Areas of Specialization: Non-Profits

John Wesley, the 18th century evangelist was quoted as saying. “Do all the good you can, by all the means you can, in all the ways you can, in all the places you can, at all the times you can, to all the people you can, as long as ever you can.” Charitable giving has always been a part of the American culture. According to the National Center for Charitable Statistics, in 2000, individuals donated $152 billion dollars to charitable causes. In addition $16 billion was giving through bequests at death, $11 billion by corporations, and $25 billion by foundations.

Wikepedia defines a non-profit organization as “an organization whose primary objective is to support an issue or matter of private interest or public concern for non-commercial purposes. Non-profits may be involved in an innumerable range of areas relating to the arts, charities, education, politics, religion, research, sports or some other endeavor.”

When we donate our money to non-profits we expect that the organization is acting responsible and is managing its assets prudently. Unfortunately, in recent years even some highly regarded non-profits have found themselves the target of negative press because of ethical lapses or slack practices.

At Ely Prudent Portfolio we believe that many, if not most, trustees, board members, officers, administrators or other decision makers of non-profit organizations are not fully aware of their fiduciary duties and do not have adequate procedures in place to make sure that their investment assets are prudently managed.

The Center for Fiduciary Studies, at the University of Pittsburgh, is aware of this problem and is working with other organizations to define the details of a prudent investment strategy. According to the Center, a fiduciary is an “investment steward” who “is responsible for managing the overall investment strategy: deciding on the asset allocation, defining the details of the strategy, implementing the strategy with appropriate Investment Managers, and monitoring the strategy on an ongoing basis.” To help investment stewards they have established 22 Practices which are intended to provide the framework of a disciplined investment process. The Practices are organized under a four-step Fiduciary Quality Management System. The steps are organize, formalize, implement, and monitor.

Because our lead advisor, Mr. Ely, has been through the program at the Center for Fiduciary Studies and has received his Accredit Investment Fiduciary Analyst^TM designation, he is able to help members of non-profit organizations assess their conformity to the Practices of fiduciary care.