Endowment Experiences
from the United States
Growth Strategies for Emerging Muslim Markets
April 23rd, 2012
Presented by: ...
2© 2011 DinarStandard, Strategy Insights, Inc.
Outline
1. Conventional Endowments in US relative to Waqfs
2. Conventional ...
3© 2011 DinarStandard, Strategy Insights, Inc.
Definitions
Endowments: A financial asset donation made to a non-profit gro...
4© 2011 DinarStandard, Strategy Insights, Inc.
Outline
1. Endowments in US relative to Waqfs
2. Endowments in the US
3. Fo...
5© 2011 DinarStandard, Strategy Insights, Inc.
Endowments at the heart of the US Higher education system
1862 Land Grant A...
6© 2011 DinarStandard, Strategy Insights, Inc.
Colleges & University Endowments in the US
SNAPSHOT
1.6
Avg. Full-time empl...
7© 2011 DinarStandard, Strategy Insights, Inc.
Colleges & University Endowments in the US
2011
Rank Institution
2011 Endow...
8© 2011 DinarStandard, Strategy Insights, Inc.
Colleges & University Endowments in the US
SNAPSHOT - Performance
Alternati...
December 2005, $20 million dollar gift for a Center renamed the Prince Alwaleed Bin
Talal Center for Muslim-Christian Unde...
10© 2011 DinarStandard, Strategy Insights, Inc.
Outline
1. Endowments in US relative to Waqfs
2. Endowments in the US
3. F...
11© 2011 DinarStandard, Strategy Insights, Inc.
Foundations & Trusts in the US
The “Giving Pledge”
Bill Gates, Melinda Gat...
12© 2011 DinarStandard, Strategy Insights, Inc.
Foundations & Trusts in the US
SNAPSHOT
76,000
Grant making
foundations
$6...
13© 2011 DinarStandard, Strategy Insights, Inc.
Foundations & Trusts in the US
2011
Source: 2011 The Foundation Center / F...
14© 2011 DinarStandard, Strategy Insights, Inc.
Foundations & Trusts in the US
SNAPSHOT
New York reported the largest
amou...
15© 2011 DinarStandard, Strategy Insights, Inc.
Outline
1. Endowments in US relative to Waqfs
2. Endowments in the US
3. F...
16© 2011 DinarStandard, Strategy Insights, Inc.
American Muslim Demographic Background
Young, middle-class, diverse, major...
State
Est. Muslim
Popn. (2010)
California 1,180,205
New York 920,847
Texas 597,459
Illinois 508,093
New Jersey 487,423
Mic...
18© 2011 DinarStandard, Strategy Insights, Inc.
Opportunity for Waqfs in US
Mosques/ Muslim Community Centers: Necessity d...
19© 2011 DinarStandard, Strategy Insights, Inc.
Opportunity for Waqfs in US
Islamic Schools: Necessity driving need for Wa...
20© 2011 DinarStandard, Strategy Insights, Inc.
A US Based Waqf
The North American Islamic Trust (NAIT)
• Established in 1...
21© 2011 DinarStandard, Strategy Insights, Inc.
US Waqf Challenges & Opportunity Example
Minnesota Education Trust (dba Mi...
22© 2011 DinarStandard, Strategy Insights, Inc.
Key Lessons
1. Endowments in the US
2. Foundations in the US
3. American M...
R E S E A R C H & A D V I S O RY
Growth Strategies for Emerging Muslim Markets
Muslim
Lifestyle
Market
Islamic Finance
OIC...
Upcoming SlideShare
Loading in …5
×

US Endowments & Waqfs

1,222 views

Published on

Presentation given at the 2012 Dubai International Endowments Conference

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
1,222
On SlideShare
0
From Embeds
0
Number of Embeds
2
Actions
Shares
0
Downloads
33
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

