Cultural Institutions 2022-2023 Investment Policies, Practices, and Performance – American Alliance of Museums

Download the report

introduction

In 2023, the American Alliance of Museums, Fiduciary Advisors, and the Morton Arboretum will provide practical, trusted, on-the-ground insights into investment management, purpose, and performance for museums, zoos, gardens, and performing arts organizations around the world. conducted a national investment benchmark study aimed at developing Country.

Because the intersection of mission-driven goals and financial sustainability is critical in the rapidly evolving financial landscape of cultural institutions. Investment policies, practices and performance of cultural institutions provides cultural leaders with valuable insights tailored to their unique needs, filling the gap left by previous investment benchmarks designed for large corporations and higher education institutions.

Join us for a webinar on Wednesday, February 14, 2024 to discuss the report and learn:

• Current insights into investment practices among cultural institutions
• Strategies for more effective financial management in uncertain times
• Discussion and guidance on current and future investment management best practices

Register for webinar

executive summary

A challenging and evolving landscape

Cultural institutions have been put to the test in recent years, with the COVID-19 crisis and subsequent economic downturn in 2022 having a major impact on financial stability. This environment highlights the importance of a well-managed investment portfolio in ensuring long-term financial strength. Oversight of these assets has reached unprecedented levels, requiring access to tools and resources for responsible management and informed decision-making.

Survey overview

The 2023 survey attracted 226 respondents from a variety of cultural institutions, including botanical gardens/arboretums, art museums, history museums, symphony orchestras, zoos, and more. Participants covered a wide range of investment pool sizes, from investment pools of less than $10 million to large institutions with assets in excess of $100 million.

Main findings

This study reveals that we are committed to building and expanding our investment pool to further our mission. There has been a significant increase in interest in socially conscious investing, with emphasis on best practices, risk management and cost considerations recognized as top priorities. Decision-making authority resides primarily within the finance or investment committee and almost always involves expert advice.

Investment strategy and track record

The size of an organization plays a vital role in shaping its investment strategy, with smaller organizations prioritizing domestic stocks and bonds, while larger organizations invest heavily in alternative investments such as private equity and hedge funds. Allocate funds. Despite the challenges of 2022, a diversified portfolio (including stronger positions in stocks) generally gave him good returns over three-, five-, and 10-year periods.

Setting goals and future priorities

Survey respondents pointed to a variety of changes in investment practices over the past five years, from changes in asset allocation to the adoption of environmental, social, and governance (ESG) principles. Improving investment returns remains a top priority for many, and there is a growing focus on socially conscious investing.

Governance and oversight

The report highlights the widespread role of finance or investment committees in decision-making, often supported by professional advice. The involvement of external investment advisors emphasizes the importance of effective management. The study also examines spending policies, revealing the diversity and impact of portfolio size on considerations such as diversity, equity, and inclusion (DEI) standards.

Thoughts as a conclusion

This benchmarking effort provides a nuanced view of the investment landscape of cultural institutions, focusing on growth, best practices, and external advisory support. As the investment pool expands, the report suggests, leaders are turning to data and experts for effective asset management, and there is an increasing emphasis on prudent oversight and management. There is.

This first edition serves as a valuable resource that provides cultural leaders with the knowledge to navigate the complexities of investment programs and impact the success of their entire organization.

In conclusion, this study not only sheds light on the current state of investment practices in cultural institutions, but also serves as a guide for future decision-making. The insights provided in the report represent a joint effort by Fiduciary Advisors, the American Alliance of Museums, and the Morton Arboretum to address the unique financial challenges facing cultural leaders in today’s dynamic environment. It’s proof. As the cultural sector continues to grapple with a complex financial landscape, this research serves as an important resource, providing a roadmap for effective financial management and long-term success for cultural institutions.

Download the report

Source: 2022-2023 National Investment Benchmark Survey. Data as of April 11, 2023.

Produced in partnership with