Presentation given at the 2012 Dubai International Endowments Conference

1. Endowment Experiences
from the United States
Growth Strategies for Emerging Muslim Markets
April 23rd, 2012
Presented by: Rafi-uddin Shikoh
advisory.dinarstandard.com

2. 2© 2011 DinarStandard, Strategy Insights, Inc.
Outline
1. Conventional Endowments in US relative to Waqfs
2. Conventional Endowments in the US
3. Conventional Foundations in the US
4. American Muslim Community Waqf Trends & Challenges
Endowments: Experiences from the USA

3. 3© 2011 DinarStandard, Strategy Insights, Inc.
Definitions
Endowments: A financial asset donation made to a non-profit group or institution in the form of
investment funds or other property that has a stated purpose at the bequest of the donor. Most
endowments are designed to keep the principal amount intact while using the investment income
for charitable efforts.1
Endowments in US relative to Waqfs
Source: 1) Investopedia 2) Referenced: K. Rizwan Kadir: Endowments Foster Strength, Islamic Horizon, March 2012
Awqaf Dedicated Endowments
(i.e academic, cultural, religious)
Foundations
Support mix of public institutions through e.g.. grants
Trusts
Typically manage family interests
Endowment distinctions in US 2
The Uniform Prudent Management of Institutional Funds Act
(UPMIFA) provides guidelines

4. 4© 2011 DinarStandard, Strategy Insights, Inc.
Outline
1. Endowments in US relative to Waqfs
2. Endowments in the US
3. Foundations in the US
4. American Muslim Community Waqf Trends & Challenges
Endowments: Experiences from the USA

5. 5© 2011 DinarStandard, Strategy Insights, Inc.
Endowments at the heart of the US Higher education system
1862 Land Grant Act was historic for education endowments in US
Proceeds from the sale of
these lands were to be
invested in a perpetual
endowment fund which
would provide support for
colleges of agriculture and
mechanical arts in each of
the states.
73 land-grant universities in
the US.*
Morrill Act of 1862 established the Land Grant university system.
Source: Land Grant 150 - University of Minnesota document

6. 6© 2011 DinarStandard, Strategy Insights, Inc.
Colleges & University Endowments in the US
SNAPSHOT
1.6
Avg. Full-time employees to
manage endowments
$408.1 billion
Total assets 2011*
64 basis pts
average, to manage their
funds in FY2011
46%
Institutions reporting
increase in donations ‘11
4.6%
Avg. annual effective
spending rate
Source: 2011 NACUBO-Commonfund Study of Endowments. (National Association of College and
University Business Officers); * Based on data from 823 US colleges & universities

7. 7© 2011 DinarStandard, Strategy Insights, Inc.
Colleges & University Endowments in the US
2011
Rank Institution
2011 Endowment
Funds (bill)
1 Harvard $ 31.7
2 Yale $ 19.3
3 University of Texas System $ 17.1
4 Princeton $ 17.1
5 Stanford $ 16.5
6 MIT $ 9.7
7 University of Michigan $ 7.8
8 Columbia $ 7.7
9 Northwestern $ 7.1
10 Texas A&M University System $ 6.9
Source: 2011 NACUBO-Commonfund Study of Endowments. (National Association of College and
University Business Officers)
% Change* in Endowment Market
Value from FY 2010 to FY 2011
* Note: % change does NOT represent the rate of return for the institution’s investments. Rather, the
percentage change in the market value of an endowment from FY 2010 to FY 2011
Assets continue to increase from 2010 to 2011 after post-financial crisis recovery

8. 8© 2011 DinarStandard, Strategy Insights, Inc.
Colleges & University Endowments in the US
SNAPSHOT - Performance
Alternative strategies are key: June 30, 2011 dollar-weighted asset allocation: (although
stark variance in terms of small versus large funds)
Improved Financial Returns*:
• Avg. 19.2% - 2011 fy (net of fee and
expenses; S&P 500 - 30.7%
• Avg. 11.9 % - 2010 fy
• Avg. -18.7% - 2009 fy
Fund size matters:
• Highest average return, 20.1 percent, came
from institutions with assets over $1 billion
• Lowest, 17.6 percent, came from those with
assets under $25 million.
Source: 2011 NACUBO-Commonfund Study of Endowments. (National Association of College and
University Business Officers) * Based on data from 823 US colleges & universities

