Reply To: Reserves are great to have – how to invest and manage them

Mark H (forum moderator)

    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.

    We Want to Hear from You!

    The current version of the Commons is in beta testing mode meaning we are constantly looking for feedback to improve the experience.  Have some thoughts?  Want to see different content?  Have a question about how this all works?  Let us know!

    Contact us!