Foundations Reported Double-Digit Gains in 2025
Private and community foundations saw significant returns in 2025 as they shifted capital toward alternative strategies.
Updated on Sept. 28, 2026 in Investing
Live Poll
Is now a good time for major institutions to shift toward riskier alternative investment strategies?
Private and community foundations secured average investment returns of 14.1% and 14.7% respectively in 2025. This performance marks the third consecutive year of double-digit gains for the 285 foundations included in the study.
Why it matters
The sustained growth, which followed a poor performance year in 2022, highlights how adjusted asset allocations and professionalized management can impact long-term portfolio results. These returns underscore the role that alternative strategy usage plays in institutional investment outcomes.
A study of 285 foundations holding a combined $126.9 billion in assets showed 2025 returns of 14.1% for private entities and 14.7% for community foundations. These results compare to 10-year annualized returns of 9% and 8.6% for those groups.
The players
Private Foundations
Organizations that primarily provide grants to other charitable entities and utilize investment portfolios to fund their activities.
Community Foundations
Public charities that manage funds for local philanthropic efforts and rely on investment strategies to support community-based grants.
The details
Foundations achieved these returns by actively managing portfolios through shifts between cash, equities, and alternative strategies. Private foundations allocated 45.8% to alternative strategies, while community foundations allocated 20.5%. Additionally, many organizations utilized outsourced investment offices to manage their portfolios, a strategy employed by 47% of community foundations and 39% of private foundations.
Timeline
2022: Foundations experienced their worst recorded investment performance.
2024: This year served as the baseline for annual asset allocation comparisons.
2025: Foundations reported their strong annual investment returns.
Money Landscape
The 2025 investment returns signify a robust recovery from the significant losses foundations experienced during the 2022 market downturn. This performance aligns with a broader trend of institutional portfolios leaning more heavily on alternative assets to drive growth.
While these returns reflect institutional portfolios, they serve as a reminder to periodically review your own asset allocation and diversification strategies. Households should discuss with a professional whether their portfolio mix aligns with their long-term financial objectives.
The takeaway
Institutional success in 2025 was driven by a combination of outsourced management and high allocations to alternative strategies. Readers should use this as a prompt to check their own investment policy statements and confirm their portfolio risk level is still appropriate for their financial goals.
Further reading
For more information on how market trends impact long-term growth, visit Investing.
Source note: This article includes information reported by Chief Investment Officer.
Live Poll
Is now a good time for major institutions to shift toward riskier alternative investment strategies?
