Nonprofit Investment and Development Solutions, + Website

ROGER M. MATLOFF, CFM, CIMA®, CAP®, CRPC®, is a senior vice president and institutional consultant at a major financial institution. Working with the team he founded in 1983, Roger creates sustainable strategic solutions for nonprofit organizations around the country. In his current role, he oversees the analytical, investment, and management programs that the team's foundation and endowment clients utilize. In his capacity as a consulting and investment expert, Roger has appeared on national television news programs and been cited in such national publications as the Wall Street Journal and Research magazine as well as numerous international publi-cations focused on serving the nonprofit market. JOY HUNTER CHAILLOU is a Senior Vice President and Senior Nonprofit Advisor for a major financial institution. In her current role, she serves as an advisor working with nonprofit organizations of all sizes to increase their organizational capacity and help them reach their goals by offering in-depth strategies and tailored solutions, providing them with the knowledge and resources needed to address the challenges they face as they pursue their mission and impact goals. Joy's advice and consultation focus is in the areas of governance, development strategies, staff training, and board education.

• Preface: Here We Are ixBackground: Where We Have Been xMultiple Factors xThis Book’s Setup xiiiAcknowledgments xvCHAPTER 1 Philanthropy History and Statistics 1American Philanthropy 1Examining the Statistics 3Summary 5CHAPTER 2 Fiduciary Responsibility 7What Is a Fiduciary? 7What Are the Duties of the Fiduciary? 8Pressure on Fiduciaries from Increased Volatility 9Protecting the Assets—The Prudent Investor 10Training and Education of Fiduciaries 12Increasing Government Regulation 14Protecting the Mission 15Effective Use of Professional Consultants 17Valuable Resources 17Summary 19CHAPTER 3 New Roles for the “New Reality” 21The Investment Consultant 22The Investment Committee 24Fundraising and Finance 24Investment Policy Statement 28Summary 30CHAPTER 4 Behavioral Finance 31The Psychology of Investing 32Behavioral Factors and Investing 33Psychology and Decision Making 34The Psychology of Group Decisions 39Behavioral Finance and Investment Consulting 41Summary 44CHAPTER 5 Understanding Risk 45The Individual and Risk 45Biases 46Investment Committee Psychology 46Risk and the Fiduciary 47Group Dynamics and the Nonprofit 48The Theory of Groupthink 49The Blind Risk Model 52Understanding Individuals—Gathering Information 53Assessing the Power on the Investment Committee 54Completing the Process 55Summary 57CHAPTER 6 Asset Allocation 59Asset Allocation Analysis 59Types of Risk in Asset Allocation 60Risk and Portfolio Performance 62Preparing for Asset Allocation Analysis 64Summary 68CHAPTER 7 The Investment Policy Statement 71The Elements of an Investment Policy Statement 71The IPS Provides Essential Discipline 73UMIFA and UPMIFA 75IPS and Investments 78The IPS and Asset Allocation 79The IPS and Risk, Return, and Money Manager Retention 80The IPS and Major Donors 81Summary 82CHAPTER 8 Money Manager Selection 83The Goal 83Outlining the Process 84Step 1: The Search 85Step 2: The Evaluation 86Step 3: The Analysis 87Step 4: Selection 93Summary 94CHAPTER 9 Dynamic Portfolio Optimization 95Before Modern Portfolio Theory (MPT) 95Modern Portfolio Theory 96The Efficient Portfolio 99The Mean-Variance Model 99Dynamic Asset Allocation and Market Timing 100Summary 101CHAPTER 10 Investment Program Analysis 103Monitoring Accounts 103The Procedure 104Assessing Money Managers 106The Evaluation 109Summary 110CHAPTER 11 Socially Responsible Investing 111The Roots of Socially Responsible Investing 111What Exactly Is Socially Responsible Investing? 113How Do We Accomplish Socially Responsible Investing? 115The Risks of Socially Responsible Investing 116Additional Means of Accomplishing SRI 118Why Does a Nonprofit Implement an SRI Portfolio? 119Summary 120CHAPTER 12 The Changing Landscape for Fundraising 121Our New Reality 121Donor Motivations 122Communication Strategies 124Revenue Source Diversification 125The Strategic Development Plan 127Understanding Donors 128Effective Communication Tools 130The Case for Support 131Measuring Programmatic Impact 133The Strategic Development Planning Process 134The Importance of Planned Giving As a Strategic Development Tool: Building Endowment withPlanned Gifts 136Donor Values That Affect Their Legacy Giving 138Summary 140CHAPTER 13 The Evolution of Donors—Trends and Truths 143The Modern Donor 143Transformations in Giving Patterns 146Growing the Donor Pool 151Summary 159CHAPTER 14 Growing Expectations 161Resources 162Two Key Measures of Financial Health 165Financial Ratios 171Integrity and Credibility 173Summary 174Conclusion 175About the Companion Website 177About the Authors 179Index 181