Aug 25 5 Reasons Not-for-Profits Should Contact a Wealth Advisor
You probably know that for-profit companies and high net worth individuals often work with wealth advisors to not only maintain their assets, but grow them. What you might not know is that nonprofit organizations also frequently work with wealth advisors for the exact same reasons.
Take a look at the following five scenarios where a nonprofit organization can benefit immensely from working with a wealth advisor:
Your Organization Does Not have an Investment Policy Statement
An investment policy statement is a set of guidelines regarding your organization’s assets, investments, goals, and allocations. Think of it like a constitution for your organization’s investments and assets—it’s not a strict set of requirements, but a living, centralized document that states your organization’s goals and the processes you and any financial planner you work with will follow to meet those goals.
It also includes your organization’s investing history. Whenever a question arises about why the board chose to make a certain investment or how the organization’s resources have been allocated at different points since its inception, your investment policy statement typically contains the answers. An investment policy statement can be quite granular, but overall, it’s focused on the big picture of how, where, and why your organization is using its financial resources.
You Hold a Lot of Uninvested Cash
When you’re holding a large amount of cash, you’re potentially missing out on earning significant returns.
That said, you can also miss out on significant returns if you don’t know how to invest that cash in a way that supports your goals. So it’s very easy to find yourself in a position where you have a lot of cash on hand, but you don’t want to make mistakes and potentially lose it, so it just sits there, uninvested and stagnant.
A financial advisor can develop a customized investment strategy for that money that fits your goals and your organization’s risk tolerance.
Your Organization Never had an Endowment or Investment Account Before
If your organization has never had an endowment or investment account, the time to start investing is now. A financial advisor can advise your organization on the best way to set up this account and how to fund and invest it strategically, reducing your risk level to one appropriate for your organization.
You’re Looking for Unbiased, Objective Financial Guidance
Providing objective, goal-oriented financial guidance is a wealth advisor’s job. When you work with a professional wealth advisor, you can trust that they’re acting in your organization’s best interest as they develop strategies and create investing plans.
It’s not uncommon for nonprofits to stay in the lean-budget startup mentality long after they’ve outgrown the need for it. That can drive leaders to make decisions that aren’t necessarily in their organizations’ best interests. As somebody outside your organization, a professional wealth advisor has the distance needed to look at your organization’s current financial picture and future goals completely objectively.
You Want a Holistic View of How your Organization’s Investments Fit into your Daily Routine
Financial planning is more than managing numbers. It’s navigating the micro and macro factors that impact your organization’s daily operations to ensure that its assets are protected and that you can continue to work toward your goals.
Donations are often a significant part of a nonprofit’s financial makeup, and a wealth advisor can make it easier for donors to continue supporting your organization. One way they can do this is by making it easy for donors to donate stock shares directly to your organization’s brokerage account. Going beyond this, an advisor can also help when your organization needs to dip into its investments in order to free up cash by strategically determining where to pull it from and how to replenish that account later.
Work with a Multidisciplinary NY/NJ Wealth Advisor
Sax Wealth Advisors, Sax LLP’s wealth management arm, takes a “whole picture” approach to advising. That means that while they look at your organization’s investments and goals, that’s not all they look at. They consider factors like your long-term and short-term goals, your risk tolerance, trends in your field, and more to empower you to make the most financially sound decisions for your organization.
Ready to learn more about how we can help you manage your assets and reach your goals? Contact Sax Wealth Advisors today to schedule your consultation with a member of our firm.