Put Your Money Where Your Heart is – Investor Orientations and Endowment Portfolio Investments in German Foundations

39 Pages Posted: 1 Jun 2021 Last revised: 22 Feb 2022

See all articles by Maximilian Kremer

Maximilian Kremer

Technische Universität München (TUM) - Center for Entrepreneurial and Financial Studies (CEFS)

Ann‐Kristin Achleitner

Technische Universität München - Center for Entrepreneurial and Financial Studies

Date Written: January 15, 2022

Abstract

Germany benefits from an especially lively philanthropic sector, with over twenty-three thousand active charitable foundations. An empirical assessment of the portfolio preferences of German foundations yields fundamental intragroup differences in their approach to asset allocation. We build on entrepreneurial orientation theory to explore these differences in motives, rationales, and portfolio investment preferences and extract a typology along with a commercial and mission orientation in charitable foundations' investment orientation. We derive an explanatory model that improves our understanding of the observed differences foundations exhibit in their investment orientation. Our model shall enable a more structured knowledge of the sources of capital for differing commercial and social endeavors.

Keywords: Charitable Foundations, Endowments, Investor Orientation, Entrepreneurial Orientation, Commercial Investing, Mission-Related Investing

JEL Classification: L26, L31, L33, G11

Suggested Citation

Kremer, Maximilian and Achleitner, Ann-Kristin, Put Your Money Where Your Heart is – Investor Orientations and Endowment Portfolio Investments in German Foundations (January 15, 2022). Available at SSRN: https://ssrn.com/abstract=3855497 or http://dx.doi.org/10.2139/ssrn.3855497

Maximilian Kremer (Contact Author)

Technische Universität München (TUM) - Center for Entrepreneurial and Financial Studies (CEFS) ( email )

Arcisstr. 21
Munich, 80333
Germany

Ann-Kristin Achleitner

Technische Universität München - Center for Entrepreneurial and Financial Studies ( email )

Arcisstr. 21
Munich, D-80290
Germany
+49 89 289 25181 (Phone)

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