9. December 2005, $20 million dollar gift for a Center renamed the Prince Alwaleed Bin
Talal Center for Muslim-Christian Understanding (ACMCU). This endowed fund was
the second largest single gift in Georgetown University history
Also, $20 million to Harvard to establish a university-wide program in Islamic studies,
was one of the 25 largest in the university's history
9© 2011 DinarStandard, Strategy Insights, Inc.
Colleges & University Endowments in the US
Islamic Endowments

10. 10© 2011 DinarStandard, Strategy Insights, Inc.
Outline
1. Endowments in US relative to Waqfs
2. Endowments in the US
3. Foundations in the US
4. American Muslim Community Waqf Trends & Challenges
Endowments: Experiences from the USA

11. 11© 2011 DinarStandard, Strategy Insights, Inc.
Foundations & Trusts in the US
The “Giving Pledge”
Bill Gates, Melinda Gates, and Warren
Buffett have a combined net worth of
around $100 billion -- have already
committed most of their money to
charity.
They have asked USA’s billionaires to
pledge to give at least half their net
worth to charity, in their lifetimes or at
death.
81 of America’s wealthiest
individuals and families have
signed onto the Giving Pledge that
now includes Facebook’s Mark
Zuckerberg; CNN’s Ted Turner;
eBays Pierre Omidyar

12. 12© 2011 DinarStandard, Strategy Insights, Inc.
Foundations & Trusts in the US
SNAPSHOT
76,000
Grant making
foundations
$618 billion
Total assets
in 2010
$45.7 billion
Estimated giving by
all foundations
in 2010
4.7%
Est. increase in foundation
assets between ’09-’10
-0.2 percent
Estimated change in giving
between 2009 and 2010
Source: 2011 The Foundation Center / Foundation Growth and Giving Estimates, 2011 Edition

13. 13© 2011 DinarStandard, Strategy Insights, Inc.
Foundations & Trusts in the US
2011
Source: 2011 The Foundation Center / Foundation Growth and Giving Estimates, 2011 Edition
* By giving
% Change in
Assets ‘08-‘09Foundation
Assets
'09 (bill)
Bill & Melinda Gates Foundation $ 33.9
Ford Foundation $ 10.7
J. Paul Getty Trust $ 9.3
Robert Wood Johnson Foundation $ 8.4
W.K. Kellogg Foundation $ 7.2
William and Flora Hewlett Foundation $ 6.8
David and Lucile Packard Foundation $ 6.7
John D. and Catherine T. MacArthur F.. $ 5.2
Gordon and Betty Moore Foundation $ 5.2
Lilly Endowment $ 5.1
Total Giving '09
(bill)
$ 3.00
$ 0.47
$ 0.35
$ 0.27
$ 0.34
$ 0.28
$ 0.29
$ 0.28
% Change in
Giving ’08-’09
Assets increased 13% among the top 25 foundations
by assets in ‘09; the median change in assets was 13%
Giving increased 12% among top
25* in ‘09; med change was 14.%

14. 14© 2011 DinarStandard, Strategy Insights, Inc.
Foundations & Trusts in the US
SNAPSHOT
New York reported the largest
amounts of foundation giving
and assets overall, followed
closely by California
All four regions showed asset gains, with
the Northeast registering the largest
increase in assets. Thirty states plus the
District of Columbia posted a decrease in
foundation giving in 2009

15. 15© 2011 DinarStandard, Strategy Insights, Inc.
Outline
1. Endowments in US relative to Waqfs
2. Endowments in the US
3. Foundations in the US
4. American Muslim Community Waqf Trends & Challenges
Endowments: Experiences from the USA

