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Up0
The more responsibility a foundation or endowment has for funding the ongoing operations of an entity the lower the risk tolerance for the foundation or endowment. Has anyone found a % of funding requirement that “flips” the tolerance from average to below average? Ie if a foundation is responsible for 50% of operating expenses it average, but if it provides 60% it should be more conservative.
I know you need to look at the entire context of the problem to decide ultimate risk tolerance but its something that has been bugging me. Thoughts?
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Up3
Hey @Johnsoad‌ – before we look into this in detail, I’d suggest taking a look at a few threads discussing the whole IPS topic if you haven’t seen them:
https://300hours.com/f/cfa/level-3/t/the-ultimate-guide-to-tackling-ips-questions-institutional-investors/p1
https://300hours.com/f/cfa/level-3/t/how-to-tackle-ips-questions/p1 -
Up2
It would be very difficult to put without a context, Also 50 or 60 percent don’t make much difference.
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