The Nobel Foundation, which said last year it was using hedge funds to help boost capital, is now considering charitable donations after previous strategies failed to bring in enough money.

The Stockholm-based institution, which earlier this month rounded off its 2013 awards, cut the prize money by 20 percent last year in an effort to preserve capital. Since then, laureates have had to make do with $1.23 million in each category. Lars Heikensten, executive director of the Nobel Foundation, says he wants to raise the amount again to restore the award’s status.

“There is a long-term problem if we want to raise the ambition level, which I’d like to see us do,” Heikensten said. “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.”

The Nobel Foundation, created in 1900 at the request of Swedish industrialist Alfred Nobel to award prizes in physics, chemistry, medicine, peace and literature, is cutting costs after expenses outstripped income for a decade. Poor returns over the same period were then exacerbated by the onset of the global financial crisis. Given the circumstances, the foundation says it had no choice but to lower the prize last year for the first time since 1949.

The foundation “should of course continue to try to improve our asset management, but I’m not sure that will be enough,” Heikensten said. He didn’t say which hedge funds were used.

The return of 7.9 percent on invested capital in 2012 was “a little bit better than our benchmarks,” Heikensten said. Returns this year have so far “been better” than benchmarks, he said.

While the foundation has “absolutely no plans” to seek donor capital now, it will need to explore the option “in the coming years,” Heikensten said. Steps could include a broad campaign globally to attract donors or to target organizations or investors individually to “help beef up our capital,” he said. Any arrangement must safeguard integrity and independence of the Nobel award, he said.