As a trustee of a nonprofit, endowment, or foundation, you have the important responsibility to ensure your organization’s assets are being managed with care. Your role as steward is critical in preserving the long-term sustainability of these essential organizations.
There are many types of financial advisors out there, and choosing the right one to oversee the financial aspects of the organization can seem overwhelming with all of the options available to you. The right investment advisor will carry out the fiduciary responsibilities of administering funds and developing the overall investment strategy that will allow your organization to pursue its financial goals, which will enable it to achieve its larger mission statement.
With no shortage of advisors willing to offer financial advice, choosing the right fiduciary for your organization is crucial, and should be approached with set requirements and goals in mind. There are many things to know and consider throughout the process.
For financial advice for your non-profit, business,or just your individual portfolio, contact the Brown |Miller financial advisors in Washington, D.C. to see how they can help you
Trustee Responsibility: The Importance of Hiring a Fiduciary
A trustee is a person or organization that is responsible for managing the money or other assets that have been put into a trust. A trustee is trusted to make the best decisions in the name of their beneficiary’s best interests.
A trustee has a fiduciary duty to act within the best interests of their beneficiary. All trustees inherently have several responsibilities:
- The assets are not their own. Therefore, a trustee will never mix any personal assets with trust assets. They also cannot use assets for their own benefit
- A trustee must abide by all instructions laid out in the trust
- Any trust assets must be invested according to the laid-out risk parameters
- Trustees must keep accurate records, including tax returns, and report to any and all beneficiaries laid out in the trust
All fiduciaries are required by law to serve their client’s best interests. All fiduciaries are held to a high standard, and this adds an element of loyalty to any organization that hires a trustee.
Is a CFP® Professional /CIMA® Professional Right for your Foundation’s Needs?
A CIMA® advisor (certified investment management analyst) is a certification offered by the Investments & Wealth Institute for financial planners and advisors who have an emphasis on investment management. A CIMA® advisor can work with individuals and corporations, and they can prove invaluable to nonprofits or other charitable organizations. They specialize in a wide variety of investments, which include endowments and their asset management. CIMA® advisors stand out amongst financial professionals in that they bring a high level of expertise in business strategy, operations, and management.
A CFP® professional is a fiduciary who specializes in a wide variety of financial topics. For example, a CFP® professional may specialize in investment management, estate planning, tax strategy, or insurance. While they may specialize in one particular area, their expertise encompasses a wide scope of financial topics.
A CFP® professional encompasses a broad range of financial areas, and due to this, they often hold additional certifications to match specific areas of expertise. It is not uncommon for a CFP® to also have a CIMA® certification. A CFP® professional must also adhere to the CFP Board’s ethical standards, which ensures they have both a fiduciary duty to you and your organization and provides a level of transparency.
Both certifications offer a wide range of benefits, including investment advisor fiduciary duties and high levels of expertise regarding investment management and business operations. These attributes make either one of these advisors an invaluable asset to any nonprofit or charitable foundation.
Investment Advisor Duties for Nonprofits, Foundations, and Endowments
The overall purpose of nonprofit and foundation investing is to achieve whatever the organization’s ultimate mission and goals are towards its chosen cause. Donors give money to these organizations because of their mission. They trust that their donated funds will be invested appropriately and responsibly in alignment with the causes and community that the organization serves.
A good investment advisor abides by a fiduciary standard and works with their clients to ensure that the nonprofit or foundation focuses on better serving and advancing their purpose via donor funds and stewardship of their endowments. By abiding by a fiduciary standard and serving their client’s best interest, a qualified investment advisor should utilize their financial and business expertise to further the cause; all capital should be optimized to its fullest investment potential within the determined risk parameters so the organization’s dollars are fully utilized.
Choosing the Right Wealth Management Firm
Brown | Miller is committed to providing focused, intentional financial planning and investment management services for nonprofits and other organizations. Our team of certified professionals possess the knowledge, experience, and credentials necessary to assist with meeting your organization’s mission & goals. We understand the importance of maintaining a fiduciary standard for your organizational needs. Contact us today, to find out more about our services for non-profits, endowments, and foundations.
Disclaimer: This article is intended for informational purposes only, and not to be a client-specific suitability analysis or recommendation, an offer to participate in any investment, or a recommendation to buy, hold or sell securities. Do not use this report as the sole basis for investment decisions. Do not select an asset class or investment product based on performance alone. Consider all relevant information, including your existing portfolio, investment objectives, risk tolerance, liquidity needs, and investment time horizon. This report is for general informational purposes only and is not intended to predict or guarantee the future performance of any individual security, market sector, or the markets generally.
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