HNWIs demand outperforming, mission-driven endowment funds

High-net-worth investors' (HNWIs) increasing demand for philanthropy vehicles with robust governance, a clear mission and can outperform in equal measure is helping fuel the rise of endowment funds such as the Aspect Impact Fund.

The endowment aims to distribute about $500,000 annually, providing scholarships and fee relief for autistic students who require partial or full financial support.

According to Autism Spectrum Australia, about 675,000 Australians are on the autism spectrum or around one in 40 people.

Managed by Evans and Partners on behalf of Autism Spectrum Australia, the fund is designed to provide a permanent, self-sustaining source of capital that supports Autistic Australians through education scholarships and fee relief. Over time, it aims to expand into research and other autism-related initiatives.

Evans and Partners senior investment adviser Ryan Cormican said donors are increasingly looking for structured giving models that offer transparency, accountability and a lasting social legacy.

"Fundraising is changing," Cormican said.

"I work with high-net-worth families and philanthropists on the private client side, while also working with not-for-profit organisations like Aspect. What we're seeing is a really positive trend towards more trust-based giving."

From an investment perspective, the fund has navigated a volatile first year that included market disruptions stemming from US President Donald Trump's tariff wars, global trade tensions and escalating conflict in the Middle East involving the US, Israel and Iran.

Despite the uncertainty, the fund is currently outperforming its long-term objective of CPI+3% measured over a six-year timeframe.

"We're currently performing above that objective, which is a positive start, but we'd view that as a relatively short period and more noise than a meaningful signal about long-term performance," Cormican said.

"Our focus is really on through-the-cycle performance and delivering CPI +3% over the long term."

Cormican said robust governance is central to achieving that objective. Before investing, Evans and Partners works with clients and boards to determine investment horizons, risk tolerances and liquidity requirements, which are then formalised in an investment policy statement.

Investing from an ethical lens is also critical to the fund's mission.

The fund's current allocation comprises 70% growth assets and 30% defensive assets, while responsible investment screens exclude tobacco, pornography and companies deriving more than 10% of revenue from alcohol.

Over time, the fund expects to increase its exposure to investments that align closely with Aspect's mission and donor intentions.

Cormican said that other pools of capital, particularly shorter-term or balanced portfoliosl, have a much greater emphasis on liquidity and income generation.

"With an endowment, because the investment horizon is much longer, you have greater flexibility. You can allocate to alternative asset classes and impact investments that may generate higher long-term returns," he said.

"Importantly, those impact investments can be closely aligned with the mission of the organisation and the intentions of the donors who contribute to the endowment."