Big Nonprofit Ideas for the Other 95%
Compliance. Board relations. Fundraising. Technology. Volunteer management. Accounting. Finance. Marketing. Social media. Investments.
Every nonprofit faces these issues and big nonprofits have experts in each. Small and medium size nonprofits have Tony Martignetti Nonprofit Radio. Trusted experts throughout the country join Tony to take on the tough issues facing your organization.
Episode 12 of Tony Martignetti Nonprofit Radio for October 1, 2010
Maria Semple, The Prospect Finder.
“Go Beyond Google: Gourmet Prospect Research on a Goulash Budget
Tips on free prospect research resources to know your existing donors better and find new ones”
Cathleen Rittereiser, co-author, “Foundation and Endowment Investing”.
Everlasting Endowment: Techniques to keep your endowment safe and invested right; Your CFO and board should listen
- When and where: Talking Alternative Radio, Friday, 1-2pm
Click over to our Media page for the files we’ll discuss during the show.
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Here is the link to the podcast: 012: Going Beyond Google & Everlasting Endowment
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Hello and welcome to tony martignetti non-profit radio big non-profit ideas for the other ninety five percent. I’m your aptly named host tony martignetti i want to thank larry bloom for that shout out saying hello, what a heartfelt and tender, sincere show he he just ran if you didn’t hear it right before this show it’s the divorce, our with larry bloom, you’re non-profit if you’re feeling left out of the mix because you’re smaller midsize left out of consultants, attention, the media attention, you have a home here at tony martignetti non-profit radio last week, we had tips to tune up your plan giving program by hiring the right financial partner and how to have a good working relationship with that partner, and we also featured a new segment i’m looking remember that was advice for non-profit job seekers from recruiter paula marks and that’s going to be a recurring feature on the show this week. We’re going beyond google gourmet prospect research on a goulash budget. My guest, maria simple, the principal of the prospect finder, is going to share strategies to know your current donors better and find new ones. I’ll also be joined by kathleen. Rittereiser we’re going to be talking about everlasting endowment in the second half of the show techniques to keep your endowment safe and invested, right? She has researched what the big, sophisticated endowment managers do and she’s going to share what she learned your cfo and board should be listening it’s not too late to call them up and have them listen because she’ll be in the second half of the show and between the guests around the half hour it’s tony’s take two this week, the irs says you’re non-profit status may be at risk if you’re not a non-profit you can’t listen to this show, tony martignetti non-profit radio we can’t have non non-profits listening to the show, do you want to risk that as well as possible your tax exempt status that’s probably secondary toe not being able to listen to the show that’ll be tony’s take two around the middle of the show, i’m your host tony martignetti this is tony martignetti non-profit radio we have a ninety second break, and then i’ll be joined by maria simple. Talking alternative radio twenty four hours a day. 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Hey, all you crazy listeners looking to boost your business? Why not advertise on talking alternative with very reasonable race? Interested simply email at info at talking alternative dot com. Welcome back on tony martignetti, host of tony martignetti non-profit radio i’m joined now by maria simple, the prospect finder larry bloom on the show before, when he was signing off and saying goodbye, said he doesn’t know what a prospect what the prospect finder is. While we’re talking about prospect research, maria samples company is the prospect finder. She’s, the principal of the company and the website is the prospect finder dot com maria is an experience researcher, trainer and frequent speaker on the topic of prospect research, she consults with non-profit organizations and helped them helps them find their best prospects for long term relationships. She’s, a member of the association of professional researchers for advancement, that’s apra. And prior to her work in this field she was a securities dealer in the investment banking industry. And interesting now she also does consult for financial services firms, helping them find the best prospects. I’m very pleased that her practice and work brings maria simple to the show. Maria welcome. Thank you so much and on a lousy crummy day thank you for coming into the studio from new jersey. It is a bit rainy today, maria what’s the value of prospect research for small and midsize non-profits why should they be thinking about it doing it? Well, you know, the more that on a ah, non-profit can learn about their potential donors, they’re donorsearch prospects ah, and their philanthropic interests it’s going to enable them to really hone in on matching the interests of the donor ah, with the organization’s mission on dh so we’re going to be looking at or what the organization is doing is looking at the background of people and there and sort of their biography and profile to find that kind of a match. Yeah, that’s, right. So what we like to do is take a look at not only somebody’s capacity to make a gift, hopefully a major gift to your organization, but also whether or not they have an inclination to want to give to your type of cause. So just finding out that somebody is wealthy does not mean they’re going to want to part with their money and give their money to your organization. So it really is helpful to know what their charitable interests are, where they have given before and at what levels if if we could. Possibly find that information in the public domain. Okay, and that actually leads to the public domain. Leads to my thoughts about some resource is that small and midsize non-profits can use that are either free or very low cost. Can we start toe? Think about some of those. What are those? Well, first and foremost, i think it’s time for all of us to kind of get back to basics and revisit our good old library. So for those of you who do not have a nup dated library card, i highly encourage