Stewardship Principles for Non-Profits

  • By Christopher W. Brown, CFP®, CIMA®

  • 3 Mar, 2023

  • Nonprofit

Non-profit organizations focus on creating a positive difference in their community, an effort that  requires financial support for it to be sustainable. By investing resources into providing  assistance and serving its mission, these entities can make substantial progress towards  enriching the lives of those around them. Non-profits have to be financially prudent with their  finances if they’re going to reach high levels of productivity.

As stewards of a non-profit, the executive team must uphold fiduciary standards – such as  integrity, honesty, trust and fairness – to ensure that not only are financial goals met but also  that the organization is carrying out its mission with excellence.

Non-Profit organizations operate with a heightened level of responsibility, making stewardship  principles integral to their success. This article examines the essential guidelines:

  • Why should you consider working with a Certified Investment Management Analyst  (CIMA®)?
  • Understanding the implications of the Uniform Prudent Management of Institutional  Funds Act (UPMIFA) for your Non-Profit
  • What should the investment management look like for a Non-Profit?
  • Finding the right team of fiduciary financial professionals to invest and manage your  Non-Profit assets


The Value of a  Certified Investment Management Analyst (CIMA®) Designation

A Certified Investment Management Analyst, or CIMA®, is a certification for financial  professionals issued by an organization called the Investments and Wealth Institute. This  designation is a high mark of achievement and skill. It is only offered to financial advisors who  have taken a qualifying course at Yale, the University of Chicago, or The Wharton School of the University of Pennsylvania, amongst other varying education requirements.

The exam itself is rigorous, and those with a CIMA® designation are typically considered highly skilled wealth managers, as it indicates the advisor in question has invested a significant  amount of time and effort to obtain this regarded designation.

CIMA® accredited professionals specialize in investments and management, leveraging their  knowledge to build strong portfolios while mitigating risk. They provide guidance on a wide  range of services such as portfolio assessment, construction, monitoring and more – all aimed at  helping you make the wise financial decisions that drive success.

CIMA® certified advisors are valuable financial professionals, especially for Non-Profit  organizations, due to their expertise and knowledge. The Investments and Wealth Institute data shows that CIMA® financial professionals manage an average of $297 million in assets under management. These figures make CIMA® advisors highly sought-after members of the industry.

Certified Investment Management Analysts have a highly desirable blend of skills which make  them invaluable to nonprofit organizations. They provide strategic business guidance while also  possessing strong financial expertise, allowing them to accurately assess risk when making key  decisions concerning responsible capital investment.

The Uniform Prudent Management of Institutional Funds Act (UPMIFA)

For a nonprofit to have long-term financial security and sound management, endowments play  an essential role. To ensure the funds are put to their best use, both state and federal  regulations provide guidance as to how they should be spent or invested. It is every good  steward’s responsibility to pay close attention to these regulations in order for these important  resources to remain viable over time.

The Uniform Prudent Management of Institutional Funds Act (UPMIFA) has been adopted  across the country. The requirements established by UPMIFA can help nonprofits, and their  boards of directors, create a spending policy regarding donor-restricted funds, expected return,  and the spending policies of any long-term asset pools.

UPMIFA was established to ensure nonprofit organizations had guidelines regarding the most  prudent way to spend endowment funds, including appreciated assets and any income created  from those assets. This is known as the “prudence standard” and should be referenced when  financial planning for a nonprofit.

The Investment Management Consulting Process for Non-Profits


Three people in a brain storm meeting, how to select a wealth management firmInvestment management for a nonprofit is essential to its long term success. It can also be very time-consuming to manage. Creating a suitable investment policy, managing the investment portfolio, and abiding by fiduciary standards is no small undertaking. Without the proper attention or knowledge, a nonprofit can potentially run into legal issues or see subpar investment results, hampering progress and operations.

However, with the right approach to sound investment advice and portfolio management,  nonprofit executives and board members can create a successful and enduring investment plan  that both pursues its stated financial goals and grows the organization’s assets over time. As  your organization grows, so does the importance of a more defined and streamlined investment  portfolio; clearly defined goals and risk parameters need to be set.

Nonprofit organizations can maximize their long-term success and bolster community impact by  having an investment strategy in place that encompasses investments, fundraising initiatives,  scholarships and physical construction projects. A well thought out plan will put them on a clear  path to achieving goals quickly and efficiently.

Choosing the Right Wealth Management Firm

Nonprofit stewardship involves taking a principled, mission-driven approach to creating an  investment strategy for the greater good. It includes several larger responsibilities as well as  countless smaller yet crucial tasks that must not be overlooked.

Working with a wealth management firm like Brown | Miller has a wide array of benefits for  nonprofits, as the professionals there bring a level of expertise gained from years of experience  managing the investments of nonprofit organizations. To see what that might look like for you  and your organization, contact us today.


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Author: Christopher W. Brown, CFP®, CIMA®

Christopher W. Brown is the Founder and Managing Principal at Brown | Miller Wealth Management.