asset management assocates
Private Portfolio Management

   


 

It would give me great pleasure to know that my firm was able to help your charitable endowment or foundation achieve its objectives. As an investment advisor, most of our time is spent helping people help themselves. This represents and opportunity to be a part of  helping others in a worthy cause.

Many foundations manage their operation and their investments  by committee. Working with an advisor, the committee could still function and be in control of the portfolio while the advisor handles the day to day operation and oversight. The advisor's job is to make specific investment selections and adjustments and keep the committee updated and informed.

The best way to accomplish this is via the investment policy statement. It is important to establish investment guidelines up front. The investment policy statement would give both the board and the advisor guidelines for a well managed portfolio. It also puts the entire organization on a clear course of action and a way to financially manage its goals and direction.  Some organizations have policy statements that outline in detail how money is raised and how disbursements are made but skip over an actual investment policy.

The following are some of the questions that could be discussed at an initial interview.  

  • How is the organization set up? 501C4, 501C3? Is it a private foundation? A public charity? A service organization?
  • What are the long term objectives in terms of asset retention and growth?
  • What are the mandatory percentages that have to be distributed?
    1. Does the organization need to distribute a certain amount of dollars beyond its mandatory amount?
  • What are the constraints of the investments used?
    1. Are certain types of stocks excluded?
    2. Is there a socially conscious aspect to the investment selection process?
  • Are there restrictions on the disbursement of principal?
  • Exactly how is principal defined?
  • Can the growth component of the portfolio be accessed and spent?
  • What is the objective of the portfolio?  Growth, income, capital preservation or some combination?
  • Do you seek a specific amount of income for operating expenses?
  • What is the cash flow into the portfolio?

As an organization grows, the investment component becomes very significant. At some point, the investment component is raising more money than fund raising functions. It is important to develop not only a solid investment portfolio but a way to communicate the results of that portfolio effectively to those involved.

The type of investments that we use and the conservative platform that we work within makes this advisory service ideal for a board with a fiduciary responsibility. By using mainstream investment vehicles and well recognized brokerage firms to administer the organizations portfolio the board could be assured that they are getting the best type of service and security.

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