16. 16© 2011 DinarStandard, Strategy Insights, Inc.
American Muslim Demographic Background
Young, middle-class, diverse, majority 1st generation immigrants
Young
Middle-Class
Diverse
Majority 1st
generation
immigrants

17. State
Est. Muslim
Popn. (2010)
California 1,180,205
New York 920,847
Texas 597,459
Illinois 508,093
New Jersey 487,423
Michigan 313,114
Pennsylvania 301,809
Maryland 228,633
Virginia 221,788
Georgia 191,816
17© 2011 DinarStandard, Strategy Insights, Inc.
American Muslim Demographic Background
Diverse and geographically distributed
south asian
american

18. 18© 2011 DinarStandard, Strategy Insights, Inc.
Opportunity for Waqfs in US
Mosques/ Muslim Community Centers: Necessity driving need for Waqfs
• 2,106 mosques in 2011
• 1,209 mosques in 2000
• 74% increase from 2000
• Mosque expansion/ ‘Community
Centers’ -- growing demand

19. 19© 2011 DinarStandard, Strategy Insights, Inc.
Opportunity for Waqfs in US
Islamic Schools: Necessity driving need for Waqfs
• Islamic schools in the US have
increased by 25% since 2006
• Approximately 350+ Islamic
schools, 40,000 students are
enrolled in the United States
• Demand high for quality Islamic
school to serve growing
numbers of Muslim children
• Community funded, struggle
with finances. Mostly manage
through fees + donations
• E.g.. School, 300+ fee paying
children, financially challenged,
Candidate for Waqf protection/
support
Example: Darul Arqam (DAA) School, New Jersey

20. 20© 2011 DinarStandard, Strategy Insights, Inc.
A US Based Waqf
The North American Islamic Trust (NAIT)
• Established in 1973, NAIT is a waqf serving Muslims in the United States. Partner of ISNA
(Islamic Society of North America) largest American Muslim organization
• Services:
1. Waqf protection to properties of Islamic Centers. Holds titles to approximately 300
properties
2. Facilitates limited interest-free loans from its Islamic Centers Cooperative Fund
(ICCF)
3. Provides Islamic investing options to the community through a sharia-compliant
mutual fund. The Iman Fund (IMANX) is a no-load mutual fund offered by Allied
Asset Advisors, a subsidiary of NAIT. ($39.5 million net assets)

21. 21© 2011 DinarStandard, Strategy Insights, Inc.
US Waqf Challenges & Opportunity Example
Minnesota Education Trust (dba Minnesota Waqf)
• A Waqf, MET is based in Minnesota, set up by the regional Muslim American
Society (MAS) chapter but serving as an independent partner entity. ($5 million in
property assets)
• Successes:
• Tarek ibn Ziyad Academy case
• Duluth mosque community
• Investment property purchase for local Masjid
• Challenges:
• Increasing asset protection of Muslim projects needed
• Concept of Waqf not understood by community (title transfer)
• Lack of Sharia compliant capital access

22. 22© 2011 DinarStandard, Strategy Insights, Inc.
Key Lessons
1. Endowments in the US
2. Foundations in the US
3. American Muslim
Community Waqf Trends
& Challenges
Endowments: Experiences from the USA
• Sophistication of investment
practices; size profile/ asset
allocation; operational efficiency
• Role of types of Foundations (e.g.
Corporate, Community);
operational efficiency; Investment
practices; Areas of long-term
development focus
• American Muslim Community
growing needs and challenges and
some emerging creative solutions

23. R E S E A R C H & A D V I S O RY
Growth Strategies for Emerging Muslim Markets
Muslim
Lifestyle
Market
Islamic Finance
OIC
Industries
80 Broad Street, 5th Floor,
New York City, NY 10004, USA
advisory.dinarstandard.com
Analyst Network:
New York, Istanbul,
Kuala Lumpur, Dubai