Serving on the investment committee of a non-profit board can be a powerful way to contribute to the organization’s success. This role, however, is not one you should take lightly—as stewards of the organization’s assets, the investment committee directly affects an organization’s ability to fulfill its mission.
If you are considering joining an investment committee, ask yourself these questions to discern whether this role is a good fit for your experience, personality, and skillset.
Even if you don’t have this experience, you can still be a valuable contributor to an investment committee by bringing a diverse perspective.
1
The investment committee, along with the organization’s consultants, answers complex questions related to asset allocation, selecting managers and consultants, and evaluating investment opportunities. Thus, it’s important for most of the committee members to have some professional investment experience and/or previous involvement serving on an investment committee. Even if you don’t have this experience, you can still be a valuable contributor to an investment committee by bringing a diverse perspective, provided that your fellow committee members have an adequate amount of professional investment experience.
2
Before each quarterly meeting, consultants will deliver reports on the performance of the organization’s managers and assets. Investment committee members need to read and understand these reports—while identifying areas that need more explaining—ahead of time so they can fully engage in the discussion at that quarter’s meeting.
3
Committee members need to view the organization’s portfolio through the lens of an institutional asset manager, not a retail investor. This means thinking in terms of generating returns in the context of the organization’s spending needs, liabilities, and capacity for illiquid investments.
4
Members need to be open-minded about the ideas presented by consultants and other members of the investment committee. When topics arise that members don’t understand, they need to ask questions and be willing to challenge the assumptions being made by others in the room.
5
Committee members need to ensure that they are fully aligned with the organization’s mission, values, and objectives. An important aspect of this is making sure that you don’t have any personal or professional interests that conflict with the organization’s.
Learn More About Effective Investment Committees: To dive deeper into an investment committee’s responsibilities and the best practices of successful committees, download our e-book, Non-Profit Board’s Guide to Building an Effective Investment Committee.
