Case 2: Growing Liquid Assets Through Endowment Management
A growing nonprofit was sitting on a large cash bank balance that accumulated over years of successful fundraising. However, keeping the funds in a bank account was earning nothing in potential investment income. Nonprofit leadership’s objective was to be more proactive with its finances by ensuring that the organization:
- had appropriate cash flow in the face of an emergency and
- could fund specific long-term projects specified by the nonprofit’s board of directors.
After evaluating the organization’s financial condition, Fairlight provided the board and staff with nonprofit endowment governance principles.
The team then developed a cash management and investment strategy that reflected the organization’s funding needs to support the program and operational strategy. Once Fairlight implemented the agreed-upon investment approach, it facilitated ongoing investment reporting to ensure funds meet the philanthropic needs of the organization.
Fairlight also provides investment governance education to move the organization toward better financial oversight. Today Fairlight provides regular investment reporting and economic snapshots for effective board oversight of the endowment fund and will recalibrate the endowment if necessary to ensure optimum performance to meet objectives.
