All right, it looks like we have a majority of folk from the waiting room that have joined. Good afternoon, colleagues. My name is Chase Moore. I'm the Director of District Relations here at CASE. Welcome to this afternoon's Together on Good Governance. I am really excited to have this conversation, and I have to admit, a little bit envious that a conversation like this didn't exist whenever I took leadership of the first foundation that I was responsible for. So absorb, learn, ask lots of questions. I want to say a big thank you to CASE's educational partner, Common Fund, for providing a lot of thought leadership this afternoon, and frankly, for giving so freely of their time to participate in this survey. I'd also like to acknowledge our friends from CASE District 1 who are sponsoring this together and who also opened it up across all of the U.S. and Canada so that we can have a more robust conversation, particularly our educational programming liaisons, Bobby Gondola, Rebecca Enriquez, and Jim Kenney, for their work in supporting member engagement from the cabinets. Again, a really big thank you to our moderator today, Monica DeLisa, who I've known for a number of years now as we once worked at respective institutions in the University System of Georgia, and she's now with an institution that I'll let her tell you about in District 1. Just a couple of housekeeping items. Towards the end of the conversation, I'll be dropping a few resources into the chat for you to either download or follow the hyperlink out to resources pertaining to this discussion. Also, if you've got burning questions, because we've got a number of people participating in this conversation, drop those into the chat. I'll be monitoring chat, and at certain times in the conversation, we'll try to get to and answer those questions. With that, thank you for carving out some time to participate in this really important conversation. Monica, over to you. Thank you, Chase. As Chase said, my name is Monica DeLisa, and I am the president and CEO of the University of Vermont Foundation. Just a little bit about us. We are in Burlington, Vermont. We are working on an endowment of a little over $800 million. We have about 80 employees. We are a separate foundation, but of course, closely linked and aligned with the University of Vermont in every way possible. I've been here for about two years, and prior to that was at the University of South Carolina. Then prior to that at Georgia College and State University, where I had the privilege to get to know Chase, and had some stops at the Texas A&M Foundation and the University of Arizona, where I began my career. I've noticed that many of you, like me, are career advancement development professionals. When I started my career as an administrative assistant to a development officer, I never dreamed that someday I'd be in a place where I'd be speaking reasonably intelligently to the world of investment performance and asset management, and working with boards on how we manage those and on good governance. In fact, I'd say I was probably 16 years into my career before I really understood our endowment beyond how much the spend rate was, and how much the endowment had grown in a given year, and how I had to communicate that to donors. So I'm really happy to be with all of you today as we explore some of those things and help you grow in your professional careers. This time, I'd like to introduce Anita and Paige from Common Fund, who are going to be providing the majority of this presentation and allow them to introduce themselves. Great. Thank you so much, Monica. And thank you to both CASE and in particular, Chase, for the opportunity to join you today for this discussion. On a little bit of a personal note, I'm particularly delighted to partner with Monica for this, since I happen to have a senior at UVM who's graduating this May. So it's a nice personal touchpoint for me. I actually spoke to him earlier today and I said, oh, I've got to go. I'm going to be talking with UVM. My name is Anita Harrington. I am the Head of Client Engagement for Common Fund's Outsourced Chief Investment Officer, or OCIO, platform that oversees our business development, our relationship management, and our RFP processes. I am joined today by my colleague, Paige Rabelais. She's a Managing Director and a member of Common Fund's OCIO business development team. She's responsible for the development of outsourced OCIO solutions across endowments, foundations, healthcare organizations, and other non-profits across the country. And then maybe taking a quick step back, Common Fund itself is an asset manager that many of you may not realize was formed by a grant from the Ford Foundation back in 1971. And our original mission was to enhance the financial resources of non-profits, like those of you who are joining today's discussion. Fifty-four years later, here we are. We continue to serve that mission by delivering exceptional performance, service, and insight. And today, with Monica, we're really going to be focusing on that last component, which is insight. Great. So, as Anita said, today we're going to be talking about those traits that really distinguish high-performing endowments from low-performing endowments. And I'll give you a little sneak peek. It's not all about asset management. It's really about governance. So, to get us started, Anita, Paige, and I wanted to ask a question that I think our case partners are going to put up right now as a poll, which is, what percentage of your current role is focused on governance or endowment management? So I'd invite you all to kind of jump into that poll. And as those answers come in, I want to ask Paige a question. We are talking about governance today, but your work as an Outsource Chief Investment Officer, OCIOs, is in the world of endowment management. Can you give us a quick definition of governance from your viewpoint and an overview of how it relates to endowment performance? Good question. Governance is more of a process. It's really how we manage