Top 10 Nonprofit Investment Priorities

An SEI Quick Poll released Thursday found that nonprofit finance executives say their highest investment priority for 2011 is to make asset allocation changes focused on downside risk protection. Four out of five poll participants (82%) view this as a priority for the year, with 76% of that group identifying it as a "high" or "extremely high" priority.  Additionally, nearly 40% of respondents said their organization is open to including an outsourced investment provider in their next search for consultative services. 

"Nonprofit investment committees are tasked with an enormous set of responsibilities in a very complex investment environment," John Paul Cavaliere, senior analyst for nonprofit advice for SEI's Institutional Group, said in a statement. "The increased trend of nonprofits looking at outsourced investment models is a direct result of committees looking for ways to delegate some time-consuming investment functions to allow for a greater focus on risk protection and return enhancement."

More than three-quarters (79%) of all participants said finding ways to best make asset allocation decisions in conjunction with organizational finance decisions is a priority. The largest percentage of poll responses (17%) said this was an "extremely high" priority.

The top 10 priorities are:

  1. Make asset allocation changes focused on downside risk protection
  2. Find ways to best make asset allocation decisions in conjunction with finance decisions
  3. Attempt to decrease volatility by increasing portfolio diversification via new asset classes
  4. Define investment management fiduciary responsibilities for trustees and investment consultant
  5. Add hedging strategies to the portfolio
  6. Gain additional transparency from investment managers
  7. Immunize a portion of the portfolio to support spending policy needs
  8. Find ways, such as investment market simulation tools, to best evaluate the effect of potential investment market changes on the invested assets
  9. Add or increase allocation to inflation protection strategies
  10. Implement ways to increase donor confidence in your investment strategies

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