Building a Resilient Endowment: How Much Liquidity Is Enough?

Joshua Guiser – Washington & Jefferson College

How much liquidity does your endowment truly need—and what is it costing you? For the past several years, cash and bonds have provided attractive returns with low risk, allowing institutions to meet spending needs comfortably. But with bond yields down from recent highs, higher education CFOs face renewed challenges in balancing liquidity, risk, and growth.

This session explores how a thoughtfully managed liquidity profile can strengthen—not constrain—your institution’s ability to fulfill its mission. We will examine the tradeoffs between maintaining liquidity and pursuing long-term endowment returns, quantify the opportunity cost of excess liquidity, and discuss how illiquid investments can be incorporated responsibly within an endowment structure.

Through real-world examples and modeling, participants will learn frameworks for determining how much liquidity is “enough,” how to evaluate endowment cash flows, and how to align investment policy with operational realities.

Attendees will leave with practical tools to design a liquidity strategy that preserves flexibility today while sustaining purchasing power and impact for future generations.

Learning Objectives

  • Describe a holistic framework that integrates operating realities, balance sheet constraints, and endowment objectives to determine the right level of endowment liquidity.
  • Determine, through case studies, how peer institutions have strategically incorporated illiquid assets into their endowment to achieve higher long-term returns.
  • Examine how perpetual investors can better align asset allocation and risk profile with support for the long-term mission.

CPE Available

  • 1 Credit: Finance