you to get a local library card or perhaps one of your state level county level. Or even sometimes your alma mater will allow you access to the library. And the reason why i say that is because libraries have changed tremendously in the last ten, twenty years. We’ve seen a lot of databases become available for ah, for the public to use. And you can access the many of those databases from your home. Your office, really, any computer anywhere in the world. As long as you have that barcode and you have internet access. My guest is maria simple, the prospect finder and we are live this week. We can take your calls for maria the court number to call is eight seven seven for eight xero for one, two zero, eight, seven, seven for eight xero for one to zero. So, maria, just the public library. Really? Yeah, the public library in terms of the databases, but also many, many libraries have access to reference librarians where you can call in actually the type in a chat with a reference library in twenty four hours a day, seven days a week. So very often, if you’re having trouble finding the answer to the type of question you’re looking for on some research that you’re doing very often, the librarian will be able to help you really pinpoint exactly where that resource can be found. Either online or within their own resource is that they have what are some of the database is that people might find through their library one database that can be particularly useful and identifying local successful business is business owners would be something called reference yusa and ah, that is in a database that one can access directly, but it’s also available through many, many library, so you can compile lists you khun research companies that you already know about on dh so that one can be very, very useful. Another such database would be who’s who type of database. It is a biographical resource, it’s it’s still available in many libraries and hard copy format. But you can also access it through a lot of libraries by getting in either at the library itself or with your barcode from home and let’s dive into some of these resource is what what kind of information can people expect to find from the who’s who, well, who’s, who was actually provided the biographical, uh, resource itself. The profile itself is provided by the individual who the re sort, who the research is done on. So the name of the individual where they reside, where they work their charitable interests, whatever information they have provided to who’s, who is what you’ll be able to get out of this particular resource. And maria, just in the thirty seconds or so we have before the break, isn’t it possible some libraries that you can buy a card for the library? If you’re not a resin? Local resident? Yes, you might check into some. Of the larger, really large libraries nearby and see if you can actually tap into purchasing a library card. I know that that is definitely an option in somerset county, new jersey, where i reside. Ah, and so you might definitely check into your local county or statewide library. See if that is available to you. My guest is maria simple, the prospect finder maria’s going to stay with us after this break. I hope you will, too. I’m tony martignetti. You’re listening to the talking alternate network, get in. I think. Cubine hi, i’m new york state senator joe a dabo. I will be hosting a Job fair on friday, november 12 at aqueduct racetrack in queens, contending into three p m, we will have over one hundred companies looking for qualified workers. They’re all to be lectures on jobs, tried to jeez and networking. So come and bring plenty of resumes and join me on friday, november twelve at aqueduct racetrack for a Job fair from 10 a m to three p m. For more information, please call pete in my district office at seven one eight seven three eight one one one one, oppcoll. My real self, if only i had someone to help me with my lifestyle. I feel like giving up dahna is this you mind over matter, health and fitness can help. If you’re expecting an epiphany, chances are it’s not happening. Mind over matter, health and fitness could help you get back on track or start a new life and fitness. Join Joshua margolis, fitness expert at 2 one two eight six five nine to nine xero, or visit w w w died. Mind over matter. Y si dot com. Durney are you suffering from aches and pains? Has traditional medicine let you down? Are you tired of taking toxic medications, then come to the double diamond wellness center and learn how our natural methods can help you to hell? Call us now at to one to seven to one eight, one eight three that’s to one to seven to one eight one eight three or find us on the web at www dot double diamond wellness dot com way. Look forward to serving you. You’re listening to the talking alternative network. Welcome back to tony martignetti non-profit radio. I’m joined by maria semple, the prospect finder. Her website is the prospect finder dot com maria. Before the break, we were exposing people to the idea that the public library you said back to basics could be a really good source of information, and people can actually bike a library card if they don’t live in the region. So what? Um, what specifically could we do with the information? Let’s? Take the who’s who? Ah, typical biography, you said it’s, provided by the person who biographies on what what’s a what’s a non-profit going to do with the information that they find? Well, very often, it’s going to give you some really good information about somebody’s career. So let’s say we’re profiling somebody who happens to be a longtime employee of a public corporation. Ah, there maybe the ability for the non-profit to garner gift of stock from this individual. So just knowing that they have been ah, in a long term connected to a public corporation, you can actually ah, research out to see if they happen to be a corporate insider. Ah, and corporate insiders must report all of their trading activity to the securities and exchange commission. So this is one thing that a non-profit khun do. If they feel that somebody has really risen to the ranks of being a corporate insider, they might be able to ask, forgive to stock instead of a gift of of cash spotted. This could be particularly important if you’re looking at a major gift for a capital or an endowment campaign. S o definitely a resource stop for one second. We have ah, on the show, we have a jug