Investment and Spending Policies

A successful family foundation investment strategy depends on both a sound process and well thought-out, written policies. This Content Collection includes resources describing how a foundation’s spending policy and organizational objectives are linked to development of a cohesive and integrated investment strategy, as well as sample policies and other related advice.

Interested in aligning your investments with your values and mission? Please see the NCFP Content Collection on Impact Investing for additional information and resources.

Start Here: Developing an Investment and Spending Policy

Recommended Best Practices in Managing Foundation Endowments

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While foundations differ in sophistication, resources, staff, and amount of financial resources, there are both specific responsibilities incumbent on foundation boards and generally accepted principles for investment management. These best practices are universal to effective management of investment portfolios as applied to fit the specific circumstances of each foundation.

Identifying and Working with Investment Advisors

Building a Better RFP: A Guide to Assist Your Search for an Investment Advisor

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This guide from J.P. Morgan describes steps for creating an RFP and selecting the right investment manager.

How to Manage Relationships with your legal, financial, and investment advisors

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How can we get an honest picture from our advisors about whether the strategies they are pursuing are the right ones? How do we know our advisors are telling us everything we need to know? Consider having general investment, legal and other training sessions for your foundation board that are…

Frequently Asked Questions

Can You Avoid Conflict of Interest and Have the Family Office CFO on the Investment Committee?

Ask the Center

Yes. Conflicts of interest of this type come up all the time. You shouldn’t try to avoid conflicts, because they’re impossible to avoid. At some point, they will come up. The way to handle a conflict is to be trained about what may come up, to be very clear about…

What is mission investing and is it different from impact investing?

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Mission investments are made by foundations and other mission-based organizations to further their philanthropic goals. Mission investments (like impact investments) are intended and designed to generate both a measurable social or environmental benefit and a financial return.

What Kinds of Financial Expenses Do Not Count Toward the 5% Payout?

Ask the Center

With the exception of expenses for the management and product of income, all charitable expenses – including the cost of preparing the foundation’s 990-PF – count towards the payout. So, whether it’s rent, utilities, travel-related expenses, grants, contracts with consultants, or other such expenses – everything that you spend, other than…

Sample Investment Policies

Sample investment policy statement with SRI component (Stokes Foundation)

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This sample investment policy contains language regarding the family foundation board’s desire to have socially responsible investing as a core focus of its strategy.

Investment Policy Statement Template

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A template investment policy for adaptation and modification by the governing board of the institution in accordance with the particular needs and circumstances of the institution.

Sample Investment Committee Job Descriptions and Charters

Policy Central: Board Committees

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Examples of descriptions and charters for the most commonly used family foundation board committees.

Investment Committee Job Description (Lipscomb Family Foundation)

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The Investment Committee is responsible for the oversight of the Foundation assets. The Committee is comprised of three members selected from the Board. The Committee is responsible for defining the investment objectives and policies for the Foundation’s assets, subject to the overall guidelines set forth in this Policy. It is…