John Griffith, Hirtle Callaghan's Endowment Risk Specialist, attended the annual meeting of the Association of Independent Colleges and Universities of Pennsylvania (AICUP) on June 11th in Hershey, PA. At the meeting John chaired a panel of college CFOs discussing the alternative models of managing the endowments (outsourced, in house and consultant). The panel focused on governance and the increasingly difficult task of managing an endowment within the Trustee schedule of 3 or 4 meetings per year. Even in the best scenario with additional meetings and strong Trustees, investment opportunities are missed and meetings often get bogged down in the details, leaving little time for boards to think and act strategically.
The panel concluded that Trustee Risk may be one of the largest risks to endowment management. From the panel's perspective, outsourcing was identified as the optimal solution as this structure strengthens the Trustee's ability to focus on the long-term strategic priorities of an institution.