in jail, and i’m the warden of jog in jail. So i have to take out the keys and ask you about an insider. What is the definition of an insider in a corporation? Well, if you are considered a corporate insider by the securities and exchange commission, you basically fall into one of three categories. You’re either one of the top officers of the company, in which case all of your stock positions as well as your salary history going back three years, is provided to the sec and in publicly filed documents, you also have the entire board of directors. Ah, that would be considered part of the corporate. Insider group and anybody owning ten percent or more of the outstanding stock of the company would be considered a corporate insider. So if you’re in one of those three categories, you do report all of your trading activity in that particular stock to the sec. Thank you for that. Right now you’re out of the jail. Wardens open the gate, the doors because you gave us that definition. What you said earlier. You want to try to match the a person’s background with your mission and your work? What about finding other non-profits that they give to that might be within your area? How could someone find out what other organizations someone gives too well? You can sometimes find it out through those biographical resource is also a newspaper articles s o i’m not suggesting you have to read every local newspaper where national newspaper but there are re sources such as news directory, dot com newspapers, dot com where you can go and research papers nationwide. So if you know if somebody that has perhaps a residence in manhattan but also spends part of their year in palm beach, florida, you might check newspapers related to those two. Regions to see if their name happens, teo, be connected to any major fundraisers gallows. Perhaps they’ve named a wing in the hospital in one of those two locations. So really, you know, looking for any press as well, that you might be able to find on the individual and googling them, learning how to use google? Well, actually, i always skip the main google page, and i go right to the advanced search page because it will enable you to, like, say, for example, tony, if i were researching your name, i would put your name in quotes, and i would ask google to return to me the hits that have only dot or go after them or dot edu, because that what that will tell me is that you are perhaps connected to those non-profits in some way either serving on the board ah, we’re making some donations, you’ll find nothing about me because no one goes to my blogged no one reads the content that i put out so you’re welcome to try but there’ll be nothing. What? Um, what about the person’s college? Could we if we know where they went to school? Can that be? Ah, possible source of information. Yeah, sure can, especially if you have a board of directors who is very active board of trustees was very active with you in trying to do some fund-raising if you’re able to determine either through a biographical sketch like in a who’s who profile or even looking at somebody’s linked in profile, those profiles are filled out by by all of us individually, and we do list where we’ve gone to school on those profile, so having perhaps that knowing that that you have a boardmember that went teo cornell and a and your prospect went to cornell, that might be the person that you want to match up to actually make thie cultivation and solicitation calls. My guest is maria simple, principal of the prospect finder maria provided a resource called going beyond google to find to find and research individual donor prospects, and you’ll find that resource as a pdf on my blogged at m p g a d v dot com and you cook the media tab and its you’ll find it there, and you’ll also find it, of course, on maria’s website maria, where would people find it on at the prospect finder dot com i have a resource is tab, so that document is there it’s going to give you a good overview? Prospect research, as well as a number of resource, is that you can begin tapping into immediately ah, that are even outside of the library world. Just websites that you can go to to begin doing prospect research. And i give you some guidelines as well, for maintaining confidentiality of the information storage of the donor data and you know, some tips on what to do once you’ve got the information and that’s all in the resource center of of your web site, the plastic finder dot com people get outraged a little bit by the availability of public information governments, state, local governments well and the federal government to putting so much on the web. But that’s sort of rich area, isn’t it? For prospect research he’s publicly available records and documents? Yeah, in fact, prospect researchers that work in non-profit institutions on ly have access to information that is publicly available. So it’s available by anybody. I know that donor private individual privacy is a huge hot topic today and what i can tell you about that? Is that the association that you mentioned earlier? Apra association of professional researchers for advancement, we actually have an entire code of ethics and guidelines to follow s o that people are their information is safeguarded on dh any anything that is compiled either in paper format or is stored in a computer is all safe guarded. So we do want to make sure that we are maintaining the confidentiality of the information and so let’s dive a little further into these public records. What kinds of things can people find in and say dmv database is marriage databases, real estate databases that air that air all publicly accessible? Well, the d m v database is we don’t we don’t tap into you can tap into some marriage and divorce records of the records that are tapped into quite frequently, though, are the property records? So we do like to have a general idea about somebody’s wealth with regard to their primary and any secondary properties they may own. So we tried to look at the value of those properties as well as perhaps the taxes that are paid on those properties and just would give you a general idea of their level of wealth, and in that case, if they’re the government documents you’re, you’re likely to see the the assessed value, which is often a lot lower lower than market value. Do you have any resource is for for market value on property? Yeah, actually, a really good resource is zillow z i