"So we are beginning to see these shifts," Jarvis says. "They don't all occur at once, but it looks as if healthcare organizations are reconsidering whether this endowment model works for them."
Endowment models have been around since at least the early 1990s and Jarvis says they generally have a "higher tolerance for less-liquid assets like real estate, hedge funds, private equity, and venture capital." Higher education institutions, for example allocate about 10% of their investments to bonds.
"Colleges and universities were the leaders in diversifying portfolios into different asset classes that would provide uncorrelated sources of return that don't go up and down together at the same time," Jarvis says.
The endowment model eventually caught on with charitable foundations, then operating charities such as museums and symphonies, and now it is piquing interest with nonprofit healthcare organizations.