Small endowments and foundations are willing to absorb some portfolio losses in order to hit their longer-term return targets, according to a survey by CAPTRUST Financial Advisors. But the investment research and consulting firm spotted a conundrum in its finding.

There’s a disconnect between what they’re willing to lose from their investments and their stated return objectives, CAPTRUST’s probe of more than 150 of endowments and foundations found. Based on their asset allocations, most of them would have seen losses far greater than they find acceptable, the firm said.

A majority of the endowment and foundations probed by CAPTRUST have less than $50 million of investable assets and plan to maintain their asset allocations across equities, fixed income, and alternative investments. They may need to follow pension funds in ratcheting down their return expectations to adjust for lower yields from traditional investments, according to Eric Bailey, a financial advisor at CAPTRUST.

“They are taking more risk than they currently say they want to be taking,” he said in a phone interview. “In today’s interest-rate environment you cannot achieve 7-to-8 percent returns with any large allocations to fixed income.”

About 73 percent of endowments and foundations expect returns of 5 percent to 8 percent, according to the survey. About 82 percent of these nonprofit investors are only willing to risk losses of less than 10 percent to meet their return objectives.

The most conservative investors with respect to their willingness to take losses had more aggressive asset allocations than those with more moderate risk tolerance, the firm found.

“There’s inconsistency,” said Grant Verhaeghe, senior director and asset-liability practice leader at CAPTRUST.

A majority of endowment and foundations surveyed have only one full-time or part-time investment-focused staff member, and most rely on their asset managers or registered investment advisers for advice.

For those planning changes to their portfolios, 22 percent of endowments and foundations said they would increase allocations to international equities. Ten percent of those surveyed expected to make larger bets on alternative assets such as real estate, private equity, and hedge funds. Five percent of respondents planned bigger allocations to U.S. equities, while 13 percent said they would reduce exposure to the asset class.

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Endowments and foundations produced a median gain of 5.1 percent after fees in the decade through 2017, according to the survey. The long-term results fell short of expectations due to losses from the 2008 financial crisis, CAPTRUST said, with better performance seen over more recent time horizons.

They produced a median return of 7.2 percent for the five years through 2017, and 6.9 percent over a seven-year period, the survey found.