l l o w that one it’s free zillow dot com you can actually even get a pic stir of the property in question, and it’ll give you a really good idea of where the property has been in value over a certain period of time. S o u will definitely have, you know, a pretty good sense of that. That person’s property value all right? And so now we’re giving people advice too, and a tip that they can go search their friends home, value their neighbor, right? I mean, we can we can take this a little beyond non-profit prospect research, but we don’t want to. We don’t encourage that. No, let’s. See what? What it should be in a sort of a prospect profile if if if someone is contracting with you or someone else for information on a donor or maybe a dozen or so donors? What kind of information should they expect to be in a profile? That’s going to be valuable to them? Okay, well, typically, the profile will contain information about the property addresses. As i mentioned earlier, where they went to school, their education, their work history where they’re currently employed, as well as any additional work history, we might be able to find any relevant information about the business. So are they in a an industry that is doing particularly well? Right now we’re perhaps not doing well and still recovering. Ah, we can find all the information i mentioned earlier about any stocks that they may own as a corporate insider, so that would not be any private stocks that they owned, but only those as corporate insider. We would be able to find out if they have made some major gifts to other organizations, and that information has been released publicly where they went to school on dh. Interestingly enough, sometimes the pieces of the puzzle regarding spouses and children could be a little bit more difficult to find on that’s, where you might want to rely on internal sources, such as your board of directors and volunteers to help flesh out those pieces of the puzzle a little bit for you, some of your research could be done by people write who are friendly with them, maybe staff who have met them. Yeah, absolutely. And, you know that that’s really important and any relationship that has been already developed by your fundraiser by your staff by other volunteers is extremely important. For example, they might know about how many children somebody has and the ages of those children. And if you have self couple of children in college and another one about to enter college, you’re pretty assured that a major gift is not going to be forthcoming in the next few years. So you might want to keep that person and more of a cultivation phase a little bit longer. Friends are likely to know what other organizations they might exactly on the bordeaux. Forgive teo. Maybe what clubs they belong to if it’s someone of wealth, right? Right? Yeah. And you might not find that looking. You know, looking in public resource is so please don’t discount those internal sources of information that are could be really valuable. And filling in some of the holes in your profile that you’re not able to find. Several weeks ago, i blogged about the value of the the face-to-face meeting, i like to do donor-centric dinner and just having a conversation with someone for an hour, hour and a half over a meal, you’ll find out a wealth of information was right that’s, right? And, you know, the fundraiser or the volunteer that is having that type of a conversation with a donor prospect, it’s it’s really imperative that that information flow back to the nonprofit organization? Hopefully you have some sort of good donorsearch oft where that is able to capture this information so that you’re able to make these types of notations regarding date of the meetings, what was discussed? S o if you happen to be raising money for a hospital, for instance, does this person have more of an interest in pediatric care, cardiac care, where you know what came through in the conversation that is extremely, extremely important, very critical, and i do find some organizations that don’t have that mechanism for feeding it back, and then it just resides in the person’s head who works. For the organization, and if they’re not around the next time the donor it has to be called or the next major event that the donor comes to or if they leave the organization go to a different job, that corporate knowledge is lost, it has to be fed by, right? And by the same token, tony, there are an awful lot of organizations that have founders of the organization that are still in place, and they have that longevity and like you said, all that information in their head and it’s really important to try and make sure that that information is imparted to somebody well on staff at the non-profit that can really filter that information because, you know, we you know, we could be gone tomorrow, so you know, it’s really important that the non-profit be able to continue their good work. I’m joined by maria semple, principal of the prospect finder her website is the prospect finder dot com, and we’re talking about going beyond google gourmet prospect research on a goulash budget and maria’s sharing terrific, valuable suggestions about doing prospect research for your donors and maybe even finding additional donors people who are not currently close to your organization, maria, what prompted that block post that i mentioned several weeks ago was a wall street journal article. It was on may sixteenth that was called titled is your favorite charity spying on you? And it was a little critical of of the prospect research that we’re talking about. Is this spying well? No, no, no, we’re not at all spying. What we’re trying to do is really garner the information that is going to enable us to develop the best possible relationship with someone. So if you approach this as a business meeting and this is really what it is, this is business. Ah, and also the fact that this individual that you would be approaching for a gift is making an investment in your organization. So it really makes sense to know as much as possible about the individual where their interests lie and see if there really is a match going forward to see if the conversation should take place so thiss type of corporate intelligence, if you will, is going on in the for-profit world market research, etcetera, and we’re just using the information in a way that will enable us. To develop meaningful relationships. You