There is perhaps no area of financial management that is more complex and challenging than the investment of the institution’s long-term assets. Contributing factors to these complexities can include among other things market volatility, investment styles, manger selection challenges and alternative investments choices.
In most nonprofit organizations endowment or quasi-endowment fund, makes up
the bulk of the institution’s long-term investments. The governing board and the
institution’s management should a have a long-term vision of their efforts to secure
endowment funds. The primary advantage of an endowment is that it provides
dependable revenue and permits long-range planning for college or university.

This week’s discussion paper will focus on long-term investments and in
particular the institution’s endowment fund. Your paper should address all three of the following questions about endowment management.
1. Why should the institution take a long-term view of the future when setting
investment policies?
2. Discuss the concept of asset allocation and tell why it is important to the future of
the endowment.
3. Why is the institution’s endowment spending policy important to both the
operating budget and the long-term value of the endowment?