Guiding a large, charitable organization facing a funding crossroads and a multimillion-dollar shortfall.


A charitable organization was dealing with flattening contributions and rising costs.

In order to fully understand the financial scope of our client’s problem, we reviewed the current income statement and found a shortfall of several million dollars. We also discovered that nearly all of the assets were invested in hold-to-maturity bonds, and the rest were in equity mutual funds. Next we evaluated the client’s Investment Policy Statement (IPS), spending statements and statement of risk, which revealed that there were no definitions of risk or expected return, no clarification of minimum and maximum allocation models and a very restrictive list of allowable investments.

We then reviewed the balance sheet, which showed hundreds of sub-accounts from multiple donors that represented hundreds of separate investment portfolios. The balance sheet also revealed unusually high expenses in the accounting department. The average return on the portfolio fell below typical balanced indices, and the current income level was not achieving required payouts. Our analysis found that this midsize institutional fund was paying retail fees for mutual funds that averaged 1.8% in total expenses.


Close the funding gap with income-producing assets.  Cut expenses by outsourcing administrative functions.

We determined that the organization’s IPS needed to allow for additional asset classes that could produce a better income stream and protect against deflation as well as inflation. By moving all assets to income-producing assets, we helped to eliminate a substantial portion of the gap and funding shortfall. To lower expenses and create efficiencies, we outsourced administration and accounting to a third-party trust company that allowed it to complete the same work for a small percentage of the cost. We streamlined sub-accounts and their fees by creating master investment pools. And finally, we liquidated all mutual funds and exchanged them for index funds, reducing annual costs.


This charitable organization was able to balance its budgets, redeploy personnel from accounting to the organization’s actual mission, simplify administration and dramatically cut overall expenses.

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