essentially then preparing for a business meeting. Exactly. Exactly. And in fact, if you walk into a meeting with a donor prospect and you haven’t adequately prepared it may it may come through to the person you’re meeting with. And and then you look, you look awkward by the same token, you don’t you don’t want to be so forthcoming with all the information that you know, because that could that could be awkward too, if you start spewing facts about the purse, right? Yes. So, i mean, you really wouldn’t want to say, well, my research has revealed that, you know, you own two homes and they’re valued at x y and z. So you know, the information is there to prepare you to prep you for the meeting, but not that you should start quoting off the information. So you using it on background background, right? Exactly. You want to be prepared? Yeah. And if you were going in to have ah, job interview with it with a corporation, wouldn’t you be doing as much background information research as you can on the company to make you sound like you know what you’re talking about and that there is a match for you to be employed by the organization. So it’s it’s a bit of the same mind frame you might even be reviewing the history of the of the interviewer and that’s akin to what we’re talking about. Right, exactly, marie, our time has come to an end. I want to thank you very much for coming to the studio. My guest has been maria simple, the prospect. Find her, you’ll find her at the prospect finder dot com. She has the resource center in her website and also, as i said on my block on the media tab, you’ll find going beyond google, which is very good advice seven or eight pages of advice from maria simple. The prospect finder. After this break, i’ll be joined by kathleen rittereiser. We’re going to be talking about everlasting endowment techniques to keep your endowment safe and invested, right? I’m tony martignetti, the host of tony martignetti non-profit radio. Please stay with us. Talking alternative radio twenty four hours a day. Hi, i’m new york state senator joe a dabo. I will be hosting a Job fair on friday, november 12 at aqueduct racetrack in queens, contending into three p m we will have over one hundred companies looking for qualified workers. They’re all to be lectures on job strategies and networking. So come and bring plenty of resumes and join me on friday, november twelfth at aqueduct racetrack for a Job fair from 10 a m to three p m. For more information, please call pete in my district office at seven one eight seven three eight one one one one bonem are you suffering from aches and pains? Has traditional medicine let you down? Are you tired of taking toxic medications? Then come to the double diamond wellness center and learn how our natural methods can help you to hell? Call us now at to one to seven to one eight one eight three that’s to one to seven to one eight one eight three or find us on the web at www dot double diamond wellness dot com way look forward to serving you. Hey, all you crazy listeners looking to boost your business? Why not advertise on talking alternative with very reasonable rates? Interested simply email at info at talking alternative dot com welcome back, this is tony martignetti non-profit radio it’s time for tony’s, take two and what’s concerning me this week is the internal revenue service saying that ah, good number of non-profits may have their non profit status revoked shortly, quoting from their website and and a press release small nonprofit organizations at risk of losing their tax exempt status because they failed to fire a ll file required returns for two thousand seven, two thousand eight and two thousand nine can preserve their status by filing returns by october fifteenth, two thousand ten, under one time relief program. This all came about from the the philanthropy protection act of two thousand six. By the way, if you’re not interested in the history of what this all comes from, what you turn the volume down, i guess, and i’ll just wave my arms and you’ll know when it’s time to turn the volume back-up if you’re interested in history, it comes from the philanthropy protection act of two thousand six that was there was a lot of good provisions, including direct ira gift to charities for people over over seventy and a half, but one of the sort of hidden. Provision was that if a if a non-profit did not file it’s required form nine ninety easy for three consecutive years that it was going to lose its tax exempt status because the presumption was there, not inactive business and what’s happened is a lot of very viable and alive non-profits air getting caught up in this on my blogged at m p g a d v dot com i do have an irs widget that you can click on and read the list of non-profits that are at risk to see if yours is among them, or if an organization that you know is among them. You have until october fifteenth. That’s just two weeks to take advantage of the irs is one time relief program. I’m joined now by kathleen rittereiser kathleen is co author of foundation and endowment investing, and we’re going to be talking about managing your endowment. Teo, get the most from it and keep it most safes. Kathleen, i want to welcome you to the studio. Thanks, but to be here. What did you do to research this book? Foundation and endowment investing. How did you go about finding out what big non-profit organizations are doing with their endowments. Well, the first thing that i did was i teamed with the co author larry coe shard, who is the chief investment officer of georgetown university, and if the book came about because it was larry’s idea when he took over as the chief investment officer at georgetown, he was looking to learn from other successful chief investment officers about how best to manage an endowment in a more complex acid and by asset allocation environment. So he had the idea because there was no such book came to me because i was calling on foundations and endowments as an asset management sales person. So the two of us teamed up, and what we did was we researched who are some of the most successful institutions and investors in the foundation and endowment community. And then what we did was approached them and asked them to be in the book. So the book is actually profiles of leading chief investment officers. Each you tell their story, share their strategies and give advice for how to manage large endowment