the fundamentals, the tasks, and the teams that we work with on a day-to-day basis. So by nature, everyone on this call is part of an endowment, and an endowment is a perpetual pool. So we're all playing the long game, a very long game, like the forever long game. So I think of it as the tortoise and the hare, but we don't really want to go slow. It's that consistency that we really need. The consistency is what allows us to create durability over time and endure. Strong governance for us is essential because it can be your sword or your shield. What I mean by that is it can both guide the committee and the organization, and it can protect you with strong governance. For example, if the school has received a huge donation, and if there's a strategic plan and a vision that's already in place, that donation can actually be transformative. But if not, it could be a total opportunity loss. So there's a lot of downside examples, too. If we think about all the scary things that threaten both the endowment and really the community overall on a day-to-day basis, that can be everything from a breach in cybersecurity, a natural disaster, a headline risk, or frankly, even like an outspoken bully on your board who forces some bad decisions across the team. To me, what strong governance is, is it means that the board and the staff have the confidence and the consensus together in the long term to link arms, stand together, and not make what can be really expensive, impulsive decisions that allows the chaos to just reign. Importantly, and to the title of the conversation today, at Common Fund, we've found that organizations with strong governance tend to have stronger investment returns than in performance over time. So with the poll, as many of you probably saw, most of you are spending less than 25% of your time in this work. So we're really going to talk, get more into the governance. And as I always like to say, good governance equals good stewardship. If we have great governance, we can provide great stewardship to our donors and philanthropists. Anina, your assessment of the impact of governance on the endowment success really highlights the importance of that great governance. But is it possible to quantify what that means? Yeah, we think it is. And I would just comment, I love the fact that less than 25% of people on the call are involved in this kind of work today, but they really want to learn more. And that makes it a much more exciting conversation for us. But yeah, I believe, you know, we believe it is. You know, we actually, if you go back in time a little bit, in 2021, Common Fund actually conducted a study in partnership with Fund Governance Analytics. They included 34 institutions in that analysis. They were both public and private organizations with assets anywhere from kind of a low of $8.5 million up to $3.5 billion. So a pretty wide span of organizations that we surveyed. They intentionally focused that study during this time of duress. Remember, we were all at home, you know, kind of working from the Zoom environment through COVID and also through and kind of exploring, you know, kind of what happened when you look back at the financial, global financial crisis from 08 and 09. The study actually covered 27 different governance topics. And it really covered everything from the frequency of how often your board meets, what is your board composition, what is your board turnover, what's the level of staff participation and board assessment, just to kind of name a few of those categories that the study covered. Really what the outcome was of that is that we found the study really validated our own research and the comments that Paige made earlier is that, you know, top decile and quintile managers tend to follow best practices and governance. It really is a direct correlation. So, for example, one of the things that we found in the study is that higher performing boards also tend to be more diverse in their composition. And they also, interestingly, are smaller in size. And I think, interestingly enough for this audience, quintile performing boards often also have a higher number of staff participants, even if they're participating in a non-voting capacity, because there's a lot that you can bring from your day-to-day job and experience and exposure to what that board is not seeing in the same capacity. And over time, kind of how we quantified that, Monica, was that these institutions with that strong governance outperformed their peers by a range of about 25 to 35 basis points. So we do think it is measurable. That's amazing. So you were talking a lot about board composition and here at the University of Vermont Foundation, our board members serve three-year terms and they can be renewed once. And then, as with most organizations, they have an option then to sit out, but they can come back. So when you're fairly new to a role like I am, I've only been here two years, it's hard to start shifting board composition. It could take up to a decade to do that. So what characteristics should we be looking for as we start to create kind of a bench of potential board members? What are the best board members to drive good governance? I'd say at the highest level, we want enthusiasm. We want those people who are going to be the ambassadors to the school. But one of my favorite lines, which I heard on the forum, our annual conference last year, was someone said, we want board members who will keep their noses in, but their hands out. And I love that because you want the board members that are focused and engaged on the strategic direction and are being thoughtful, but not the ones that are going to be in the weeds, micromanaging on the day-to-day level. So that's at the highest level. Ideally, of course, your board will mirror the needs of your school. And that can be backgrounds in development, administration, investment management. I feel like it's always nice to throw in a lawyer or two. Diversity of background and thought, like Anita mentioned, is really important to have thoughtful