Data sourced from Dakota Marketplace, the global LP and GP intelligence platform trusted by thousands of investment professionals. Learn More | Book a Demo
Private foundations averaged a 14.1% net return in 2025 and 9.0% annualized over ten years, against an average stated long-term objective of 7.4%. On paper, that is an investment committee with room to say yes. In the meeting, a new manager often hears that the pacing schedule is full. The returns are real. The capacity is the constraint.
Returns Are Not the Constraint
Foundations have now posted three consecutive years of double-digit returns through 2025. The Council on Foundations–Commonfund Study (August 2026, 285 institutions, $126.9 billion in combined assets) shows private and community foundations moving together, with long-term figures that clear spending needs.
|
Performance Period
|
Private Foundations
|
Community Foundations
|
|
2025
|
14.1%
|
14.7%
|
|
2024
|
10.3%
|
11.0%
|
|
10-Year Annualized
|
9.0%
|
8.6%
|
|
20-Year Annualized
|
7.2%
|
7.1%
|
Source: Council on Foundations–Commonfund Study, August 2026. Returns are averages net of fees; long-term periods end December 31, 2025.
A good year raises portfolio values, but it does not create new room for commitments. That depends on what the portfolio already holds.
Allocations Are Already Full
Private foundations hold 46% of assets in alternative strategies, more than double the 21% held by community foundations. Family foundations sit in between at 37.9%, split across private equity (9.9%), venture capital (9.3%), and marketable alternatives (7.5%), per an October 2026 Commonfund analysis.
|
Asset Class
|
Private Foundations
|
Community Foundations
|
|
U.S. Equities
|
25%
|
39%
|
|
Non-U.S. Equities
|
16%
|
20%
|
|
Fixed Income
|
10%
|
17%
|
|
Alternative Strategies
|
46%
|
21%
|
|
Cash and Other
|
3%
|
3%
|
Source: Council on Foundations–Commonfund Study, August 2026. Dollar-weighted average allocations, rounded.
Morgan Stanley's 2026 Endowments and Foundations Survey (June 2026, 100 endowments and foundations with at least $150 million in assets) found alternatives at 36% of portfolios, ahead of U.S. equities at 27%. Fewer respondents plan to add exposure than in 2023. The conversation has moved from building the allocation to managing it.
Liquidity and Spending Set the Pace
Private foundations report an average stated spending rate of 5.2%, and community foundations 4.6% (Commonfund, August 2026). Among private foundations, 32% raised spending in response to public-policy conditions, up from 23% the year before. In the Morgan Stanley survey, 47% of respondents named liquidity as the single greatest challenge of using alternatives, up from 21% in 2023, and 31% expect spending rates to rise over the next three years.
Returns fill the portfolio. Distributions fund the next commitment. When distributions are slow and grants are rising, commitment pacing becomes the gate, and a manager's pitch has to show where the strategy fits inside it.
The Person Who Says Yes May Not Work at the Foundation
Among private foundations, 39% use an outsourced investment office, as do 47% of community foundations. Those that outsource hand over most of the portfolio: an average of 93.4% of assets for private foundations and 89.7% for community foundations. For a fund manager, that changes the target. The meeting that matters may be with an outsourced CIO or consultant who weighs the same pacing and liquidity questions across a book of clients.
Dakota data: Dakota Marketplace covers over 2,000 foundations and over 10,000 foundation contacts, including 148 CIOs. That is the working universe for finding which foundations to approach and who holds the decision.
Bottom Line
Foundation returns show the capital exists. Liquidity and governance decide whether it is available to you, and the first step is knowing which foundations have room and who holds the decision.
Find Foundation Allocators in Dakota Marketplace
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