If you don't see images, click here to view
Story Ideas  .  Events  
Facebook Twitter LinkedIn More...
  Subscribe for Free
To ensure delivery, please add newsletter@bisnow.com to your address book, learn how
Is Your Investment Strategy Normal?
May 21, 2013

Is Your Investment Strategy Normal?

It's a question every nonprofit and association asks. A study released this morning in Washington has some answers. (Normal is, of course, subjective, though can we all agree Skip in accounting was wearing shorts to work way too early in the season?)

NP study-dennis
Raffa Wealth Management surveyed over 150 associations and nonprofits about 2012. Raffa president Dennis Gogarty says the nonprofit sector is in good shape in terms of the percentage of its budget it puts into reserves. (The average is 60% to 80%) The average ROI lagged traditional indexes by 1% to 2%. Why might that be? Many organizations don't have investment guidelines and they reacted to market trends by moving around their investments. Some other findings: 38% of respondents lack guidelines on investment diversification; 30% of orgs made changes to their asset allocations in 2012, most to be more aggressive; and 70% reinvested all of their dividend income in 2012.
Bisnow (Sales2) Jumbo

NP study-photo 1
American Association of Immunologists finance director Todd Breach says it's critical to not overreact to market conditions like the 2008 financial crisis. He saw an organization with a $20M investment portfolio lose $3M when the market crashed. The knee-jerk reaction was to completely change its investments, which caused a lag in the portfolio's recovery. (We switched our cash hoarding location from queen size bed to twin bed. Our investments were safe, but it really affected our romantic relationships.) GuideStar CFO James Lum says this study should be the beginning of more transparency in the nonprofit world. He'd like to see more openness with revenue streams, grants, and the impact of the organizations.

NP survey-Matthew
The study results will be used by SOCAP International to determine how it should be making investments compared to its peers, says CEO Matthew D'Uva. The organization has traditionally relied on an investment adviser but Matthew says he'll look more closely at how organizations of a similar size invest. Another area to consider changing is how much the organization leans on its investment adviser compared to the financial committee and the board.

NP survey-ilana esterich
The Center for Strategic and Budgetary Assessments is a nonprofit and also a not-for-loss organization, jokes chief administrative officer/CFO Ilana Esterrich. So it's taken a more conservative approach to its investment strategy. When she joined the organization in late 2011, she set out to update its investment policy statement to make its portfolio more diverse, especially since the center relies primarily on government and foundation grants. In light of sequestration, Ilana says the center wanted to have less reliance on government, so bringing in more diversity helped improve ROI.

When Peer Pressure Works

bethesda mag-steve hull
Businesses in Montgomery County, Md., that give 2% of their operating income to charity, with a majority of it going to a Montgomery County cause can get a full page ad in every issue of Bethesda Magazine. It's a new initiative from the magazine's publisher Steve Hull and C.Fox Communications president Carrie Fox called Community Profits Montgomery. They felt there wasn't enough being done to recognize business that are helping in the community, so it's free to join the organization. So far 18 businesses have signed on.

cfox-Carrie Fox
Steve and Carrie say the group was modeled after the Minnesota Keystone program, which was launched in 1976 and has 400 members that include big corporations. Montgomery County is increasingly split between affluent residents and people in need of help, says Steve. Community Profits Montgomery will have its first event this week to highlight some of those community needs and how some businesses are giving back. Steve's long-term hope is that Community Profits Montgomery will encourage more businesses to meet the 2% threshold.

IRS Fallout: Nonprofits Worried About Image

nonprofits-tim delaney
The recent IRS scandal regarding tax-exempt status for nonprofits has the industry concerned about image. National Council of Nonprofits president Tim Delaney says sure the issue will distract Congress from the tax reform the industry has been waiting for. But more importantly is a concern that the work of nonprofits will be affected by all the media coverage. Most news stories have the terms "political scandal" and "nonprofits" within striking distance of each other. The organization is on a mission to remind the public (namely the media) that "federal law is crystal clear that 'charitable nonprofits,' which are tax exempt under section 501(c)(3) of the Tax Code, may not lawfully engage in partisan political electioneering." 

Girls on the Run

GOTR-spring 5k
We not only write about nonprofits, occasionally we're part of them. Bisnow editor Tania Anderson and her 9-year-old daughter, Alexandra Harbourt, ran in this weekend's Girls of the Run Northern Virginia 5K race at Bull Run Regional Park. Nearly 10,000 other elementary age girls and their buddy runners walked, ran, and sprinted their way to the finish line. The nonprofit teaches girls about fitness and health and trains them over a few months to complete a 5K. 

Say you win the $590.5 million Powerball jackpot. Lump sum or payments? Go public or stay private? Tell Bisnow's Tania Anderson.

Subscribe for Free

Artisphere ASSOC
Cardinal (Cook2) ASSOC
Buchanan Ing (One) ASSOC
Currys (Service) ASSOC
eTouches (Mobile) ASSOC
RMA (Bizwomen4) Assoc
CONTACT EDITORIAL                             CONTACT ADVERTISING                              CONTACT GENERAL INFO


This newsletter is a journalistic news source which accepts no payment for featured interviews. It is supported by conventional advertisers clearly identified in the right hand column. You have been selected to receive it either through prior contact or professional association. If you have received it in error, please accept our apologies and unsubscribe at bottom of the newsletter. © 2013, Bisnow LLC, 1817 M St., NW, Washington, DC 20036. All rights reserved.