Carol cares deeply about land preservation. That is why she volunteered to serve as a trustee for a regional Land Preservation Trust in her county. Given her financial background, she also happily accepted the role as board treasurer and chairwoman of the finance committee. She knew these roles were ideal conduits for adding considerable value to the organization.
When she first examined the endowment portfolio statements she was quite dismayed. She discovered that the off-going treasurer had simply inserted his "investment guy" as the manager of the multi-million dollar endowment and that the portfolio contained a collection of broker-sold funds, separately managed accounts, small pieces of individual bond issues, and a handful of single stock positions. She could tell the investments were not the result of a thoughtful or well executed strategic investment plan, but seemed to represent a collection of investment ideas that have been "sold" to the investment committee over time.
She further discovered that the investment policy statement had not been revised in nine years, nor were its guidelines being followed by the current investment advisor. There existed no written investment plan signed by the board and their advisor to ensure that their assets were managed in accordance with fiduciary principles.
We met with the board and interviewed them regarding the purpose of the endowment, what it was built to accomplish, and to understand their vision for the funds and their organization. In that context, we designed a robust investment policy statement and endowment spending policy for the board which governed the guidelines under which the endowment would be managed.
We replaced the collection of legacy investments with a prudent, balanced, low-cost, and globally diverse portfolio using institutional-style investment tools. We paired that portfolio with a board policy for handling incoming and outgoing cash flows to ensure the endowment could support foreseeable future demands. We then consolidated their multiple accounts and improved the reporting process to allow the finance committee to focus on mission related concepts instead of having to spend hours second guessing their former broker's investment "ideas."
Financial Planning and Investment Management for Prosperous Individuals, Families, and Institutions.