Investment Ideas for Not For Profit
Have a client that is a not for profit. Have 3mm in assets. They are risk adverse, so they say, but do take risk. They buy CDs out of Firm. Have big cash position with me and they are looking for ideas.Should I approach them differently then I would a natural client regarding investing, or do you think I should invest for them the same way I would anyone else? Thanks.
Have you asked them to put together an investing mission statement. Not sure that is the right term, but something that spells out what you can and cannot invest. Most nonprofits need something like that. If I was a donor, I would want to know exactly what the nonprofit could or couldn’t do.
Investment Policy Statement. Every wirehouse and most mutual fund companies will give you an example. Help them write the IPS then offer to manage the funfd to that statement. FYI…Never done it myself but that’s how I would start!
Oh yeah…and don’t take the “policy” from one guy on the board. Everyone sigsn it and you should present it’s meaning to them. Yiu don’t want some bozo expert saying “i told you to buy Cocoa-Cola”, etc.
[quote=frumhere]Have a client that is a not for profit. Have 3mm in assets. They are risk adverse, so they say, but do take risk. They buy CDs out of Firm. Have big cash position with me and they are looking for ideas.Should I approach them differently then I would a natural client regarding investing, or do you think I should invest for them the same way I would anyone else? Thanks.[/quote] With tht type of account - I am surprised that they don't already have an IPS. You need to ask. Depending on the organization, there may be restrictions on investing in certain kinds of investments or companies (i.e. tobacco, firearms, etc.) Most Non Profit IPS's (that I have been associated with) have an investment objective of principle protection with long term growth. If you don't have a copy of the IPS - then I am assuming that they did not entertain bids for fund management. As mentioned earlier - before you begin investing - discuss and get signoff from the entire board. And be sure that they know exactly what the pricing will be. The foundations that we manage are typically priced between 60 -80 bps.
Damn, I at least expected one "Ba-dum bum!" from the peanut gallery.
Non-profit, huh? Putnam sounds about right.
Just got off the 30 minute call with organization and accountant and I think I nailed the conversation with all of your help.