US Endowments & Waqfs

  1. 1. Endowment Experiences from the United States Growth Strategies for Emerging Muslim Markets April 23rd, 2012 Presented by: Rafi-uddin Shikoh advisory.dinarstandard.com
  2. 2. 2© 2011 DinarStandard, Strategy Insights, Inc. Outline 1. Conventional Endowments in US relative to Waqfs 2. Conventional Endowments in the US 3. Conventional Foundations in the US 4. American Muslim Community Waqf Trends & Challenges Endowments: Experiences from the USA
  3. 3. 3© 2011 DinarStandard, Strategy Insights, Inc. Definitions Endowments: A financial asset donation made to a non-profit group or institution in the form of investment funds or other property that has a stated purpose at the bequest of the donor. Most endowments are designed to keep the principal amount intact while using the investment income for charitable efforts.1 Endowments in US relative to Waqfs Source: 1) Investopedia 2) Referenced: K. Rizwan Kadir: Endowments Foster Strength, Islamic Horizon, March 2012 Awqaf Dedicated Endowments (i.e academic, cultural, religious) Foundations Support mix of public institutions through e.g.. grants Trusts Typically manage family interests Endowment distinctions in US 2 The Uniform Prudent Management of Institutional Funds Act (UPMIFA) provides guidelines
  4. 4. 4© 2011 DinarStandard, Strategy Insights, Inc. Outline 1. Endowments in US relative to Waqfs 2. Endowments in the US 3. Foundations in the US 4. American Muslim Community Waqf Trends & Challenges Endowments: Experiences from the USA
  5. 5. 5© 2011 DinarStandard, Strategy Insights, Inc. Endowments at the heart of the US Higher education system 1862 Land Grant Act was historic for education endowments in US Proceeds from the sale of these lands were to be invested in a perpetual endowment fund which would provide support for colleges of agriculture and mechanical arts in each of the states. 73 land-grant universities in the US.* Morrill Act of 1862 established the Land Grant university system. Source: Land Grant 150 - University of Minnesota document
  6. 6. 6© 2011 DinarStandard, Strategy Insights, Inc. Colleges & University Endowments in the US SNAPSHOT 1.6 Avg. Full-time employees to manage endowments $408.1 billion Total assets 2011* 64 basis pts average, to manage their funds in FY2011 46% Institutions reporting increase in donations ‘11 4.6% Avg. annual effective spending rate Source: 2011 NACUBO-Commonfund Study of Endowments. (National Association of College and University Business Officers); * Based on data from 823 US colleges & universities
  7. 7. 7© 2011 DinarStandard, Strategy Insights, Inc. Colleges & University Endowments in the US 2011 Rank Institution 2011 Endowment Funds (bill) 1 Harvard $ 31.7 2 Yale $ 19.3 3 University of Texas System $ 17.1 4 Princeton $ 17.1 5 Stanford $ 16.5 6 MIT $ 9.7 7 University of Michigan $ 7.8 8 Columbia $ 7.7 9 Northwestern $ 7.1 10 Texas A&M University System $ 6.9 Source: 2011 NACUBO-Commonfund Study of Endowments. (National Association of College and University Business Officers) % Change* in Endowment Market Value from FY 2010 to FY 2011 * Note: % change does NOT represent the rate of return for the institution’s investments. Rather, the percentage change in the market value of an endowment from FY 2010 to FY 2011 Assets continue to increase from 2010 to 2011 after post-financial crisis recovery
  8. 8. 8© 2011 DinarStandard, Strategy Insights, Inc. Colleges & University Endowments in the US SNAPSHOT - Performance Alternative strategies are key: June 30, 2011 dollar-weighted asset allocation: (although stark variance in terms of small versus large funds) Improved Financial Returns*: • Avg. 19.2% - 2011 fy (net of fee and expenses; S&P 500 - 30.7% • Avg. 11.9 % - 2010 fy • Avg. -18.7% - 2009 fy Fund size matters: • Highest average return, 20.1 percent, came from institutions with assets over $1 billion • Lowest, 17.6 percent, came from those with assets under $25 million. Source: 2011 NACUBO-Commonfund Study of Endowments. (National Association of College and University Business Officers) * Based on data from 823 US colleges & universities
  9. 9. December 2005, $20 million dollar gift for a Center renamed the Prince Alwaleed Bin Talal Center for Muslim-Christian Understanding (ACMCU). This endowed fund was the second largest single gift in Georgetown University history Also, $20 million to Harvard to establish a university-wide program in Islamic studies, was one of the 25 largest in the university's history 9© 2011 DinarStandard, Strategy Insights, Inc. Colleges & University Endowments in the US Islamic Endowments
  10. 10. 10© 2011 DinarStandard, Strategy Insights, Inc. Outline 1. Endowments in US relative to Waqfs 2. Endowments in the US 3. Foundations in the US 4. American Muslim Community Waqf Trends & Challenges Endowments: Experiences from the USA
  11. 11. 11© 2011 DinarStandard, Strategy Insights, Inc. Foundations & Trusts in the US The “Giving Pledge” Bill Gates, Melinda Gates, and Warren Buffett have a combined net worth of around $100 billion -- have already committed most of their money to charity. They have asked USA’s billionaires to pledge to give at least half their net worth to charity, in their lifetimes or at death. 81 of America’s wealthiest individuals and families have signed onto the Giving Pledge that now includes Facebook’s Mark Zuckerberg; CNN’s Ted Turner; eBays Pierre Omidyar
