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A clearer, more reliable way to track pooled funds within a single investment portfolio
Many nonprofits manage multiple funds or endowments within a single investment portfolio. Whether it’s donor-restricted funds, board-designated reserves, or quasi-endowments, the challenge is the same:
How do you fairly track each fund’s share of the overall portfolio?
For many organizations, the answer has been spreadsheets.
Many nonprofits rely on spreadsheets to track funds within an investment pool—and for good reason. They are flexible, familiar, and easy to implement, particularly for organizations managing a smaller number of funds.
But as complexity grows and leaders turn over, spreadsheets can become more difficult to maintain with confidence.
Common challenges:
What works well for a handful of funds can become difficult to maintain as complexity grows.
For organizations managing multiple funds, this often signals the need for a more structured approach.
Subaccounting is a method used to track individual funds within a pooled investment portfolio. Each fund owns a portion of that pool, represented by “units,” similar to shares in a mutual fund.
This allows multiple funds to participate in a single investment portfolio while still maintaining separate ownership and reporting.
A nonprofit has three funds invested in a single portfolio:
Each fund owns units in the pool based on the value of its investment. As the investment pool changes in value, the unit value changes as well.
Investment Growth
If the portfolio grows by 10%, the unit value increases to from $10.00 to $11.00:
Each fund participates proportionally in the portfolio’s performance based on the number of units it owns.
Adding a Contribution
Assume Fund B contributes an additional $10,000 during the month.
At month-end, the investment pool is valued and the unit value is determined to be $11.00.
Fund B purchases additional units at that value:
Updated Pool Value: $1,110,000
✔ Each fund participates in performance proportionally
✔ Contributions and distributions are incorporated fairly at the current unit value
✔ No manual recalculations across funds are required
A structured approach to subaccounting helps nonprofits:
As part of our nonprofit investment hub, we have built a subaccounting feature that allows organizations to track underlying funds within a pooled investment portfolio—without relying on spreadsheets.
What this enables:
Subaccounting is an important function for nonprofits managing multiple funds within a single portfolio. While spreadsheets can serve as a starting point, they often become difficult to maintain as organizations grow.
A more structured approach can help organizations:
Download our Subaccounting Readiness Checklist to evaluate whether your organization may benefit from a more structured approach to fund tracking.
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