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| *Ostroff, Fair and Company>>>Government & Non-Profit |
How does a non profit organization set up an investment policy? |
How does a non profit organization set up an investment policy? They usually have the finance committee research options or contract with a CPA firm/ or community foundation to handle that aspect. Several factors drive an investment policy 1.) Operating/Capital Cash flow requirements - determines liquidity and ROI (return on investment) requirements 2.) Endowment size (if its too small diversification may not be possible or may be too expensive) 3.) Growth potential through gifts/stock donations, etc... How much will you be adding to the endowment over time and at what interval? 4.) Risk toleration - self-explanatory 5.) Social/Advocacy Goals - are there mission-related investment goals or restrictions that will drive or limit the investment choices (i.e. non-smoking/alcohol/firearms, affordable housing, social ventures, environmental concerns, etc...) Make sure to consult your legal counsel and CPA. non-profit organizational management consultant |
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