Small logo Subscribe to leading news on impact investing. Learn More
The Brief Originals Dealflow Signals The Impact Alpha Impact Voices Podcasts Agents of Impact Open
What's Next Capital on the Frontier Measure Better Investing in Racial Equity Beyond Trade-offs Impact en las Americas New Revivalists
Local and Inclusive Climate Finance Catalytic Capital Frontier Finance Best Practices Geographies
Slack Agent of Impact Calls Events Contribute
The Archive ImpactSpace The Accelerator Selection Tool Network Map
About Us FAQ Calendar Pricing and Payment Policy Privacy Policy Terms of Service Agreement Contact Us
Locavesting Entrepreneurship Gender Smart Return on Inclusion Good Jobs Creative economy Opportunity Zones Investing in place Housing New Schooled Well Being People on the Move Faith and investing Inclusive Fintech
Clean Energy Farmer Finance Soil Wealth Conservation Finance Financing Fish
Innovative Finance
Personal Finance Impact Management
Africa Asia Europe Latin America Middle East Oceania/Australia China Canada India United Kingdom United States
Subscribe Log In

‘Warren Buffett has some excellent advice for foundations that they probably won’t take’

Warren Buffett’s advice to stick with low-cost index funds rather than high-fee money managers makes sense for philanthropies as well.

“America’s foundations are taking money that could be devoted to their programs — to alleviate global poverty, to improve education, to support medical research or promote the arts — and transferring it to wealthy asset managers,” writes journalist Marc Gunther, formerly with Fortune and the Guardian.

Many foundations pay investment officers seven-figure salaries but don’t disclose their investment performance (notable exceptions are the MacArthur and Kellogg foundations).

Lower fees and higher returns on the $800 billion locked up in foundation endowments could free capital for actual impact.

Based on limited information available, it looks like Vanguard’s index funds beat the average 10-year returns of foundation money managers by between 0.3 and 1.1 percent.

This post originally appeared in ImpactAlpha’s daily newsletter. Get The Brief.

Photo credit: AP Images

You might also like...