portfolios. We also include some history and some basic ideas about how to go about managing endowment. Portfolio, in other words, like, what are the things the basic things to dio if you are the chief investment officer or overseeing an endowment foundation type portfolio? And when i first brought kathleen on, i was stumbling through some papers to find the bio that i wanted to have in front of me when she came on, so i’m going to share that with you. Now the full title of her book, co authored with larry coe shard is foundation and endowment investing philosophies and strategies of top investors and institutions, and the two of them also have a second book, more current top hedge fund investors, stories, strategies and advice. Both books are available at amazon dot com also want to share with you that kathleen is a director of investor relations with concordia advisors and that’s in new york city based hedge fund. She has over twenty years experience in sales, marketing and relationship management roles with leading asset management, research and brokerage firms, which she was just saying, and i apologize that i didn’t have the paper in front of me, but i wanted to move us along rather than be stumbling along what types of organizations did the people who you and your co author interviewed work for the majority? It was basically split half endowments is a large university endowments and also some large foundation. So thie institutions included the hewlett foundation notre dame investor, which was is led by a woman named alice handy, who used to run the university of virginia endowment. Mitt is representative george washington university, the kaiser foundation and morgan creek capital management. And the idea was to really kind of showcase well known, well regarded chief investment officers in who worked in a variety of different types of non-profit institutions we also showcase, i mentioned mark yusko from morgan creek capital management. We also showcase the kind of burgeoning trend in foundation and endowment management, which is outsourced ceo. So that’s, what investor is and so it’s morgan creek capital management, and in a few minutes, we’re going to talk about the outsource ceo chief investment officer trend that you see, but let’s start with some of the lessons that small and midsize non-profits could take away from what you learned from these very big endowment managers. Absolutely, i think the most important lesson from all of these foundations and endowments and it’s true about any endowment portfolio is that the long term perpetual time horizon allows thie investment manager or the person overseeing the portfolio to take a long term investment perspective and to have a more value orientation, meaning that they can often make investment decisions relatively early on by things at very cheap prices and hold them for a long period of time. So it’s actually it’s it’s actually a an approach that’s, kind of a longer term buy-in hold approach. The other thing that’s important is the quality of the governance and the fiduciary oversight of the portfolios that most all of the institutions that we spoke teo, there is a chief investment officer who has full responsibility for the portfolio in making decisions, and the boards and the governors are really just for oversight and getting involved in asset allocation. So and the other lesson, which is really kind of a trend that started many years ago in the foundation and endowment community and it’s. Still continuing with these long term portfolios is the idea that if you can take a long term approach, you can invest in less liquid types of securities. Which led teo, many of them being successful by making investments in alternative investment portfolios such as venture capital, private equity and hedge funds. Now our audience is small and midsize non-profits so some of this back-up i want them to be ableto benefit from and i know in terms of quality of the oversight and transparency that’s where i think we’ll get into the sort of outsourced ceo movement because i think the majority of our audience probably doesn’t even have a chief investment officer. They probably do have a financial officer, but not an investment officer, right? This lets a little more about this. The long term view. I hear that all the time in, in terms of personal investing, your time horizon. What is there a recommended time horizon for investing endowment? Well, i think one of the well known endowment ceos who’s written about this subject is david swenson from yale. So he he looks at it as forever. So that’s, you know, officially perpetual is forever. Realistically, most endowments, i think, need to look more like ten to fifteen years out rather than one to two. Now many foundations in particular, i know, have different. Types of liquidity constraints because for the most part, they need thio spend five percent of the endowments value every year, so they have different kind of liquidity considerations. But if this is a large pool of capital, even a good size pool of capital, it makes sense to be able to put some assets in your allocation, which have a longer term horizon for paying off. So that’s kind of where something like a long term real estate investment or venture capital or a hedge fund that might have be investing in distressed assets or something that has a longer term time horizon for when the payoff will happen, will allow the endowment, the foundation to be able to hold on to the principal and preserve that principle for the life of their organization, but then also get the income that they need thio manage operations or give grants during during the shorter time periods. What this does lead into is the idea, which i think was one of the key investment ideas or the investment thoughts that come out of talking to foundation in and damn achieve investment officers and is also supported by research in the industry. Is the idea that asset allocation is really important, so whether you have a five million dollar endowment or you have a five hundred million dollar endowment, how you decide to allocate your assets is very important in how it relates to the mission of your organization and what your organ it organizations needs are. But asset allocation remains the key way tio earn returns overtime. My guest is kathleen rittereiser, co author of foundation and endowment investing, and we’re talking about everlasting endowment