Charitable Institutions

Charitable institutions have a unique set of challenges that add to the complexity of their asset management. In addition, in recent years, donors to such institutions have become increasingly concerned about the investment management process in place at organizations to which they are gifting their hard earned wealth. Yet, we still must strive for a healthy return on these portfolios as the funds, both gifted and earned, are intended to impact the community both during and beyond our donors lives.

Some of these challenges include:

  • How to properly establish an "Investment Policy Statement", which illustrates in writing, the needs and goals of your organization, and the parameters by which the portfolio will be disciplined in pursuit of those goals.
  • The recognition that obligations of your organization cannot easily be adjusted during bad times in the economy or investment markets.
  • The increasing need to educate donors regarding the performance and risk management of these portfolios, and to do so in a manner that is simple and easy to understand for those who may not be fluent in the language of finance.
  • Ensuring that the decision makers understand, and are properly administering their required due diligence.
  • Providing regular education among decision makers about how to properly circumnavigate risks that may be relevant to a foundation as opposed to a personal investment portfolio; such as currency risk for foundations with operations abroad.
  • The need to remain current with regulatory requirements.

Another extremely important part of the charitable giving process is educating donors about their own giving habits. Many are unfamiliar with the multitude of options and strategies that may help with tax efficiency, and consequently improve their own estate plans. We strive to personally assist organizations in this endeavor, because in our experience, the additional time spent with donors very often allows us uncover more efficient strategies, which commonly results in donors making larger gifts. And in the spirit of the theme at hand, this extra effort is well worth our time.

Needless to say, charitable institutions have numerous challenges above and beyond traditional investing, and educating decision makers as well as donors is key to your success.