An Introduction to the Endowment

In this new online column, American Library Association (ALA) Senior Endowment Trustee Brett Bonfield will update members about the ALA Endowment Fund, its role in ALA finances, and additional topics related to investment decisions and how they are made.

ALA’s endowment is a major component of the Association’s finances, contributing millions of dollars each year to the budget to support ALA activities. It’s also one of the least visible aspects of Association operations, and investment activity can be complicated and intimidating to examine.

The trustees value transparency and collaboration. In an effort to uphold those values and improve communication with members, we will post updates in this column and the Endowment Trustees page every few months.

The endowment’s performance

ALA’s endowment is stewarded by its trustees: Brett Bonfield (senior trustee and the author of this column), Maggie Farrell, Julia M. Gelfand, Rhea Brown Lawson, Jack Martin, Jr., Shali Zhang, and ALA Treasurer Larry Neal. ALA’s Executive Board appoints endowment trustees for up to two consecutive three-year terms.

This has been a tumultuous year for stocks, bonds, and other investments. ALA’s endowment was worth $64.5 million on January 31. But at the start of April, it fell, along with the US stock market, reaching $63.2 million. It then rebounded, along with the markets, increasing to $68.3 million at the end of August. Its current value as of the end of September is $67.4 million. That value reflects an annual distribution made to ALA in September, which was $2.5 million this year. The Association will use the funds from that distribution for operations, scholarships, and other member services.

The trustees view it as vital to manage risk. Sometimes, to avoid the worst of the lows, we may miss some of the highs. On balance, this has served ALA well. The trustees began investing in the stock market in October 1994, with an endowment worth $1.6 million.

Looking forward

In addition to providing updates about the endowment’s performance, this column will also discuss investing and endowment stewardship, including:

• Assessing investing costs and performance
• Alternative investments, such as private equity and private credit
• Distribution models
• Diversification and managing risk
• Environmental, social, and governance and similar considerations

Many of these topics echo decisions that are familiar to anyone with a 403(b) or other retirement account. A few are specific to endowments and institutional investments. If there are topics that you’d like the trustees to explore, I encourage you to contact me through ALA Connect.

Please consider a contribution to the endowment. Donating now or through a planned gift creates an enduring legacy. Every organization benefits from permanent, reliable funding, and ALA is no exception.

Thank you for entrusting us to steward your Association’s endowment.