discussions and decisions around the table. So you want to look to fill in those gaps in both demographic and skill sets whenever possible. Now, in order to do that on a more tactical level, I've seen some of the schools with the strongest boards actually have a really intentional approach. And the way that they did it was they maintain a board recruitment matrix. And the matrix includes an actual grid of board members that are both current and candidates. And it'll fill in their experiences or their skill set with their demographics and also if they're current, when their term will end. So it's very clear if someone's rolling off and you're going to have a hole in a skill set, who else is available to start nurturing to see if they'd be a good fit. That's great. And I'll say, you know, one of the things that we do here at the University of Vermont, and I'd love to take credit for this, but I inherited it. So kudos to my predecessors, is that we actually have what we call our Foundation Leadership Council, FLC, who all have given over $100,000 to the university, a lifetime. And they're nominated to sit on that. And that's a very large group. But it is from that group who we pull our board members. And so they are given many of the same opportunities as our board members to get to know the institution. They can sit in on board meetings. They can learn. And it makes it a lot quicker to get them up to speed once they become members on the sitting board. And it's very, very helpful to us. We do have another quick poll that we want to gain some insight from all of you with. Within governance, which of these areas are the most important to you right now? Is it aligning strategy to institutional direction? Are you thinking a lot like about ESG or DEI? Do you feel like you need some more balanced board demography and a succession plan? Or are you really looking more at policy implementation and review? So I'll give everybody just a moment to look at that. And it looks like just about everybody's in right now. And it's pretty well mixed across the board. A lot about what we were just talking about, board demography and succession and aligning strategy. One of the things for me as I took on my first role at Georgia College as an actual VP who was responsible for these things was that policy implementation and review piece. And I, you know, frankly was a little in over my head. I didn't know which policies we really should have, which ones we didn't have and I had to do some research to kind of figure that all out. When I started that role, I really kind of dug in and did a review of all policies. But I am curious to know, Anita, which policies should all organizations have in place and how often should we be reviewing them? Or that's actually a really big question, but we'll try to compress it as much as we can. And maybe Jacob, you can put up a slide that gives them a couple of components of what we're thinking about. But I think we, you know, Paige and I would kind of summarize it into three broad categories, right? One would be strategic direction, putting policy in context and then also thinking about asset allocation and then spending policy, right? So these are kind of three basic areas that we would really focus on. And if we kind of take them one at a time and we think more so kind of about strategic direction, first, we would think about, you know, putting a policy in place that's working for your institution, whether that's pairing the mission with how you're actually making investments or, you know, a particular longer term goals that you're looking to achieve. We talk a lot about the term of intergenerational equity, the common fund, which is ensuring that your portfolio today is postured so that it will be able to take care of the students of tomorrow, the next five, 10, 20 years and into perpetuity. So we spend a lot of time on that. So it's also kind of balancing what are your short term needs with what the longer term goals may be of the endowment. An important component of that too is figuring out who you're going to partner with and what will that structure look like? Is it partnering with a consultant? Is it making investments on a direct basis? Is it working through a discretionary OCIO model? There are lots of things and different ways to explore what that best approach might be for your particular organization based on your specific needs. And then, you know, I think an important component of that is evaluating your manager on a consistent basis, establishing the criteria to do so, you know, what are the things and the ways in which you should be managing and thinking through your interaction with your manager and how frequently should you be evaluating that? And then as one of the questions were on the poll as well, what are some, any special considerations that you may need to think about incorporating which would be ESG folks focus? You know, particularly we are seeing really across a host of campuses today, a much more intent focus on DEI, diversity, equity and inclusion. So figuring out how that should be incorporated into your policy. Second, we kind of look at asset allocation, right? Which is really at the end of the day, probably one of the biggest impacts on what your investment return is going to look like. And you can actually incorporate really simple changes to that policy and they can have a meaningful impact. And whether that means you're adding some illiquid investments or you're making sure that you are disciplined about rebalancing that portfolio on a quarterly basis, all of those things can be important. And another component of that, certainly when we think about that is, you know, how you actually implement that investment strategy is just as equally important. Most endowments today we see are employing, you know, more of an active management approach to their portfolios, but there are times and places where a more passive strategy might make sense or for a particular time. And then thinking about, again, what are the ways and the vehicles in which