A DQ increase can be manageable, but it will challenge the ability of foundations and endowments to maintain real capital value over time. To provide stability for future generations, policy makers and the sector will need to revisit the way investment portfolios are structured and consider moving away from traditional views on portfolio asset allocation. Understanding and managing risk - for example liquidity risk in addition to market risk, as well as the correlation between asset classes - could potentially provide more stable returns going forward. Our view is that adding alternative assets to a portfolio of equities and fixed income is likely to be a crucial component of success for endowments and foundations in an environment of low yields and higher disbursement requirements.