  12. 12. 12© 2011 DinarStandard, Strategy Insights, Inc. Foundations & Trusts in the US SNAPSHOT 76,000 Grant making foundations $618 billion Total assets in 2010 $45.7 billion Estimated giving by all foundations in 2010 4.7% Est. increase in foundation assets between ’09-’10 -0.2 percent Estimated change in giving between 2009 and 2010 Source: 2011 The Foundation Center / Foundation Growth and Giving Estimates, 2011 Edition
  13. 13. 13© 2011 DinarStandard, Strategy Insights, Inc. Foundations & Trusts in the US 2011 Source: 2011 The Foundation Center / Foundation Growth and Giving Estimates, 2011 Edition * By giving % Change in Assets ‘08-‘09Foundation Assets '09 (bill) Bill & Melinda Gates Foundation $ 33.9 Ford Foundation $ 10.7 J. Paul Getty Trust $ 9.3 Robert Wood Johnson Foundation $ 8.4 W.K. Kellogg Foundation $ 7.2 William and Flora Hewlett Foundation $ 6.8 David and Lucile Packard Foundation $ 6.7 John D. and Catherine T. MacArthur F.. $ 5.2 Gordon and Betty Moore Foundation $ 5.2 Lilly Endowment $ 5.1 Total Giving '09 (bill) $ 3.00 $ 0.47 $ 0.35 $ 0.27 $ 0.34 $ 0.28 $ 0.29 $ 0.28 % Change in Giving ’08-’09 Assets increased 13% among the top 25 foundations by assets in ‘09; the median change in assets was 13% Giving increased 12% among top 25* in ‘09; med change was 14.%
  14. 14. 14© 2011 DinarStandard, Strategy Insights, Inc. Foundations & Trusts in the US SNAPSHOT New York reported the largest amounts of foundation giving and assets overall, followed closely by California All four regions showed asset gains, with the Northeast registering the largest increase in assets. Thirty states plus the District of Columbia posted a decrease in foundation giving in 2009
  15. 15. 15© 2011 DinarStandard, Strategy Insights, Inc. Outline 1. Endowments in US relative to Waqfs 2. Endowments in the US 3. Foundations in the US 4. American Muslim Community Waqf Trends & Challenges Endowments: Experiences from the USA
  16. 16. 16© 2011 DinarStandard, Strategy Insights, Inc. American Muslim Demographic Background Young, middle-class, diverse, majority 1st generation immigrants Young Middle-Class Diverse Majority 1st generation immigrants
  17. 17. State Est. Muslim Popn. (2010) California 1,180,205 New York 920,847 Texas 597,459 Illinois 508,093 New Jersey 487,423 Michigan 313,114 Pennsylvania 301,809 Maryland 228,633 Virginia 221,788 Georgia 191,816 17© 2011 DinarStandard, Strategy Insights, Inc. American Muslim Demographic Background Diverse and geographically distributed south asian american
  18. 18. 18© 2011 DinarStandard, Strategy Insights, Inc. Opportunity for Waqfs in US Mosques/ Muslim Community Centers: Necessity driving need for Waqfs • 2,106 mosques in 2011 • 1,209 mosques in 2000 • 74% increase from 2000 • Mosque expansion/ ‘Community Centers’ -- growing demand
  19. 19. 19© 2011 DinarStandard, Strategy Insights, Inc. Opportunity for Waqfs in US Islamic Schools: Necessity driving need for Waqfs • Islamic schools in the US have increased by 25% since 2006 • Approximately 350+ Islamic schools, 40,000 students are enrolled in the United States • Demand high for quality Islamic school to serve growing numbers of Muslim children • Community funded, struggle with finances. Mostly manage through fees + donations • E.g.. School, 300+ fee paying children, financially challenged, Candidate for Waqf protection/ support Example: Darul Arqam (DAA) School, New Jersey
  20. 20. 20© 2011 DinarStandard, Strategy Insights, Inc. A US Based Waqf The North American Islamic Trust (NAIT) • Established in 1973, NAIT is a waqf serving Muslims in the United States. Partner of ISNA (Islamic Society of North America) largest American Muslim organization • Services: 1. Waqf protection to properties of Islamic Centers. Holds titles to approximately 300 properties 2. Facilitates limited interest-free loans from its Islamic Centers Cooperative Fund (ICCF) 3. Provides Islamic investing options to the community through a sharia-compliant mutual fund. The Iman Fund (IMANX) is a no-load mutual fund offered by Allied Asset Advisors, a subsidiary of NAIT. ($39.5 million net assets)
  21. 21. 21© 2011 DinarStandard, Strategy Insights, Inc. US Waqf Challenges & Opportunity Example Minnesota Education Trust (dba Minnesota Waqf) • A Waqf, MET is based in Minnesota, set up by the regional Muslim American Society (MAS) chapter but serving as an independent partner entity. ($5 million in property assets) • Successes: • Tarek ibn Ziyad Academy case • Duluth mosque community • Investment property purchase for local Masjid • Challenges: • Increasing asset protection of Muslim projects needed • Concept of Waqf not understood by community (title transfer) • Lack of Sharia compliant capital access
  22. 22. 22© 2011 DinarStandard, Strategy Insights, Inc. Key Lessons 1. Endowments in the US 2. Foundations in the US 3. American Muslim Community Waqf Trends & Challenges Endowments: Experiences from the USA • Sophistication of investment practices; size profile/ asset allocation; operational efficiency • Role of types of Foundations (e.g. Corporate, Community); operational efficiency; Investment practices; Areas of long-term development focus • American Muslim Community growing needs and challenges and some emerging creative solutions
  23. 23. R E S E A R C H & A D V I S O RY Growth Strategies for Emerging Muslim Markets Muslim Lifestyle Market Islamic Finance OIC Industries 80 Broad Street, 5th Floor, New York City, NY 10004, USA advisory.dinarstandard.com Analyst Network: New York, Istanbul, Kuala Lumpur, Dubai

×