{"title":"Practical Applications of Mission Impossible: Foundation Investment Policy in the Post-COVID World","authors":"Michael W. Crook","doi":"10.3905/pa.2023.pa568","DOIUrl":null,"url":null,"abstract":"In <ext-link><bold><italic>Mission Impossible: Foundation Investment Policy in the Post-COVID World</italic></bold></ext-link>, from the February 2023 issue of <bold><italic>The Journal of Investing</italic></bold>, <bold>Michael Crook</bold> of <bold>Mill Creek Capital Advisors</bold> warns that there are no riskless spending policies available to foundations that intend to operate in perpetuity. Crook suggests that foundations, apart from increasing their allocations to risky assets, also consider the obvious solution of lowering spending rates—though he acknowledges that the required 5% annual spending rate for private foundations can be a significant challenge. Additionally, he cautions against simply relying on the average outcomes of Monte Carlo simulations without considering the range and distribution of simulation results.","PeriodicalId":500434,"journal":{"name":"Practical applications of institutional investor journals","volume":"19 1","pages":"0"},"PeriodicalIF":0.0000,"publicationDate":"2023-09-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Practical applications of institutional investor journals","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.3905/pa.2023.pa568","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"","JCRName":"","Score":null,"Total":0}
引用次数: 0
Abstract
In Mission Impossible: Foundation Investment Policy in the Post-COVID World, from the February 2023 issue of The Journal of Investing, Michael Crook of Mill Creek Capital Advisors warns that there are no riskless spending policies available to foundations that intend to operate in perpetuity. Crook suggests that foundations, apart from increasing their allocations to risky assets, also consider the obvious solution of lowering spending rates—though he acknowledges that the required 5% annual spending rate for private foundations can be a significant challenge. Additionally, he cautions against simply relying on the average outcomes of Monte Carlo simulations without considering the range and distribution of simulation results.
Mill Creek Capital Advisors的迈克尔·克鲁克(Michael Crook)在2023年2月的《投资杂志》(the Journal of Investing)上发表的《不可能完成的任务:后covid时代的基金会投资政策》中警告说，对于打算永久运营的基金会来说，没有无风险的支出政策。克鲁克建议，基金会除了增加对风险资产的配置外，还应该考虑降低支出率这一显而易见的解决方案——尽管他承认，私人基金会要求的5%的年支出率可能是一个重大挑战。此外，他警告说，不要仅仅依赖蒙特卡罗模拟的平均结果，而不考虑模拟结果的范围和分布。
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