Nobel Foundation May Seek Charitable Donations to Boost Endowment

Hobbled by disappointing investment returns, the Nobel Foundation, a private institution created in 1900 by the will of Alfred Nobel to manage the assets that underwrite the Nobel Prizes in physics, chemistry, physiology/medicine, literature, and peace, is considering accepting contributions from outside donors, Bloomberg News reports.

The foundation, which last year cut the cash award that accompanies each prize by 20 percent, implemented various cost-cutting measures, and invested more of its corpus in hedge funds in an effort to boost returns, has yet to see a significant payoff from the moves. The return of 7.9 percent on invested capital in 2012 was "a little bit better than our benchmarks," Lars Heikensten, the foundation's executive director, told Bloomberg News. And while the foundation "should of course continue to try to improve our asset management," said Heikensten, "I'm not sure that will be enough."

Although the foundation has "absolutely no plans" to seek donor capital in 2013, it will need to explore the option "in the coming years," added Heikensten. Such an effort could include a global campaign to attract donors, target organizations, and individual investors to "help beef up our capital," said Heikensten, and/or opening Nobel museums outside Sweden and Norway. A new Nobel Center on Stockholm's Blasieholmen Island that will open in 2018 is being financed primarily through donations from the Ehrling-Persson Family and the Knut and Alice Wallenberg foundations.

"There is a long-term problem if we want to raise the ambition level, which I'd like to see us do," said Heikensten. "It'll be difficult to save more, and it will also be difficult to maintain costs at the current level. This indicates there will be a need for more money over time."

Niklas Magnusson. "Nobel Foundation Seeks Charity as Hedge Funds Aren?t Enough." Bloomberg News 10/17/2013.