Hire professionals? This has at least got to be in the discussion.
I like to manage investment of my own household money. I think I do okay, and I resist all the marketing calls to hire somebody to do it for me. My father-in-law, who has a lot more money than I ever will, DOES hire people to manage his household money. Could I do substantially better if I hired somebody to invest and manage my money? Maybe. Probably. But I’m cheap.
A couple examples make me think nonprofits also can benefit from hiring money people to invest their money (if they’re not cheap).
I’m amid a contract to do some research for the Council on Foundations. One project is to study compensation in grantmaking foundations. I found more than 50 people with salaries over $1 million. More than half of those people have the word “investment” in their job title. The highest several salaries are investment officers. In many cases, investment officers out-earn the foundation president. The nonprofit sector’s money (private foundation corpuses) hires professionals to manage its growth.
The other example is Harvard. That famous $53+ billion endowment throws off $2+ billion each year to fund one-third of Harvard’s operations. They have an office called the Harvard Management Company that’s staffed by serious money people who work daily to maximize the endowment’s value.
I manage my own household money because “it’s not rocket science.” On the other hand, rocket scientists have a lot better chance of getting to the moon than I do.