keeping your endowment lasting for forever for your organization’s life. But, kathleen, what can non-profits with maybe a five or six figure endowment do in terms of long term investing? I think i think an organization like that a lot of it depends on the finish of the governance, as i mentioned earlier, do they have a committee that is involved? If not, i mean, i think this does lead into the question of outsourcing and one of the trends that we identified and we spoke to some of the people that run outsource ceo organisations, is this idea of really just taking the portfolio and turning it over to an outside manager full time? Because what they do is they pull assets with a lot of other foundations and endowments, so you get a an economies of scale that is that’s really related more toward being able to pull your assets with other organisations, to make the outsource cia a more substantial investor in alternative portfolios, and allows you to get the benefit of really professional asset management experience, especially with that specialty and foundations and endowments. And i think that’s the that’s probably the key thought is that there is there’s a lot of expertise, and these portfolios are very complicated to manage as it relates to an alternative. So that would be why i would suggest that if you are a smaller size, the best way to approach it is to work with some kind of outsourced ceo organization, and they’ll take funds that air just in the five or low six figures, a seventy five thousand dollar endowment. It depends. Probably a seventy five thousand dollars in damn, it would be would be it would be difficult, however, i believe that there’s more and more new types of products coming onto the market. So there’s a lot of different models buy-in investor which i mentioned earlier, is kind of is a custom model. Morgan creek has a fun that’s available through the merrill lynch platform, and there are a number of other types of organizations that are offering mohr like a fund-raising khun, just invest in a fund rather than hyre and outsource ceo so there’s there’s a lot of different models that are coming to the forefront and a lot of larger asset management organizations. T a cref recently entered this market, so i think that that will be an option that’s going to be available for even the smallest size endowments, and it certainly sounds like it is now available if an organization has maybe seven hundred fifty thousand dollars or a million and a half dollars, and even in those low six figures, definitely right? Absolutely, yes, absolutely. And they’re not going to wantto put, i would think the whole endowment with outsourced chief investment officer, would they? Actually, they will. I mean, some of the largest one of the largest outsourced situations is a company called perella weinberg. And they recently took in the entire university of colorado endowment, which is eight hundred million dollars what they did. Then was they teamed up. They took the ceo as well. So the university of colorado chief investment officer went over and rant it’s now running the perella weinberg portfolio. But that’s that’s probably the biggest move that’s been made so and they will, an organization that doesn’t have the resource is or the time or the expertise to be running the endowment themselves or and they usually have a smaller endowment will actually make the decision toe outsource the whole portfolio. They’ll have oversight and governance and be able to be making asset allocation decisions and decisions related to how the endowment is used for their mission. But they will actually hire someone to run the whole portfolio for them. We only have about thirty seconds before the break. What about the resistance that this is ego? The board is now giving up authority? I’m not sure that i have thirty seconds. I think that’s a thirty minute answer it’s definitely an issue and one, that one that i would say that my my motto now is there is no d i y in fiduciary and that fiduciaries need to start to learn i think a little bit more. How the world of investments is changing and to start to think about what is really the right fiduciary decision to make and it’s not my ego, but it’s. What is right for this institution? We’re going to take a break. My guest is kathleen rittereiser, co author of foundation and endowment investing. I hope you’ll stay with us. Co-branding think dick tooting getting dink, dink, dink, dink. You’re listening to the talking alternative network duitz waiting to get into thinking. Thank you, cubine. Is your marriage in trouble? Are you considering divorce? Hello, i’m lawrence bloom, a family law attorney in new york and new jersey. No one is happier than the day their divorce is final. My firm can help you. We take the nasty out of the divorce process and make people happy. Police call a set to one, two, nine six four three five zero two for a free consultation. That’s lawrence h bloom two, one two, nine, six, four, three five zero two. We make people happy. Whillans is lack of capital or credit keeping you up at night? The show me. The money conference is coming to the roosevelt hotel, forty five east forty fifth street in manhattan on november third. This’s the best business networking opportunity to meet potential investors and lenders, and get answers from our expert panel of business and financial advisors. For more information, call six four six six one nine eight zero nine. One are online at rose otto accounting that’s r o s a d o accounting, dot, com slash show me the money. Hyre this is tony martignetti athlete named host of tony martignetti non-profit radio. Big non-profit ideas for the other ninety five percent. Technology fund-raising compliance. Social media, small and medium non-profits have needs in all these areas. My guests are expert in all these areas and mohr. Tony martignetti non-profit radio friday’s one to two eastern on talking alternative broadcasting. You’re listening to the talking alternative network. Geever like the voice on that last commercial very, very soothing, sort of mellow voice. I hope you’re enjoying it, too. I’m joined by kathleen rittereiser she’s, the co author of foundation and endowment investing. Kathleen, if people have questions, i’d like to follow-up how could they get in touch with you? I have a website, which is kathleen rittereiser dot com, and my email address is kathleen with the c c a t h l e n at