Posted by on Dec 1, 2018 in Articles & Advice |

Image Credit: Jan Steen, “The Little Alms Collector” (ca. 1663-1665), Petit Palais Musee des Beaux-Arts de la Ville de Paris



By Jason Zweig | November 28, 2018


Charitable giving is on a lot of people’s minds this time of year. It’s worth noting that while many nonprofits promote great causes, few are great at managing money.

new research paper looks at the investment returns of a huge sample of nonprofits and finds they’ve been abysmal. From 2009 through 2016, these endowment funds returned an arithmetic average of 6.7% annually, compared with arithmetic averages of 12.2% for U.S. stocks, 10.5% for a 60/40 mix of stocks and bonds, and 8% for U.S. Treasurys, as calculated by the paper’s authors....



To read the rest of the article:


Note: This article required a clarification after it was published:

An earlier version of this article cited data in the second paragraph that was based on a simple average of annual returns, not a steady growth rate over time as is often used by investors. Measures of simple average annual returns cited for U.S. stocks, long-term U.S. Treasury bonds and a 60/40 mix of the two were compiled by the paper’s authors. The earlier version of this article didn’t specify this information.


For further reading:


Benjamin Graham, The Intelligent Investor

Jason Zweig, The Devil’s Financial Dictionary

Jason Zweig, Your Money and Your Brain

Jason Zweig, The Little Book of Safe Money

Articles and other research:

Smart Money Takes a Dive on Alternative Assets

Can We Be Brutally Honest About Investment Returns?