How do member foundations structure their investment management? Board or staff? Outside managers?

Small-staffed foundations tend to use one of five models for managing and overseeing their investments:

  • Board does it all model—The board develops the foundation’s investment policy, buys and sells assets, and monitors the foundation’s portfolio.
  • Board and small staff do it all model—The board and a small internal staff—in some cases, involving an internal chief investment officer (CIO)—develop the foundation’s investment policy, buy and sell assets, and monitor the foundation’s portfolio.
  • Investment manager model—The board (and key staff) hires investment managers to buy and sell assets in accordance with the foundation’s investment policy and directly oversees those managers.
  • Investment consultant model—The board hires an investment consultant to evaluate and hire managers to buy and sell assets in accordance with the foundation’s investment policy, and to oversee the managers in the foundation’s portfolio. Consultants also may help the board develop the investment policy in the first place.
  • Outsourced CIO model—The board (with assistance from key staff) hires a firm that offers a full range of investment services on a nondiscretionary or discretionary basis.

Read more in our publication Getting It Done: The Who and How of Small Foundation Investing >>

 

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