Nonprofit healthcare organizations saw their investment returns shrink in 2010, but they still recorded double-digit gains for the second straight year, according to a survey conducted by Wilton-based nonprofit asset manager Commonfund.
The average fiscal 2010 total return on investable assets for 90 nonprofit healthcare organizations participating in the survey reported a 10.9 percent return on investments. That’s down from the 18.8 percent return registered in fiscal 2009, but up from the 21.2 percent loss reported for fiscal 2008.
The returns for FY2009 and FY2010 represent the best back-to-back annual performance in the nine years that the Study has been conducted, according to Commonfund.
The 90 participating organizations represent $102.6 billion in investable assets and $42.3 billion in defined benefit plan assets as of December 31, 2010.
“Investable assets” include endowment/foundation funds, funded depreciation, working capital and other separately treated assets.
For the trailing three years, Study participants reported average annual returns on their investable assets of 0.4 percent, while for the trailing five years they reported average annual returns of 4.1 percent.
The average fiscal 2010 return for Study participants’ defined benefit pension plans was 12.3 percent. For the trailing three-year period, returns on DB plan assets averaged 0.2 percent and 4.3 percent for the trailing five years.
Relative to some other areas of the nonprofit sector, participating healthcare organizations realized moderately lower returns on their investable assets in 2010.
“Historically, healthcare organizations have higher allocations to fixed income securities than do foundations and operating charities, and in a good environment for equities that allocation likely served as a drag on relative return,” said John Griswold, executive director of Commonfund Institute, which sponsors the studies.
