July 25, 2013
Nonprofits have goal-based strategies that board members decide on each year based on the levels of success achieved in the past year and their forecasts for the future. While many organizations may have lofty aspirations, a new study conducted by U.S. Trust revealed nonprofits are don't have high expectations this year due to donor funding in stress, a growing number of beneficiary needs and higher operational costs.
With other sources of funding in flux, nonprofit board members and top decision-members will have to alter their investment and spending strategies to be able to keep their organization's operations in order, according to the report. Furthermore, nonprofit executives in charge of finances should get a better idea of how the organization invested in the past to create for future plans.
"For the first time in years, perhaps decades, foundations, endowments and other nonprofit organizations question whether they will have the financial resources to continue to fulfill their missions," said Keith Banks, president of U.S. Trust. "To meet current and future needs, nonprofit organizations are urged to reach beyond traditional strategies and realign their approach to investing, spending and governance around the distinct mission and goals of their organization."
Learning how to invest is difficult for many nonprofit decision-makers because the state of the economy has been hard to gauge for the past handful of years. An article for The NonProfit Times reported on an SEI Quick Poll, which found organizations are trying to manage their level of risk against market volatility in their investments.
In fact, nearly three-quarters of nonprofits that took part in the 2011 poll reported making an effort to reduce their chances of pouring their funds into the wrong place.
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