What are the best practices for investing for a non profit?
March 31, 2010 4:59 PM   Subscribe

What are the best practices for investing for a non profit? Details about this particular situation inside.

I'm currently involved in a non profit that has about $100,000 in savings. Up to $30,000 of this would need to be semi-liquid once or twice a year to make purchases (these dates are known in advance). Currently, we keep our money in online banking accounts or short term CDs. We have a treasurer, but no one that knows much about investing. We would definitely want something fairly conservative.

My questions:

1) What are the best practices for organizations in situations such as ours? What do they do with their money?
2) If we should use an investment firm or something similar, which one(s) should we look at?

Other questions I've seen:
How do I invest $40,000 for one year for a non-profit corporation?
posted by christonabike to Work & Money (3 answers total) 2 users marked this as a favorite
Best answer: I'm the director of a small nonprofit (one million annual budget), we typically have between $300k and $450k in equity (depends on cash flow cycles).

I have established a long term relationship with a small local bank, to the point that one of the VP's sit on my Board.

I allow them to advise me as to where our accounts should be (one savings account, several checking/draft accounts for various purposes).

I am probably not getting the last dime out of our investments, I could probably put a lot of energy into researching various money market accounts, interest bearing checking accounts, CD's etc and squeeze another 1/2 percent by shifting from one bank to another every few months.

Bottom line.. My time is worth more than the extra earnings, I have someone I trust watching my accounts, I'm supporting a local business, and a number of people from that bank have become contributors to a level that is MUCH higher than the extra income I might earn at a mega national bank.

memail me if you want to chat...
posted by HuronBob at 6:49 PM on March 31, 2010

Its impossible to tell you what to do without knowing what your cash inflows are and where they come from.
posted by JPD at 7:52 PM on March 31, 2010

Agree with HuronBob - on that amount of money, considering the typical rate of return on CDs, T-bills, savings accounts, and so on, the difference in what you make isn't going to be worth spending a lot of time to investigate it and open the requisite accounts. Rolling it from CD to CD at your present bank is about as good as you're going to do. Of course the longer-term the better, but don't lose sleep over it.
posted by lakeroon at 10:40 PM on March 31, 2010

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