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Foundation assets fall 27.8 percent

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The value of U.S. foundation assets tumbled 27.8 percent during 2008, with independent foundations taking the biggest hit, a new survey says.

The assets of independent foundations lost 28.9 percent of their value last year, says the survey conducted by the Council on Foundations, which polled 126 of its members for the study.

Public foundations fared better, with a loss of 18.9 percent, while family foundations saw a decline of 27.2 percent.

While foundations of all sizes saw significant losses in 2008, those with $250 million or more in assets lost 28.5 percent of their value, more than any other group, while those with less than $10 million in assets lost the least, or 21.3 percent.

The tumultuous year also brought about changes in asset allocation for many groups.

Almost half the respondents reduced their reliance on equities during the year, while over a third moved more money into cash and fixed-income securities.

While three in four foundations say they will stick to their current investment strategy, those making changes overwhelmingly plan to be more conservative in their investing.

The sector’s poor performance has taken a toll on professional advisers, with about one in four of the foundations that use investment consultants saying they have already changed consultants, or plan to.

Almost nine in 10 of the foundations surveyed use investment managers, and almost half those funders have switched managers or plan to, the report says.

About one in five foundations say they plan to look for ways to reduce the fees they pay for the management of their investments.

The survey was conducted in January 2009.

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