you might have those investments put together? Interestingly enough, because interest rates have been as high as they are, cash has kind of been back on the agenda of a lot of organizations, but that also has to be balanced with, you know, is there an opportunity cost associated with, you know, thinking about, I am getting a solid return with cash right now, but what are the longer term values that I can have in my portfolio potentially that I may not be considering investing in right now? And then I think the third piece that we would focus on really is, again, spending policy. It's really the one way that you can tie together, you know, your endowment and your institution. Having a defined spending policy is something that we find more and more critical today with organizations. And it's not just about, you know, what is that spend? Is it 4%? Is it 5%? Is it 6%? But it's also thinking about the methodology in which you employ that spending policy, not just a specific percentage that you're focusing on. And it really is an important aspect of discipline that really kind of says, you know, if we look back over the past couple of years, we've had relatively turbulent markets, it's been a high inflation environment, and it can be really easy to accommodate, you know, the markets without discipline in your spending policy. So putting together a specific policy with not just a target spend, but also that methodology really helps to maintain that discipline in both good times and maybe more during, you know, more challenging periods that you may encounter. So it's really important when you think about putting that spending policy together to think about, you know, what is your specific institution's reliance on its endowment? How much of that endowment supports the operating budget on an annual basis? I think another consideration is, you know, is there a need of consistency to support, you know, from that endowment for other initiatives? And then, you know, again, establishing what that overall goal is of your spending policy is a really important component of it. And then, you know, setting that methodology in place, and that could be a variety of different ways. I think the three most common ones that Paige and I run into are, you know, a moving average, sometimes abandoned inflation, or maybe some type of hybrid approach across those three. But those would really be, I would say, Monica, the three areas we really focus on with governance and kind of tying it back to the actual investment of the endowment. Right. You know, again, as with most of you, when I started off my career coming out of the fundraising side, I was really relying on the expertise and the knowledge of my board members to help me to do a lot of the things Anita was just talking about. Here at the University of Vermont Foundation, we're implementing a board succession plan to ensure that we refresh board leadership and to make sure that we have future leaders really ready to step into leadership. So some of the pieces of that include a, what we call foundation fellows, where we have young, aspiring and inspiring donors who want to potentially be on the board, but might not be making quite that biggest gift yet that you would see with an actual board membership. But they serve completely as board members in all other ways. And so it really brings some of that diversity to the table. Paige, I'm wondering, how deep does that volunteer leadership need to be? How far do we need to think in the future in that succession plan? Always nice to hoard talent and friends, right? And this is an important question. I'm just looking at the poll results and it's 37% are focused on this board demographics and succession plan. I'm gonna try to answer that also by just giving a few tools of what I've seen other organizations do in their approach and what makes a lot of sense. You mentioned earlier, Monica, it can take a decade to see any real meaningful turnover on a board, and that's so true. Sometimes that's not a bad thing and it's nice to have that institutional memory, but there are other times where it is actually time to encourage the turnover and make space for that next generation who really can be more actively involved or where they can bring a background or an expertise that you need. I'm surprised at how many boards I encounter that don't have any term limits at all. And yours are pretty strict with the three and then the option to renew for another three. We've found that there is a gradual step in there as a way to encourage change. And one way to do that, instead of just offending everyone and overnight surprise their limits, please, here's the door, you can encourage the change by implementing annual board self-assessments. And in that, it's really a chance to give the members a moment to be very honest about the levels of support that they're giving now. And that's a softer touch way to encourage those who really aren't as plugged in anymore to move on. At University of Vermont, it sounds like there are a few different levels of recruiting and ways to attract that next generation, which is so important. I think you touched on something a little bit that the junior board members might not have the giving ability or the time allowance. So creating a junior board as a way to build a strong pipeline can be really important. We also find that there's some areas that just by nature of the geography that the school is located in, there's not a ton of natural diversity locally. So Anita's mentioning, it's great to have those voices at the table, but you have to be able to pull from some kind of pool. So a junior board might be one way to do that. The other thing that we see occasionally is the school itself will have a bit of a restrictive policy. Maybe it's a high give get number. Maybe you must be an alum of that school to serve on the board. And while that's great for school spirit, if you're a medical college or a law school, that means you're unintentionally led to a full board with really narrow expertise. So instead