A board member of a nonprofit serves an important role in the oversight and responsibility of the organization. This guide includes 4 key areas board members should focus on regarding the oversight of an organization’s investment program.
A Board Member's Guide to Investment Oversight
Making certain your organization has adequate financial resources is a key component of your responsibility and can be tied directly to the oversight and success of your investment program. So what specifically is your role in oversight of the investment program?
Structure Ensure the organization has the proper structure for oversight of the investment program. For many boards this means establishing an oversight group (typically a finance or investment committee) of qualified individuals. As a board member you want to spend time recruiting financially savvy members that have the background to most effectively oversee the investment program.
Hire Advisors Your board or oversight group should not be selecting the individual investments, but rather recommending the selection of an investment advisor or consultant to the board. Selecting an advisor who will act in a co-fiduciary manner ensures that the organization’s best interest will be put first. The selection of an advisor should be undertaken with care and may involve issuing a Request for Proposal to several qualified advisors.
Review Performance Your oversight committee should be regularly (quarterly) reviewing performance and monitoring compliance with the investment program’s policies. Ideally, a summary report is shared with the board on a quarterly basis and a presentation from the oversight group and advisor is made to the full board on a semi-annual or annual basis.
Ensure Adequate Records are Kept Turnover of board members and committee members is something all nonprofit organizations experience. Your board should have all policies in writing and appropriately archived. This helps newly recruited members understand the governance structure and policies that are in place. Additionally, maintaining good records of past investment decisions, performance, and portfolio structure allows board members to feel confident the program has been properly managed. Storage of these critical documents should not be on an individual computer or file cabinet, but rather on a cloud based document management system.
Roles Within Your Organization & Investment Advisor
Understanding how your organization works together with investment professionals helps ensure everyone is on the same page and your oversight requirements are being met.
eCIO helps nonprofits across the country manage low-cost investment programs. If you’d like to learn more about how eCIO could help your organization, contact us at email@example.com or by phone (608) 291-4646.
Download a PDF version of this guide.
We're investment advisors for nonprofits. Questions about your investment program?
eCIO, Inc (“eCIO”) is a registered investment adviser located in Madison, Wisconsin. eCIO may only transact business in those states in which it is registered, or qualifies for an exemption or exclusion from registration requirements. eCIO’s web site is limited to the dissemination of general information pertaining to its advisory services, together with access to additional investment-related information, publications, and links. Accordingly, the publication of eCIO’s web site on the Internet should not be construed by any consumer and/or prospective client as eCIO’s solicitation to effect, or attempt to effect transactions in securities, or the rendering of personalized investment advice for compensation, over the Internet. Any subsequent, direct communication by eCIO with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides. For information pertaining to the registration status of eCIO, please contact the state securities regulators for those states in which eCIO maintains a registration filing. A copy of eCIO’s current written disclosure statement discussing eCIO’s business operations, services, and fees is available at the SEC’s investment adviser public information website – www.adviserinfo.sec.gov or from eCIO upon written request. eCIO does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to eCIO’s web site or incorporated herein, and takes no responsibility therefor. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.
This website and information are provided for guidance and information purposes only. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy. This website and information are not intended to provide investment, tax, or legal advice.
Ask an Advisor a Question
Have a quick investment question?
Submit a question and a nonprofit advisor will respond promptly.