Inflation in Independent and Higher Education: The Case for the HEPI

The way inflation is defined has a clear impact on schools’ ability to meet current and future spending needs.  Even in a low-inflation investment environment, inflation is a significant risk for endowments because costs will increase and require larger distributions to maintain the same level of services. Access to reliable inflation data  and using the most appropriate inflation measure is critical to accurate budgeting and planning.  That’s why Commonfund produces the Higher Education Price Index (HEPI), an inflation index designed to track this information and assist budget, finance and investment professionals working in education in understanding and planning for the future of their institutions’ finances. We believe this measure is highly relevant because it captures prices in a fixed basket of goods specific to educational institutions and their general expenditures.

In this session, Commonfund panelists will examine the importance of using HEPI, how it can contribute to an institution’s ability to maintain purchasing power/intergenerational equity and provide insight into why using this inflationary measure for budget forecasting is more accurate that CPI + 5%.  In addition, Commonfund will review the components of HEPI and detail plans for an update to more accurately align with schools’ expenditures in a post-COVID era.  There will be time allotted for Q&A.

Learning Objectives:

• Understand how and why properly accounting for inflation can contribute to an institution’s ability to maintain purchasing power/intergenerational equity and meet its mission.
• Identify key considerations for using HEPI at your institution to more accurately reflect costs and budget forecasts and the implications of doing so.
  

Pricing

Members: Free
Nonmembers: $125.00

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Presenters

Ryan Driscoll

Managing Director

Commonfund OCIO Investment team

Ryan Driscoll is focused on macroeconomic research and serves as the investment officer for the firm’s Multi-Asset Portfolio investors. He is also responsible for the design, tailoring and implementation of custom investment solutions for Treasury clients. Prior to joining Commonfund, Driscoll worked at Sailfish Capital Partners, a multi-strategy fixed income fund, where he served on the emerging markets team. Prior to that, he was on the fixed income team at Grantham, Mayo, Van Otterloo & Co. and was an equity/fixed income trader at Loring, Wolcott and Coolidge, in Boston. Driscoll received his B.S. in finance and M.S. in global financial analysis (with distinction) from Bentley University. He is a CFA Charterholder and is a member of the Boston Securities Analyst Society and CFA Institute.

Amanda Novello

Sr. Policy and Research Analyst

Commonfund Institute

Amanda Novello is a member of the Commonfund Institute team and is responsible for thought leadership creation and data analysis across all Institute activities, including benchmarks studies, DEI initiatives and ESG. Prior to working at Commonfund, she was an economic policy researcher for various nonprofit organizations, producing analyses of economic and labor market trends, and the distributional impacts of public policy. Novello earned an M.A. in economics from the New School for Social Research and a B.S. in economics and mathematics from the University of Southern California.