of just going right to changing that policy or that rule that's in place, establishing an advisory committee that's all outside members that can bring the diversity, the experience and the resources that you need to the table, even if it's a non-voting position, it can really help balance out the voices that are around the table. And that's one of the key linchpins of governance, right? So there are a lot of ways to do that. Go big, try every way. So we're gonna throw up one last little question for all of you. And this kind of talks a little bit about investing and about some of the things Anita was talking about earlier which is the role that a liquid investment can play in a great portfolio. So I am curious what percentage of your endowments are in illiquid investments? So it looks like the majority of the folks who are taking the poll are like I was at a certain point saying what the heck is an illiquid investment. Here at the University of Vermont Foundation, we do sit greater than 20% in our illiquid investment poll. Go back to you, Paige, your findings identified that two other investment decisions have a dramatic impact on success. Asset allocation and that emphasis on allocation on illiquid investments. So to level set and I know for a few of you this will be a refresher. Can you give us a few definitions, what is asset allocation, and what one decision will dramatically change your endowment performance. Do my best. Your asset allocation is how you have your total endowment divided up. And that's by asset class. So what percent do you have an equity versus the percent in fixed income hedge funds or private equity and that totals your asset allocation. Anita mentioned earlier and it was on screen in that middle box, your asset allocation is the biggest determinant of your investment returns, which makes sense right because obviously over time if I'm sitting in all cash or fixed income. I will not earn as much as if I'm in all equities, right, especially for an organization that has a required spend. Now perpetual pools with a spend have to maintain that equity bias in order to keep up the equities are like the return driver over time. However, that's not actually the growth engine the growth engine over time is your illiquid allocation. And I'm fascinated by this so we'll spend a minute on the dispersion and why that's so important. In fixed income if you think about the best fixed income manager and the total dog dropping you know not performing at all. The difference from the best of the worst is about three basis points. So it's not life changing, that's not going to fund a scholarship it might not even fund a coffee on campus. But the dispersion between the best and the worst equity manager is over 100 basis points. Okay, so now that makes more sense why most of the committee meetings if we're talking about managers we're going to spend more time talking about making sure we have the right equity managers than fixed income managers. But here's the kicker. The dispersion between the best private equity manager, which would be in a liquid manager right private equity. And the worst one is 2100 basis points. So that is a huge dispersion between the best and the worst. So, really what that means is that the one decision that will dramatically change endowment performance is how much of an allocation that you have to liquids. But of course, it's not that easy. There's a catch. And the catch is that in order to get that performance benefit from the private equity or the liquid allocation. It's critical that you're really getting the best managers, right, because if the spread is that big 2100 basis points. If you're getting a dog of a manager, frankly, it's not worth doing. You can get the same returns without the lockup or the fees and forget about it. If you're getting the top performing managers. That's how you grow the corpus over time. So you want the private equity allocation, but you have to have the best of the best. So Nina, I'm going to throw it back to you. And I'm going to surprise you a little bit because we're going to talk a little bit. What I want to do is given the makeup of the folks that are on the line. I'm wondering if you can maybe even dig down some more on some definitions and talk to us a little bit about, again, I apologize for those of you who are professionals in this area, but talk to us a little bit more about what is a basis point. What is the difference in those type of managers that we're talking about and let's get a definition of what an illiquid investment is and how it results in success. Sure. And I have a very similar background to you, Monica, you know, I also started as an administrative assistant in this business and I had no idea what an illiquid investment was and then I ended up spending 12 years on the private equity team at common fund so happy to talk a little bit about it. So, just kind of backing up a little bit. So an illiquid investment, you know, kind of generally thought of in the general market term private equity is that term that we generally hear it in. It's an asset that cannot be quickly or easily converted to cash. So it can be something as complex as up and coming venture company that you may not even have heard of yet to a company brand name of something that you use in your household on a daily basis or for those people who are on social like when Facebook was an idea and became, you know, now one of the, you know, magnificent seven companies. And then it could also be something like real estate, you know, something that is tied up it is not easily turned into a cash asset for you. The benefit and why page talked about, you know, why this can be life changing basically for your endowment is the benefit that we have in working in endowments and foundations right is that, you know, there's a natural time horizon that you can match with an endowment over the long period of time we're not planning to close the doors of any, you know, independent school or private or public university tomorrow. So the idea is to