As non-profits, endowments, and foundations, you are making a difference in our communities. Each one of you are dedicated to your mission of change, all knowing the coordinated team effort it takes. From the board of directors, executive team, staff, donors, and recipients to outside consultants and professionals – every individual, from the top down, plays a critical role in sparking the change.

Together, we are, and will be, serving our communities in need to instill positive change. The caveat is in the details of not what to do, but how.

• How will we serve those in need?
• How will we raise the funds?
• How will we ensure our organization, endowment, or foundation is sustainable to continue providing for the years and decades to come?
• How will we communicate and plan according to our fiduciary responsibilities?
• How will we live and fulfill our mission?

An overarching theme in each answer to those questions is your organization’s financial health and investment strategy. From operational expenses to evolving fundraising strategies, are you working smarter – not harder – when it comes to being financially sound?

That’s where an investment manager and financial advisor comes in. In recent years, the role of investment managers has evolved into including an advisory or consulting role. There’s an increasing emphasis on understanding the organization to make sound recommendations beyond portfolio returns, though that’s still as important as ever. 

The point is that having the right team supporting your mission is increasingly influential. Gone are the days of communicating stock picks and performance updates. This era of investing demands flexibility and planning with the help of tools to make smart decisions for your finances and endowment. So, how do you create a successful partnership with your investment manager?

What an Investment Manager Should Be… in 4 Expectations

Your organization’s investment manager should be a champion for your mission and its success. The relationship between your organization, board – specifically your investment committee – and investment manager needs to have your goals at the center.

With that in mind, these four criteria should be communicated to your manager to set the foundation of your expectations of the partnership. You should have advisors who:

1. Are active fiduciaries
   Investment managers, financial advisors, and non-profit boards and staff all must conduct themselves in accordance with their fiduciary responsibilities. This includes having a reasonable, fact-based process for making financial and investment decisions, grounded in careful analysis and investigation – with all decisions made in the best interest of the organization.
2. Are ready to workshop, together
   As your partner, they should be willing to spend the time on the details. Whether that’s explaining different portfolio options, outlining potential opportunities or hurdles, or presenting to your board or investment committee on the latest news and information so everyone is educated and on the same page to problem solve together.
3. Prompts you to ask, ‘What If?’
   Your board and committees should envision what they want to achieve, set a baseline around expectations for the future, and establish guidelines and policies designed to achieve the desired outcomes. But it’s also important to test this baseline by asking “what if”? Given the current, uncertain environment, this powerful question can help in your planning. Your manager and advisor should provide portfolio modeling and projection exercises to help your organization make confident and informed decisions.
4. Are accessible and ready to provide insight on an array of topics
   Your organization can’t be an expert in everything, hence why you leverage various partnerships with your board and staff and dig into niche topics to gain a better understanding of how an event can have trickle-down impacts on your organization (e.g., how inflation is impacting donor gifts).

Is Your Endowment and Foundation Getting the Full Suite of Services It Deserves?

Service	Average Investment Manager
Portfolio Management
Investment & Spending Design
Board & Staff Education
Fiduciary Monitoring
Fundraising Support
Trust & Fiduciary Services
Investment Research
Direct Access to, and Support from, Subject Matter Experts
Regular Insights and Meetings

How to Set These Expectations with Your Investment Manager

It starts from within your organization. Are your board and investment committee aligned and in agreement on the goals, objectives, and current results from your current manager? If not, it may be time to conduct an evaluation of other managers through an RFP. As a rule of thumb, an RFP should be done every 3-5 years either way.

To help with the evaluation process, download our free tools to guide your organization in the right direction, including an Investment Advisor Scorecard and Sample RFP.

The information in this paper is not intended as legal or tax advice. Consult with an attorney or a tax or financial advisor regarding your specific legal, tax, estate planning, or financial situation.