Business
SEI Releases 2021 Update of Research on Nonprofit Organizations' Spending Policies
Survey finds the percentage of nonprofits that expect to increase spending has doubled over the last five years OAKS, Pa., May 25, 2021 /PRNewswire/ -- SEI
About this update from Sei Investments Company
[{"type":"text","content":"Survey finds the percentage of nonprofits that expect to increase spending has doubled over the last five years\n\n\nOAKS, Pa., May 25, 2021 /PRNewswire/ -- SEI (NASDAQ:SEIC), a leading provider of outsourced chief investment officer (OCIO) services and custom platforms to support insourced investment staffs, today announced the findings of its most recent update to its series on spending practices among nonprofit organizations in North America. The paper highlights that more than two-thirds (69%) of participants say the pandemic has had no effect on their spending rates.\n\"While the spending rates for almost half of respondents surveyed (48%) didn't change, certain types of nonprofit organizations actually increased. For example, 44% of Community Foundations increased spending in the past year, in response to heightened needs related to COVID. Looking ahead, those organizations that anticipate increasing spending in the near future more than doubled (39%) since our last survey (19%) in 2016,\" said Mary Jane Bobyock, Managing Director of the Nonprofit Advisory Team, SEI Institutional Group. \"This increase solidifies the importance of a periodic and regular review of a nonprofit's spending policy, to analyze its alignment with the organization's current needs, as changing market conditions and events can alter an organization's strategy towards their long term mission.\" \nThe range of average spending rates also varied by type of organization. According to the survey findings, private foundations had the highest average spending rate of 5.59% and other organizations with average spending rates between 4.08% and 4.93%. \nAdditional findings highlighted the spending methodologies across nonprofit types, with key takeaways including:\n64% of participants use the moving average spending rate methodology. Only one in ten (10%) of those polled said their organization is considering changing the methodology used for their spending policy. 11% of participants use a banded inflation methodology, which grew in usage since 2016. This signalled that nonprofit organizations were looking for a better predictability factor in 2020, in order to help manage volatility and distributions year to year, while incorporating incremental increases and expenses.102 participants, representing nonprofits with endowments ranging from $25 million to more...