Boston – The Boston Foundation announced today it recorded a strong financial performance in calendar 2006, with an increase in the value of its assets of nearly $100 million. The market value of those assets increased from $731.8 million at the end of December 2005 to the current value of $830.7 million. That includes $70.9 million in funds raised by the foundation in 2006 as well as a significant improvement in the financial performance of its portfolio. The Foundation also beat its own benchmarks for increased value as well as the broader indexes that track the overall performance of equity markets.
“These figures tell two important stories,” said Paul S. Grogan, President and CEO of the Boston Foundation. “First, that a significant commitment to philanthropy continues to thrive in Greater Boston; and, second, that the portfolio balancing that our investment committee and staff began a number of years ago and which was recently concluded has yielded very strong results”
The asset allocation strategy represents a diversification of the Foundation’s investments, which makes it possible to use a wider variety of investment instruments—including real estate, timber and other commodities, venture capital and buy-out funds and hedge funds, in addition to more traditional investments in stocks and bonds—to generate larger returns while protecting the foundation against volatility in any particular investment sector.
“The great strength of this approach is to make it possible to find significant investment opportunities even in sectors—such as real estate—that are perceived to be close to full value,” said Jerrold Mitchell, Chief Investment Officer. “At the same time, it offers important protection from markets that are potentially volatile.”
The asset allocation strategy was reviewed in 2005 and the investment objectives were determined at that time. The changes determined as a result of the policy have been completed and the impact on the value of the Foundation’s assets has become apparent in the past year and a half.
“Our performance for 2006, with an overall increase in value of 15.6 percent places us in the first quartile of the most widely recognized indexes that track the performance of universities and foundations, such as the Trust University Comparison Service, or TUCS,” said Mitchell.
The Foundation’s Investment Committee, is chaired by Richard M. Burnes, General Partner of Charles River Ventures, Inc., and includes Carol Anderson, former Managing Director, Harbor Vest Partners, LLC, Jack R. Meyer, Managing Partner and CEO, Convexity Capital and Management LP, and Binkley C. Shorts, retired Senior Vice president, Partner and Equity Portfolio Manager, Wellington Management Company, LLP.
The Boston Foundation, Greater Boston’s community foundation, is one of the oldest and largest community foundations in the nation, with an endowment of over $830 million. In 2006, the Foundation and its donors made more than $70 million in grants to nonprofit organizations and received gifts of $71 million. The Foundation is made up of some 850 separate charitable funds established by donors either for the general benefit of the community or for special purposes. The Boston Foundation also serves as a major civic leader, provider of information, convener, and sponsor of special initiatives designed to address the community’s and region’s most pressing challenges. For more information about the Boston Foundation, visit www.tbf.org or call 617-338-1700.