Non-Profit Investment Advisory
What You Should Know
Non-profit organizations have a fiduciary responsibility to prudently manage community assets under their control, which includes, but is not limited to, donations and investment funds. When individuals or committees of individuals are empowered by the organization with the responsibility to oversee the disposition of assets, they are mandated to perform their duties as a prudent person would. Among the duties that are required, is the Duty of Care, which is specific to seeking professional help to perform the activities that a specific party is either unable or unqualified to adequately perform.
Investment management is often delegated. However, for the organization’s designated decision-making person(s), fiduciary responsibility, and therefore liability, is always maintained. Since the intent of a gift or other financial award to an organization is specific to the sole interests of that organization and the intent of the donor, developing and implementing prudent decision-making policies and procedures that provide clear guidance regarding how to make investment-related decisions and how to perform ongoing supervision, is essential to not only making good decisions which are likely to improve results but also to limiting liability.
Choosing S.E.E.D. as Your Organization’s
Fiduciary Advisor for Investment Program Oversight
- We act as a third-party advisor to help your organization oversee its’ investment program.
- We provide ongoing assessments on portfolio management and IPS compliance.
- We make recommendations regarding investment selection, allocations, and other portfolio management-related topics.
- Your organization can continue to manage investments in-house or via an established relationship with your current Investment Manager.
- We help your organization limit liability by being a better fiduciary.
What it costs
We provide customized services to your organization’s unique needs, so our pricing for this service is customized as well. Contact us today for a customized proposal including a scope of work and pricing.
As your organization’s investment fiduciary, we provide customized discretionary investment management.
Socially Responsable Investing
Customized Investment Management
- S.E.E.D. views “risk tolerance” both as a condition of investing environment and by personal definition. Because of this perspective, it is our opinion that traditional questionnaires are inadequate. We believe that personal discussion and discovery with clients regarding their goals, biases, history, and competencies is the primary way to assess portfolio design.
- S.E.E.D. rebalances accounts twice yearly unless a lack of volatility creates a scenario where asset values have not “spread” from their targets. S.E.E.D. will periodically decide to remove, restrict, or add an asset class to manage risk per the client’s objective.
- S.E.E.D. uses fi360 for peer-to-peer ratings to filter potential investment options. fi360 is a leader in fiduciary management training and services. They provide a service that rates funds based on a significant amount of criteria including (but not limited to): underlying charges, management history, performance, style drift, audits, etc.
- S.E.E.D. uses a combination of strategies to develop its portfolio models including modern portfolio theory, efficient frontier, and a general effort to avoid speculation. To design and test these strategies, S.E.E.D. uses tools provided by fi360, Morningstar, eMoney, Charles Schwab, and our own research.
- S.E.E.D. generally has all dividends pay to cash in a portfolio. We then buy funds back into the underlying portfolio each time we rebalance. S.E.E.D. typically holds about 2% cash in portfolios. This is accounted for with a 2% reduction in the fixed-income portion of the portfolio’s allocation.
Investment Quality Review
fi360 is an independent, third-party fund review software. It provides analysis of metrics that include expense ratios/fees, performance relative to peers, and fiduciary scores, among other criteria.
Fund reviews and rankings do not guarantee future returns, but independent studies have indicated a correlation between funds scoring in the top quartile for one-year fiduciary scores and the top-performing funds in subsequent years.
Customized Investment Management
- The portfolio itself is designed in two specific parts: fixed income and individual stocks. The fixed income portion of the portfolio is generally comprised of mutual funds and ETFs (although if deemed necessary it can be individual bonds), while the equity portion of the portfolio is generally comprised of 15 to 20 different individual equities diversified across many individual industries such as: Leisure, Oil and Gas Refining, Restaurants, Utilities, Insurance, REITs, Packaged Foods, Tobacco, Asset Management, Beverages, Drug Manufacturers, Industrial Metals and Minerals, Telecom Services, Consumer Electronics, Internet Content and Information, Aerospace and Defense, etc.
- In the Customized Management Strategy, very few clients have the exact same holdings due to timing, investment goals, and tax situations.
- S.E.E.D. rebalances the accounts twice yearly unless a lack of volatility creates a scenario where asset values have not “spread” from their targets. S.E.E.D. will periodically decide to remove, restrict or add an equity position to manage risk per the client’s objective.
A Fundamental Approach to Investing
- A sustainable competitive advantage
- Growing free cash flows
- A dividend that grows with those free cash flows
- A strong balance sheet
Through our fundamental approach to investing, we help clients achieve their long-term goals by identifying companies we believe will grow their wealth over time.
Why Dividend Growth Matters
Building Customized Portfolios to Meet Your Income Needs
What does it cost?
S.E.E.D. provides ongoing investment management services. Investment services are offered at a charge of 1% (of the account value) per annum paid in quarterly installments on a per diem basis with a minimum fee of $10 per quarter. Non-profits may receive special discounts.
- Accounts under $100,000 are charged $150 per meeting (limited to 1 hour) for investment reviews. Accounts under $100,000 are not eligible for investment management alterations required to meet IPS or Investment Committee guidelines.
- Accounts over $100,000 (for a rolling period of 6-months or more) are charged at 50% of the regular investment management fee and receive 1 meeting at no charge (limited to 1 hour) per annum for investment reviews. Additional meetings are charged $150 per meeting (limited to 1 hour) for investment reviews. This fee is charged to the account unless prior arrangements are established.
- Accounts over $100,000 that are subject to IPS and Investment Committee oversight and require alterations of S.E.E.D.’s investment management programs do not receive any discounts as outlined above