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In the world of investment management, nonprofit fiduciaries are faced with trying to decide how to best manage their investment program. Do they build something custom themselves, which can take quite a bit of time, be expensive, and require them to source the right team? Or do they undergo a search to find and purchase the right solution for their organization?
Many organizations manage their investment program by retaining the services of a consultant to provide strategic guidance and manager selection and delegating the responsibility of investment management to their investment committees and staff. It requires you to have the necessary resources in-house to effectively implement and manage the consultant’s advice. However, many nonprofits don’t have the budget or resources to do this. And many investment committees aren’t spending their time where they should be to effectively drive returns.
Most investment committees are convinced that they are spending their time on the highest priority items. However, when you look at the above data, we see that investment committees are spending far more time reacting and looking at the past than making strategic decisions that can materially impact performance going forward.
I encourage nonprofits with under $500 million in their investment programs, or those with limited staff resources, to consider a buy solution, like those offered by an outsourced chief investment officer (OCIO).
Partnering with an experienced provider who can add value by helping you make and implement those strategic decisions allows your team to spend its precious committee meeting time on the strategic decisions that can account for up to 80 percent of your success.
Read the full article on investment program oversight by Angie Santo-Walter at BoardSource.