ThinkAdvisor published on the Endowments and Foundations flash poll results. View the piece here.
As the coronavirus pandemic wreaks havoc across the global economy, 55% of U.S. endowments and foundations expect a recession as severe as the one in 2008, the investment consulting firm NEPC reported Thursday.
Forty-one percent of these organizations expect a short, sharp COVID-19-driven recession followed by a strong recovery.
Nuveen’s chief equity strategist Robert Doll wrote this week that he expects the recession to be severe and rapid, with 2020 GDP growth of -3%.
NEPC’s endowments and foundations practice group conducted an online flash poll in March amid the COVID-19 outbreak among 105 respondents across education endowments and community, family, private and public charity foundations.
Sixty-one percent of respondents reported that they were rebalancing their portfolios in response to recent market moves. Fourteen percent said they were working to raise additional cash, 13% were reducing their overall risk exposure and 5% were lowering their private market exposure.
Just 7% of respondents said they were not taking any action.
Three in five endowments and foundations in the flash poll reported that they were in the midst of reducing their costs, expenses and spending rate in order to protect their corpus.
Sixteen percent of respondents said they were tapping credit facilities to help address near-term capital needs, and 12% were redirecting grants to help address coronavirus challenges, including more than a quarter of private and community foundations.
At the same time, 11% of organizations in the flash poll said they were increasing spending rate to further support ongoing operations.
“Our survey highlights a slight disconnect between endowments’ and foundations’ recession outlook and what the market has been experiencing the past two months,” Kristin Reynolds, a partner and co-leader of NEPC’s endowment and foundation practice, said in a statement. “The results also mimic what we’ve been hearing from our clients—that all options are on the table.”