What Services Should an Investment Manager Provide to Non-Profits, Foundations, and Endowments?

As a non-profit organization or foundation, it is essential that you have access to experienced  and knowledgeable investment management. Having the right investment management support  in place can make the difference between obtaining your desired financial results and missing  out on those opportunities – ultimately impacting your ability to do good work and generate funds  for future initiatives.

We’re here today to look at the typical services offered by a registered investment advisor so  that you can ensure your organization has the right financial professional overseeing your  assets.

For portfolio management and asset protection strategies for your foundation or business, contact the advisors at Brown | Miller today

The Investment Management Consulting Process

Investing for a non-profit organization requires careful investment management, consulting and  monitoring. Professional investment consultants typically provide tailored advice to suit the  nonprofit’s needs, such as risk mitigation, asset diversification, portfolio construction and cost  savings. They can also provide the necessary tools and technology to track investments and  assess risks associated with investing decisions.

A well-thought-out investment strategy is crucial for any non-profit, endowment, or foundation to  sustain and potentially grow its funding base. If you are responsible for managing an  endowment, foundation, or non-profit, investment management consulting can help you  prudently manage funds while avoiding potential risk exposure.

The investment management consultant that you select should be fully aware of your  organization’s goals, principles, and values. Their focus should be solely on meeting your  organization’s financial goals, assuming the investment strategies fall within your risk tolerances  and align with your core values.

An Investment Policy Statement

Developing an investment policy statement for your nonprofit, endowment, or foundation can  help ensure that your organization’s investment advisor understands and follows investment  criteria that are in line with your specific needs, objectives, and values. This statement sets out  investment advice and outlines strategies, restrictions, and goals that must be taken into  consideration when making decisions.

A clear investment policy statement also serves as an agreement between the investment  advisor and client regarding roles, responsibilities, reporting requirements, and investment  management details. Ultimately, this policy statement ensures that investment activities are  properly carried out to meet the stated objectives of the nonprofit organization.

Money Manager Selection

Most investment advisors act as a manager-of-managers. In other words, the investment  advisor recommends which money managers should be considered to invest the assets of your  organization. This can take a fair amount of research and time, especially given any Man uses computer to select investment advisor group for their investment management consulting processspecific requirements or restrictions that your organization has in relation to the investment policy statement’s guiding principles.

Your investment advisor should be able to provide you with a complete understanding of how and where the money manager(s) will be investing your organization’s assets.

Since money managers play the crucial role of stewarding money, researching who they are and their qualifications should be a part of any due diligence. Assessing their philosophy, process,  personnel, prior performance, and fees are important components of ensuring a sound money manager selection process for any nonprofit organization.

Portfolio Monitoring & Performance Reporting

As part of their role, an investment manager is responsible for monitoring and reporting on the  performance of the donor charity’s portfolio. They should be tracking market trends and  evaluating any potential adjustments that may need to be made to the portfolio to ensure that it  is performing at its optimum level, while also accounting for risk tolerances.

Your investment advisor should also be providing you with reports related to asset allocations,  investment fees, and expenses, as well as any regulatory requirements or changes that could  impact your organization’s portfolio.

The performance reporting should use metrics like internal rate of return (IRR) as a guideline to  calculate the future value added to your organization’s donations.

Charitable Gifting Strategies for Donors

Investment managers have a critical responsibility to ensure that nonprofit organizations are  able to provide charitable gifting strategies for donors. The goal of these strategies is to create  maximum benefit while minimizing any risks to the donor. This is especially important given the  changing legal and fiscal environment related to charitable giving.

Investment managers must stay up-to-date with current laws and regulations in order to properly  advise nonprofits on designing gifting plans that best serve donors, as well as support their  education in understanding the benefits of contributing philanthropically. A good investment  manager should continually strive to meet these expectations through comprehensive analysis  and evaluation of available options for charities and donors alike.

Bottom Line

Managing investments for non-profits, foundations, and endowments is a complex and  challenging process. From long-term planning to short-term monitoring, effective investment  managers must understand the unique circumstances of each organization they serve in order  to develop strategies that take into account the organization’s individual needs, financial  resources, goals, and restrictions.

By providing comprehensive guidance and support throughout the entire process, an  experienced and knowledgeable investment manager can help organizations reach their desired  financial objectives. With a customized approach that covers every stage of the investment  process – from strategic asset allocation to portfolio risk management – a qualified investment  manager can help your organization create a well-established fiduciary process for the  management of your assets. Ultimately, when it comes to securing your nonprofit future through  effective resource management, there is no replacement for an experienced professional who  understands organizational needs.

As wealth managers in Washington, D.C., the investment advisors at Brown | Miller specialize in  comprehensive financial planning and wealth management strategies for nonprofits,  foundations, and endowments. Contact us today to learn more about how we can help your  organization.


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

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