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Navigating Your Non-Profit's Long-Term Investment Objectives for Maximized Return

Non-profit organizations are innovative and efficient.   Whether it is successful mission delivery, adapting to ever-changing funding models and market forces, or stepping up to answer the calls from their communities to address pressing challenges and opportunities, non-profit organizations must be agile and responsive to the often-unseen path ahead.

A non-profit organization’s approach to the investment of its assets should be equally agile and adaptive. But how do you apply a proactive strategy when staff is stretched thin, and the stakes are high?

Determining Long-Term Investment Objectives

A non-profit's investment assets are a promise of forever. The ongoing, successful oversight of the investment portfolio supports organizations as they navigate the path ahead. A path that requires meeting their mission and serving constituents, while also looking to the future. All along the way they must be mindful of those who travel with them as they seek to instill confidence in donors who have made critical investments in the long-term success of the organization. As you consider how best to position the non-profit endowments you oversee, you want to use the best resources available to assist in this work. An Outsourced Chief Investment Officer, or OCIO, may serve as a strategic addition to your team as you seek to maximize your time, resources, and investment performance. OCIOs can be a trusted partner bringing an exceptional level of expertise and dedication to the management of your portfolio through the application of best in industry talent, technology, data, and strategy.

Mapping Endowment Success via OCIO

Perhaps it's easiest to think of navigating non-profit endowment and foundation management as a long journey. You know where you are and have explicit goals of where you want to go.   But what is the best way to get there?

Many institutions are using the same models and tools investors have depended upon for almost 70 years. Basing all your investment decisions on historical models is like pulling out an atlas to find the quickest route to your desired destination. The world is different now and we need different tools to guide us. Modern navigation utilizes satellite imagery, traffic projections, real time road conditions, artificial intelligence, and event-driven analysis.  Leveraging the partnership and resources of an OCIO can elevate the management of your portfolio from a road map to top-of-the-line GPS technology.

  • Precise Location: Many investors use Modern Portfolio Theory to develop mean-variance analysis to guide current decisions. While this is a helpful tool, historical models don’t tell you where you are now and don’t consider the road ahead. An OCIO can help determine your portfolio’s precise location today and choose the best route to get you where you want to go.

  • Clear Destination: Your dedication to creating forward-thinking investment strategies will deliver on the promise of your organization’s mission for generations to come. An OCIO works as an extension of your team to develop precise, quantifiable goals for your institution that are supported by scenario planning and stress testing so when roadblocks arise, you are prepared to navigate them successfully. This involves open, innovative discussions around your specific requirements including spend rate, growth goals, liquidity needs, and risk tolerance. This level of strategy and preparation offers your organization the asset of time and the opportunity to focus on the work at hand, knowing the organization is traveling towards its desired destination.

  • Intelligent Routing: OCIOs are focused on the road ahead using comprehensive data points, forecasting, and models. By combining knowledge of fact patterns and market environments with various market assumptions, your OCIO will have a variety of alternative routes at the ready, so your non-profit's endowment can be as flexible and agile as the work of your organization. Additionally, your team or committee leadership will not have the ongoing responsibility of preparing for each possible path ahead. You have a trusted partner providing you with well-informed directions.

Partnering with an OCIO allows you to take advantage of best-in-class resources without taking your eyes off the road. As an OCIO, the Verger team includes skilled investors dedicated to developing resilient, antifragile portfolios designed to weather all market environments and support the perpetual needs of non-profit organizations. Verger sees ourselves as part of your team. We are committed to sitting next to you for the entire journey to provide timely, responsive options and opportunities as you adapt to an ever-changing market environment.  

Here at Verger, we hope you will take us along for the ride.

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