Investment Management for Churches and Faith-Based Organizations
Quoted in:
Stewarding the generous gifts of your congregation and community is a high calling but often…
Leaders get stuck facilitating their investment committee without professional experience
Investment programs are not managed to institutional standards, often with few or no concrete investment objectives
Organizations have no visibility to performance against goals or market benchmarks; if you aren’t progressing towards a goal, what’s the point?
We understand the unique challenges of organizational investing. We have the expertise and experience to help your team overcome obsticles and build a successful investment program.
Common Investing Challenges for Faith Based Organizations:
“Slow as Molasses” Governance Structure
Often governance is simply a group of people from the broader board without a formal process for making investment decisions. That results in frustration for leaders that can’t get things done, and worst of all, no decsions at all when consensus can’t be reached. Sound investment policy and proven committee processes can make your investment committee purposeful and efficient.
Lack of Focus on Asset Allocation
Asset allocation is the mix of stocks, bonds and other major types of assets in your portfolio. Simply being invested and having the proper asset allocation determines more than 90% of your investment results. Yet often organizations don’t have an asset allocation or the existing allocation does not align with their goals. Getting this right is the most important investment decision the committee will ever make.
Under-Developed Investment Policy
Your team probably does an excellent job at planning and executing to fulfill your mission. Yet your investment plan is more “hopeful” than objective. A well-documented investment policy is critical to long-term success. It establishes objectives and plans that extend beyond any one person. Investment policy helps ensure you stick with your program in difficult circumstances. Well established investment policy should provide you with a high degree of confidence that you will acheive your financial goals in support of your broader mission.
High Fees AND Lack of Transparency
Core U.S. large cap stock investments should cost less then 0.05%. Our view is that portfolio management, consulting and underlying investments should cost less than 1.20%. We often see portfolios that cost 2% or more when all fees are considered. Those extra fees add up to hundreds of thousands of dollars over many years. That’s programs that don’t happen and staff that are not hired - all because fees are simply too high.
No Performance Tracking
Forget poor performance, often we find that organizations do not even know how their results compare to the appropriate benchmarks. Are you receiving value for your management fees? You should be reviewing performance of the total portfolio and underlying investments at least once a year to build confidence in your approach. If you don’t know what your benchmarks are today, ask your manager for clarity.
Our Professional Approach
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We will get to know you and ask questions to understand your objectives and unique situation. If we both agree there is a fit, we will schedule a follow-up discussion to lay out a clear path forward. We can also review your RFP if you have one written. No pressure and no obligation.
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What are your goals? How will your resources enable you to accomplish your mission? What are your short-term and long-term cash flow needs? How should you balance investing in ministry with saving?
We roll-up our sleeves and guide your team through the process of developing investable goals and objectives. We use digital tools to assess the risk tolerance of your individual committee members and the group as a whole. The workshop output is used to craft your unique investment policy statement
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We build a plan to align your existing assets with the investment program developed in your workshop. Once the board approves the plan, we will implement the investment program. We rebalance and make investment decisions as needed. At least once a year, we meet with your investment committee to review performance and make updates to your strategy.