have that perpetual pool of assets which we all know, unlike my checking account that gets depleted pretty much on a weekly basis. It's replenished with a, you know, with an endowment, you know, the idea is that those assets are here to stay for the long term, right. So the idea of leveraging a liquid assets in the portfolio is to really take advantage of that dispersion of returns that page talked about, and we refer to them in differences of basis points and that's really just the difference of the return extreme right so if you think about 2100 basis points you know it's like a 21% differential from the bottom to the top performer, it can be significant. And we think about that not only in terms of, you know, the actual you know today this is what the difference is in that range of managers, but it is also what the compounding effective that can be to the portfolio over time. Again, because you may have an endowment that's 5 million you may have an endowment that's 500 million, but the impact of a difference of 2100 basis points or, you know, even more can be significant from not only kind of the way you start that program but how it enhances and compounds over time. So really important and something that we focus on a lot at Common Fund with our, with our clients is kind of just evaluating, you know what that benefit is, we refer to that to give another term Monica is the illiquidity premium. Right. So it's basically saying, how much more am I going to get compensated for, because I've decided or elected to take a piece of my endowment and put it in an area where I can't touch it. Right. And, and the illiquidity premium is okay how much more will I earn versus putting that money in that money in the general stock market or with a direct manager that might invest in that. So that's kind of the broad concept over how you might think about doing that, and you can implement private equity strategies or venture capital, private real estate private credit those all tend to be less liquid investments that are available. You can do that through a variety of ways. Some larger endowments may choose to invest directly with the manager in the marketplace that can be accessed. Other organizations may choose to do that through a commingled fund structure. So there's a lot of different ways to do it. The one thing you have to think about and kind of tying back to pages comments about the access to those managers, is that a lot of those kind of high performing managers that are generating that outperformance of those basis points, is that it is, they oftentimes have minimums, and they're, they're close to new investors. So then it becomes a little bit of a difficulty about how do you actually, how do I actually get that access and how do I build it over time. I do think another point that page talked about again is, you know, what is the way that you can implement such a program, and it's really important to diversify a private equity allocation, you know, by geography by type by vintage year, because if you think about the general market of public or private equity rather, you know, we know when we look at CNBC on a daily basis you see stock prices changing every day you know exactly what that price is that you're going to buy or sell it. The difference with a private company that might want to go public or be acquired by another company is we don't really know when that's going to happen. Right. So developing a portfolio that is diversified by vintage year also helps diversify when those prices actually go through that liquidity event, and you'll start to see a distribution back to to the portfolio page notes I could talk about private equity for hours, so maybe I'll just pause there and I'll let you see if there's some additional questions. Right. Well I, you know, I know that many people on this call are working with independent schools. So welcome. Many of us have managed small and very small endowments frankly, and it's hard as you were saying to get access to a liquid assets for smaller endowment sometimes so page Can you talk a little bit about how those on the call who, you know, it might not might have some limitations with the size of their endowment can still get access to a liquid investments. I cannot promise that I'll be less enthusiastic than Amita though on this topic. So, bear with us. That's a really important point I think one of the things common fund is known for saying is that private equity is an access class, not an asset class, and that's talking about the dispersion again right. So what that means is building a private equity allocation is really not at all about the size of your endowment. It's much more about, are you ready as a school, are you willing and able. And I don't mean to sound too cute with the ready willing and able. What I mean is, can you lock up some capital over a long period of time. Right. Is the committee, comfortable and committed to a long term allocation. It's a sport that requires a lot of discipline it's not about timing it's this a long term project. And finally the able is the dispersion element and that is, can you access the top performing managers repeatedly. The good news is and as you mentioned, especially for the independent schools this isn't a critical part of the endowment and the good news is that if you partner with the right investment manager, you can really level the playing field. So, I mean, even looking at our own client base if you have a client that's $25 million endowment, or a $2.5 billion endowment. If you have a manager that has the access and can give that to you in a structure that is bite size and doable at your size. It's total game changer levels the playing field for your endowment. At common fund we offer private equity funds and a commingled fund structure for that reason. It helps offer the diversification across the board, but also with a bite size as small as a million dollars. And we can do that if it's a institutionally qualified endowment, so there are options out there, it is an important decision. But