Simple Investing for Nonprofits

The boards of small nonprofit organizations must make major investment decisions, but they are often flying in the dark.

Handling large amounts of money simply isn’t a risk-free proposition, and it can be difficult for those without a background in finance. “We probably get three or four calls a month from institutions that have $10 million to $30 million and don’t know what to do,” said D. Ellen Shuman, who oversees Edgehill Endowment Partners, which manages about $650 million in nonprofit money.

There is a simple answer, which works for many small institutions as well as for individuals saving for retirement. It is to put money into low-cost stock and bond funds, allocate the money appropriately and rebalance periodically. But the boards of nonprofits don’t always find this straightforward approach appealing for a variety of reasons, many of them psychological.