If you’re a nonprofit that doesn’t know how much you pay your finance company for managing your investments, you’re not alone. A recent study found the vast majority of nonprofits have no idea what they pay in fees, which means it could be too much. (Fees are negotiable.) The discovery was part of Raffa Wealth Management’s Study on Nonprofit Investing. Study co-author Dennis Gogarthy also found that nonprofits’ investment portfolios lagged by as much as 6.5% compared to traditional benchmarks. They performed worse when the portfolio was more growth oriented and had more alternative investments. Another takeaway: Associations that have investment targets and stick with those targets performed better. Dennis says, “Tinkering with your investments doesn't help.”
Paying Too Much Without Knowing It?
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