with the right team you can do it. And that is how we eventually did that at Georgia College as well. As we've discussed a little bit I know that a lot of people on this call are development professionals who may be seeking to lead foundations at some point. And some of you may just be looking to get good information to become better partners with your organization overall. For those on the call who don't currently have roles directly related to governance or endowment management, I'd like to ask Anita, what if I don't have the ability to directly influence asset allocation or board composition? How else can I support good governance? Yeah, it's a great question. And I would hope that most of the people on the call today would be thinking about that, right? Which is what is the influence that I can have? And I think one of the things we think about, and Paige touched on this earlier, right? With noses, I'm gonna mispronounce it, but noses out, what'd you say? Noses in, hands out. Noses in, hands out, my bad. But it's so true, right? One of the most essential voices at any table, right? Committee, board, or otherwise, is one that's not afraid to ask the questions, right? So being willing to speak up and ask those questions and really kind of at a strategic level, very simply why and how, right? Are the kind of two areas. What are we doing? How are we doing it? And why are we doing it? One of the things that I mentioned earlier with the FGA study is that staff that interacts with board members has a much greater opportunity to share field data. And that really helps to drive more informed, better informed decisions, because it incorporates the day-to-day life and experiences of the staff and what's happening on the campus, right? It really makes that connection point so invaluable. So those voices become incredibly important. And if you think about a lot of the resources that are out there today, and we'll talk a little bit about some of those resources that Common Fund has available, in addition to the plethora of information we know that's on the case website, is there are benchmark studies. Some of the considerations you might take with reviewing that information, which is, hey, why don't we look just like our peers? Or why don't we? Or these schools are smaller than us, but they have a much different asset allocation. So it's starting to ask some of those questions and just being willing to raise your hand and saying, has there been, is there a particular reason that we need to be doing it this way? Have we thought about exploring something in a different capacity? And I think importantly, again, from that day-to-day interaction perspective, which is, has there been a change in the direction or on campus that would suggest that we need to change our asset allocation? Or by the way, the method in which we calculate our spend? Certainly project management or whether fortunate or unfortunate, oftentimes there are unintended capital improvements that come up and that can have a significant impact on the liquidity needs of the portfolio. So having that kind of direct channel, if you will, to the board provides a much, much more value than probably folks even recognize at this point. And Anita, you teed me up perfect for my next question, which is, you know, as professionals, and again, going back to Paige's saying of noses in, hands out, we have to guide our leadership. We have to guide both our institutional partners and our volunteer leaders through these governance considerations. What are the questions that we should be asking leadership and board members to help determine what their tolerance is for risk and help to guide them as they make these important decisions? It's a great question. And to Anita's point earlier, the most important part is just to be unafraid in asking the questions, right? And that is the most important voice. I'm looking at the clock because risk is another topic we could go on for. It's an exciting one. I'm thinking about our process and how we do it. When we onboard a new client, our very first exercise together is to really establish consensus around both the return objectives, but also the levels of risk tolerance. But that's for all types of risk. That includes reputational risk, liquidity risk, market risk, enterprise risk. And the one we don't talk about enough, I think, mission risk. Mission risk is the risk of the endowment being unable to support the school at needed levels. And that really speaks to all of our hearts about the perpetuity element of the conversation. So what we use to do it on our side is really a tool. It's a risk management tool. It's really a tool. It's a risk assessment tool that's designed to calibrate an individual's personal levels of risk tolerance with what's needed for the institution. So that's an important factor, right? Because when you walk into a board meeting, you're not actually representing Paige, Anita and Monica. You're putting on your fiduciary hat and you're representing the prep school or university that you're working with, right? So what my comfort level is with investing, and maybe I like to hoard cash into the mattress. We know Anita's exuberance for private equity. Maybe she just wants to be all in venture. Well, actually that doesn't matter, right? Because when we're representing the university, we have a fiduciary obligation to match their focus and their needs and their risk and return profiles. So we actually have a whole tool designed to do that. We actually use an anonymous survey that gathers data to help facilitate that discussion to drive consensus. On a very personal level, which is what you asked, I guess I took the scenic way, but on a personal level that can be as simple as pausing a conversation and saying, hey, Anita, what is your experience and comfort level with private equity? Because it seems like in this conversation, you know more of the details, the jargon, the alphabet soup and have more experience than a lot of us, help kind of bridge the gap and bring us together. Or I love