Creating an Investment Policy Statement

What’s an Investment Policy Statement?

Investopedia defines an Investment Policy Statement (IPS) as a "document drafted between a portfolio manager and a client that outlines general rules for the manager. It provides the general investment goals and objectives of a client and describes the strategies that the manager should employ to meet these objectives. Specific information on matters such as asset allocation, risk tolerance, and liquidity requirements are included in an investment policy statement."

Should nonprofits have one?

Absolutely. It is certainly good practice to have one when investing. An IPS protects you, the board, and your finances. It outlines your risk tolerance, best practices, and fiduciary responsibilities in a clear and concise way to guide your investments in a way that is in the best interest of your organization.

Although we highly recommend having an IPS in place, Infinite Giving does not require one. As a fiduciary and Registered Investment Advisor, not only do we want to act in your best interests, we are required to! Our platform automates nonprofit common industry practices that you would be required to spell out for a traditional bank and wealth advisor. For example: our portfolios are all well diversified to minimize risk, no high risk stocks, no day trading, we only offer low cost index funds and ETFs, high quality bonds, and use a passive investing approach based on years of academic research under Modern Portfolio Theory.

Use our free IPS template.

Not sure how to get started? Create an Investment Policy Statement for your nonprofit with our free template! No need to spend money on this or get in the weeds and over complicate it. We made a straightforward, common industry template so you can plug in your organization name, tweak preferences to match what is best for your nonprofit, and be ready to grow your giving. 

Bottom line? 

If you are investing, you should have an Investment Policy Statement. The good news is that it doesn’t have to be hard, cost money, or be time consuming. An IPS is essentially a basic agreement protecting you, the board, and your finances. It provides a roadmap for wealth managers and banks on ways to manage your money appropriate to your industry and preferences. With Infinite Giving we already follow common practices for nonprofits, provide a free and easy to use tool for an IPS, and can have your nonprofit investing in about 10 minutes. 

Ready to get started?