kathleen writ tom that’s c a t h l e n r dot com thank you, and you’ll of course find her name on my my block, where the guests are all listed. That’s m p g a d v dot com you can also see her name on the facebook page for the show, and i’ll tell you that her last name is spelled r i t t e r e i s e r kathleen rittereiser ands kathleen with the sea before the breakout thing we’re talking about this outsource chief investment officer trend and how small and midsize non-profits khun take advantage of it? What about the due diligence? What should’ve non-profit be looking at when there what should the process be for hiring the right outsource ceo? Well, it’s, interesting, because i think a lot of smaller foundations and endowments get in, as we were talking about earlier, that investment committee gets excited about picking managers and often, but we’ve seen that they don’t have the right experience to be picking individual manager, so picking an equity manager or bond manager where and the process is actually quite similar except what you’re doing is making a decision that’s more of a one time, longer lasting decision. So there is some extra pressure in that case, however, i mean that’s pretty much doing the kind of research like coming tio my website or even, you know, sending meet so, you know, doing research on the internet, there is a block called endowment investor that writes about endowment issues. I write about these issues, and i’ve spoken about them, so it is working it’s kind of doing sametz initial legwork to look at the models on dh think about what’s the size of my endowment. What what are we comfortable with in terms of giving up the level of authority? Some organizations have made the decision that they’re willing to turn over the whole portfolio, others might go somewhat piecemeal into it. Organizations that are working with consultants as such as cambridge may decide the work with their consultant organization to get referrals or also to transition into a more outsourced type of model. So, you know, obviously the first part is research and and i’ll admit that because this is kind of a newer type of investment approach, there are fewer let’s, say, syndicated sources of information about this but it’s becoming more and more prevalent. So even a google search on outsource cia well, i think lead you to some good resource is and again there’s information available on my website and even contacting me directly, i’m happy to help people with this also, i would say that the next phase is really due diligence like you would do with the manager thinking about what your organization’s needs are what who were the people that you want to be working with? What’s their business model inter? Are they a single fund? Are they doing something custom and then and then spending time with these investors? Tto learn about their process and how they’re going to work with you. So i think it’s ah, it’s a can be a longer term process, you know, it’s not a decision that you should make over the course of a quarter. I would say that if you’re really seriously taking turning over your whole endowment to an organization that it probably should take at least six months to a year from start to finish, to be making that kind of going through the process and making that kind of decision, what about the oversight we have just about a minute left once once a now outsource ceo is hired, where’s what’s the board’s responsibility, and they still are fiduciaries to the organization what’s the oversight of the outsourced the board is still is still the fiduciary, and basically the same kind of the oversight is the same oversight that they would be responsible for if they had a ceo or if they had a number of managers that were reporting to a committee member. I think what happens is when and what i’ve heard from organizations that have made the transition so far, the oversight is actually much more productive in hyre level variation of oversight, in other words, they’re involved in strategic issues of the institution and ask that allocation issues rather than nitty gritty, so it’s basically that the oversight is brought up a level in terms of its strategic import for the foundation or endowment. My guest has been kathleen rittereiser she’s, the co author of foundation and endowment investing, which you can find at amazon dot com her website is kathleen writ dot com that’s kathleen with c and r t dot com kathleen one thank you very much for coming to the studio today. Thanks for having me. It has been my pleasure. Next week we’re going to be talking back off his blunders. Stop squandering money on your back office costs tricks to save big on supplies, office supplies phone, energy, healthcare my guest will be jeff marston he’s, the president of resource centers for management and also your five minute program super streamlined events that keep your audiences informed, engaged and awake and that’s going to be a return guest. Claire meyerhoff those air both next week you can get insider alerts about the show, and you can get them at the facebook page at facebook dot com it’s tony martignetti non-profit radio you can also, see what my live appearances are on that facebook page. My block is m p g a d v dot com, and you can see where i’m appearing there and see what thoughts are coming a cross my desk, and maybe you’ll get some insight into what’s coming up at tony’s, take two for next week. I want to thank the creative producer of tony martignetti non-profit radio that is claire meyerhoff, our line producer and the owner of talking alternative broadcasting. His sam liebowitz on our facebook is done by regina walton of organic social media want thank you very much for joining me this week has been tony martignetti non-profit radio. We’re always talking big non-profit ideas for the other ninety five percent. Join me next friday at one p m eastern, right here at talking alternative dot com. Dahna you’re listening to the talking alternative network, waiting to get a drink. Nothing. You could. I really need to take better care of myself if only i had someone to help me with my lifestyle. I feel like giving up dahna is this you mind over matter, health and fitness can help. If you’re expecting an epiphany, chances are it’s not happening. Mind over matter, health and fitness could help you get back on track or start a new life and fitness. 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