors in the index generated positive performance for the month and the industry is up an estimated 7.72% for the year, according to the report. For more information and the final hedge fund figures for November go to www.hedgeindex.com.
The Milliman 100 Pension Funding Index experienced asset decreases of $8 billion and liability increases of $14 billion, resulting in a $22 billion decrease in pension funded status for the month of November. The past month's decline in funded status follows two months of improvement, and leaves the pension funding deficit at $335 billion, according to this latest index prepared by Milliman Inc., a global consulting and actuarial firm based in Seattle.
Yorkville Advisors LLC, an alternative investment manager based in Jersey City, N.J., this week announced its record deal flow for Standby Equity Distribution Agreements (SEDA), noting that the firm has surpassed the 34 SEDAs it closed globally in 2009 and recently closed its 38th SEDA transaction of 2010. Yorkville founder and President Mark Angelo said, "The number of deals, the range of industry sectors and the diverse geographic location underscore how SEDAs are breaking through to become a mainstream product after building a successful track record over the last decade."
Morningstar Inc. has released its latest report regarding estimated U.S. mutual fund and exchange-traded fund asset flows through November. After contributing $26.8 billion to long-term mutual funds in October, investors added just $2.7 billion in November. While the pattern of outflows for U.S. stock funds continued, investors also lost enthusiasm for fixed-income funds. Money market funds were the direct beneficiaries with inflows of $24.7 billion, their best month since January 2009. U.S. ETFs saw inflows of $10.3 billion in November, pushing year-to-date inflows to $95.6 billion and total industry assets to $951.5 billion. For the complete report go to www.global.morningstar.com/novflows10.
Compensation budgets are likely to remain intact for 2011, and few companies anticipate having to take drastic actions such as pay freezes or pay cuts to reduce costs, according to a new survey from Chicago-based Aon Hewitt, the human resource consulting and outsourcing business of Aon Corporation. In 2011, salary increases for salaried-exempt workers are expected to be 2.8%, up from 2.4% in 2010, and significantly higher than the record-low pay raises (1.8%) workers saw in 2009. For more information go to www.aonhewitt.com.
Assets in managed account programs overall grew by an 8.3% compound annual growth rate over the past 5.5 years, adding nearly $663 billion in assets, with projections that this industry's assets will total $3.59 trillion by year-end 2014, according to the report Cerulli Quantitative Update: Managed Accounts 2010 prepared by Cerulli Associates. While all managed account program segments saw net inflows in 2Q 2010, separate account consultant programs experienced the smallest inflows during this period. For information on how to obtain the report go to clients.cerulli.com.
Events
BNY Mellon Asset Management, the umbrella organization for BNY Mellon's affiliated investment management firms and global distribution companies, will be the primary sponsor of the 540-mile 2011 Biscay Challenge, a two-handed sailing race hosted by the Royal Southampton Yacht Club of Southhampton, England. The race is scheduled to begin June 18 from the Solent, just off the south coast of the U.K., to Hondarribia on the northern coast of Spain. For further information go to www.rsyc.org.uk/.
The NICSA East Coast Regional Meeting is scheduled for January 13 at the Hyatt Regency Boston; and NICSA's 29th Annual Conference & Exposition will be held February 13-16 at the Doral Golf Resort & Spa in Miami. For information go to www.nicsa.org.
The TD Ameritrade Institutional 2011 National Conference is scheduled for February 2-5 at the Manchester Grand Hyatt in San Diego. For information go to www.tdaconferences.com.
The 4th Annual Women's Private Equity Summit will be held March 3-4 at the Ritz-Carlton Half Moon Bay, Calif. GPs, LPs and advisors to the industry will be on hand to facilitate networking, fundraising and deal-making opportunities and increase access to hard-to-get information. For information visit www.womensprivateequitysummit.com or call 781-652-0900.
On The Move
Atlantic Trust, the private wealth management division of Invesco Ltd., announced that Jeffrey Jacobs has joined the Chicago office as a managing director and director of business development. Additionally, in Boston, Sid Nargundkar, CFA, has joined as a vice president and equity analyst for the firm's disciplined equity team, and Chris Flynn has joined as an associate vice president and associate relationship manager.
WSFS Financial Corporation, the parent company of WSFS Bank, today announced that David B. Reed and Kevin B. Harris have joined WSFS Investment Group, Inc. as financial advisors. WSFS Investment Group is a subsidiary of WSFS Bank, providing brokerage, retirement and insurance services to its clients through INVEST Financial Corporation.
Bainco International Investors, a wealth advisory firm in Wellesley, Mass., that serves high-net-worth individuals, families and trusts, has hired Jeffrey Mortimer, former senior vice president and CIO at Charles Schwab Investment Management, Inc., as a managing director.
Marcum LLP, the independent public accounting and advisory services firms, and Bernstein & Pinchuk LLP, one of the largest middle market, PCAOB-reviewed auditors in China, have merged their China practices to create Marcum Bernstein and Pinchuk LLP, effective January 1 and headquartered in Beijing. The new firm has offices there, as well as in Guangzhou, Hangzhou and Hong Kong, with coordinated services throughout the world.
Financial Risk Management, a hedge fund investment firm with offices in Europe, Asia, Australia, and North America, has hired George Yepes as managing director, head of North American business development, to manage and develop relationships with high-net-worth investors, institutional clients and others. Previously, Yyepes held executive positions at Gottex Fund Management and Man Investments. FRM manages over $9 billion in fund of hedge funds portfolios worldwide.
-Cort Smith