How the Most Successful Foundations Cover Their Asse(t)s

When you serve on the board of a non-profit, you have one specific fiduciary duty: to guide the strategic operations of the organization so it can run efficiently, effectively, and responsibly.

While the duty is specific, achieving that aim is the product of many steps, processes, and functions. It requires, at minimum:

  • A deep knowledge of the governing documents (state and federal laws and regulations, including those surrounding tax and employment) and how the operating documents (board manuals, bylaws, and rules) adhere to them.
  • A clear understanding of the difference between the use of “may” and “must.”
  • An active commitment on behalf of each board member to act within the confines of the organization’s legal documents and to participate fully in their responsibilities in the best interest of the non-profit.
  • A thorough grasp of the assets available and their most effective use.

As a board or staff member at a charitable foundation or endowment, you play a key role in serving the need and fulfilling the mission of your charitable organization both now and in the future. In addition to the above list, board members must also look ahead to ensure asset allocations are both protected, performing, and secure.

Because financial assets play a critical part in the health and longevity of your cause, the question isn’t when but how often they should be reviewed. Doing so protects against avoidable loss and raises awareness and education of the funding that is vital to the growth and longevity of your organization. When you review your current assets, pose the following questions:

  • Have we diversified our portfolio across a mixed class of assets?
  • Given today’s market, should any asset be invested differently? Do we have a process in place for replacing investments?
  • How would our donors feel if their gifts were to be significantly impacted by a market decline? Are we stewards of that money or speculators?
  • Are we better off leasing or owning our buildings?
  • Have we worked on estate planning with our major donors?
  • Are we happy with our level of donor-participation?

Our unique Foundation & Endowment Report Card asks these and many more in-depth questions to help determine how well your foundation’s or endowment’s assets are being managed with respect to prudent fiduciary practices.

Download Foundation & Endowment Report Card now.

Strong governance policies, ongoing education, sustainability, and accountability are the marks of successful foundations and endowments, especially ones that intend on making a lasting, positive impact on communities for years to come. Your organization can be one of them if your fiduciary processes are managed appropriately.

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