the why questions that Anita mentioned earlier. So it's, how do we think about measuring and managing investment risk? Why do we approach it in this way? Is that the most aligned with our long-term goals? Unafraid in the element of questions. Chase, I think we have a question, but I can pull it up here. Anita and Paige, can you talk about the nuances of school endowments that are distinct from general market processes? Alicia says she's seen both finance professionals be both particularly helpful and particularly unhelpful due to their industry immersion. You know, I'll jump in there. And I think it really carries on closely with Paige's comments that she just made. And I'm sure she has some other thoughts on this, but you know, it's that whole concept of taking off the hat that you wear in your daily professional life and being able to maybe almost in some ways disassociate. I served on a board for eight years and part of our governance training was about that. Like you can come and you have your emotional approach, you have your personal approach and you have your professional approach. And you have to think about how do we disengage from what may be driving a particular decision because as Paige noted, our professional background or where our passions might lie versus the actual agenda item at hand and being able to separate that. So Alicia, I think it's a great question that you're asking because they can be both very helpful. To Paige's point, somebody who has deep financial expertise can come into one of those meetings and create a really dynamic educational session, bring everyone up to speed, recognize that there are some glazed eyes in the room and people do not know what you're talking about and can use it as an opportunity to really catapult everybody up to the same level. Like, aha, I get it. I understand what we're talking about. But the challenge can also oftentimes be, you know, as Paige mentioned, if you don't come in with that right hat on and you kind of have a personal, what's the word I'm looking for, objective or initiative, it's really difficult because you have to keep yourself and that's where good governance comes in as a board chair or other board members stepping up to recognize and acknowledge, you know, what we're talking about today here is a long-term portfolio and we're really not interested in putting 75% of the portfolio in a hedge fund, right? Paige, I'm sure you have some things to add to that. I think that's right. I'm looking at the first part of Alicia's question on the nuances of school endowments that are distinct from general market. Not to be blunt, but schools don't die and they don't pay taxes. We do. So that alone is a big difference in how you're gonna approach long-term portfolio management. To get on a very technical level, every investment model is maximized for something. Most are maximized to volatility. I have tuition and mortgage to pay. The university has a different spend structure and it's even. So you care a lot about how long it takes to recover after a big correction in the endowment. And the third and final biggest nuance I'd say is what Anita also mentioned is just that fiduciary factor, right? You are a fiduciary for this organization. That means you put the organization first. It's not about my own biases, my own preferences and what I like and I'm comfortable with. I need to make decisions on what's best for the school or university. Happy to take that offline though, if we took that question in a different direction from how it was intended. Well, I think we have run up against our end of our time. I don't see any additional questions and I wanna thank you Chase and Case for this opportunity and give Anita and Paige a chance to talk a little bit about some of the resources that they can provide you additional resources and where you might be able to find those. Sure, Monica, thank you so much. We really appreciate the time that you've given us today and both Chase and Case in general. We really value the partnership that Common Fund has with you. Jacob is putting up a slide here that just shows some of the additional resources that we have available to you. We offer these really through the Common Fund Institute which is the educational arm of Common Fund. There is a significant amount of resources and tools that are available to support best practices and governance including the FDA study that Paige and I both talked about as well as investment management for endowments. Some of the other resources that we've also shown up here on the screen are the benchmarking studies that we have done that the Kubo Common Fund study of endowments that'll be out I believe in the next week or so together also with the study of independent schools for many of you that represent those institutions today. We also have a host of white papers that are focused on spending policies, other topics, RFP templates and guides to help understand the different ways in which to really think about engaging with your investment managers as we're seeing in the industry a lot moving away from kind of a more traditional consultant model and evaluating outsourced discretionary models. I would encourage everyone on this call to please feel free to reach out to me or Paige for a more specific conversation. We'd be delighted to support you and your institution. Thank you so much. And with that, I'll turn it back over to Chase for any last minute wrap-ups and I think we are concluded. We are indeed. Thank you colleagues from across the US and Canada for joining us for this very important conversation. I dropped a couple of links into the chat so that you can browse out to Common Funds Resource Center as well as a very special, special collection in the case library specific to endowment management. Both of those resources are at your disposal and we are grateful for your time this afternoon. Bye everyone.

Chase Moore

Common Fund

Monica DeLisa

good governance

endowment success

board composition

asset allocation

illiquid investments

best practices