A Fiduciary's Guide to Nonprofit Investment Policy Statements
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- 12 min read
An Investment Policy Statement (IPS) may serve as a foundational document for a nonprofit's financial stewardship, translating an organization's mission into a tangible investment strategy. It is the framework that can guide a board, investment committee, and financial advisors, intended to promote alignment, discipline, and prudent management of charitable assets. Developing a robust IPS may seem daunting, but it can be a critical governance tool that helps protect the organization and its fiduciaries. For boards and finance committees seeking a starting point, reviewing a well-structured nonprofit investment policy statement example can provide valuable clarity on purpose, risk, spending, and oversight.
This article simplifies that process by compiling and analyzing a variety of high-quality IPS examples and templates from trusted sources. We will move beyond simple descriptions to offer a strategic breakdown of what may make each example effective. Readers will find full templates and samples they can consider adapting, complete with direct links and our analysis. We will explore how different organizations, from community foundations to operating charities, structure their policies to meet specific needs.
By examining these real-world documents, readers may gain actionable insights into crafting key sections, including:
Purpose and Governance
Asset Allocation and Risk Tolerance
Spending Policy and Liquidity Needs
Manager Selection and Monitoring
Our goal is to provide a clear, practical guide to help your organization build a policy that can support its financial future and amplify its impact. Each nonprofit investment policy statement example is chosen to offer replicable strategies, helping your board move from theory to a finalized, actionable document with confidence.
1. Parkview Partners Capital Management: IPS Implementation Services
Parkview Partners Capital Management provides a distinct service for nonprofits that may already have a foundational investment framework in place. Instead of offering a generic template, Parkview can act as a steward, implementing and actively managing endowment and reserve portfolios directly under an organization's existing Investment Policy Statement (IPS). This IPS-first methodology is a standout feature, positioning Parkview as a fiduciary partner who can execute the specific directives and intentions set forth by a nonprofit's board.
This approach might be valuable for organizations that have invested significant time in creating a detailed IPS for their own use and now require specialized support for its execution. Parkview’s service may strengthen governance by providing disciplined risk oversight, clear processes, and transparent reporting that aligns directly with the IPS mandates.
Strategic Analysis: The IPS-First Model
Parkview's decision to work from an existing IPS, rather than providing one, is a core strategic element. It respects the nonprofit's internal governance and mission focus, helping to ensure investment activities are a direct reflection of the board's established goals. This model can shift the dynamic from a vendor relationship to a fiduciary partnership. By implementing an existing IPS, Parkview reinforces the board's authority and helps ensure that all portfolio management, from asset allocation to spending policy adherence, is directly tied to the organization’s foundational document. This may create a powerful layer of accountability and mission alignment.
Implementation Considerations
For Boards with a Developed IPS: If a finance committee has already created a robust IPS, Parkview can step in to provide the implementation and ongoing management. This might free up staff and board members from the administrative burdens of portfolio oversight, allowing them to focus on programmatic impact.
Strengthening Governance and Reporting: The firm can provide detailed performance and compliance reporting tailored to the IPS. This documentation might be critical for board meetings, audits, and demonstrating fiduciary responsibility to stakeholders.
Access to Institutional Resources: Through its affiliation with Stratos Wealth Partners, Parkview offers the research, technology, and compliance infrastructure of a large institution, but with the personalized attention of a boutique advisory team. This may be a significant benefit for nonprofits that need deep resources but prefer a direct, consistent relationship with their advisor.
2. A Comprehensive Nonprofit Investment Policy Statement Example from JPMorgan
For organizations seeking a legally rigorous and structurally sound foundation for their IPS, the template developed by JPMorgan in collaboration with the law firm Simpson Thacher & Bartlett LLP is an exceptional resource. Distributed by the National Center for Family Philanthropy (NCFP), this 20-page document is not a simple fill-in-the-blank form. Instead, it serves as a robust, governance-focused starting point designed to be tailored with the guidance of legal and financial counsel. It stands out by providing a detailed framework that may significantly reduce the initial drafting time for a board or investment committee.
This nonprofit investment policy statement example might be useful for established foundations or larger operating charities that require a document with extensive detail. Its free availability via the NCFP website makes it an accessible option for consideration by organizations of all sizes, though its complexity may be more than a smaller nonprofit needs.
Strategic Analysis
The template’s strength may lie in its comprehensive coverage of governance and fiduciary duties. It dedicates significant space to defining the roles and responsibilities of the Board of Directors, the Investment Committee, and external advisors. This clear delineation might help prevent ambiguity and ensure all parties understand their obligations. Another key feature is its inclusion of placeholder language related to state-specific laws, such as the Uniform Prudent Management of Institutional Funds Act (UPMIFA). This prompts organizations to consult with legal counsel to help ensure the final document aligns with local regulations, which can be a critical step for fiduciary compliance.
Implementation Considerations
Engage Counsel Early: It may be prudent not to adopt this template without professional guidance. Its length and legal depth suggest a review by both legal and financial advisors to customize it for an organization’s specific circumstances, mission, and risk tolerance.
Use as a Discussion Guide: The document’s detailed sections on asset allocation, liquidity needs, and spending policy can be used as an agenda for investment committee meetings. Going through it section by section can facilitate a structured conversation and build consensus.
Focus on the “Why”: While the template provides the "what" (e.g., rebalancing bands, manager criteria), a committee must document the "why" behind its choices. For example, if a target asset allocation is set, the IPS minutes might reflect the discussion on how that specific allocation supports long-term goals and spending needs.
3. Nonprofit New York – Sample Investment Policy
For boards seeking a practical, easy-to-understand model, the sample investment policy from Nonprofit New York offers a balance between clarity and necessary detail. It is designed for operating nonprofits that manage various types of funds, including cash reserves, board-designated funds, and true endowments. Its plain-English approach might make complex financial governance accessible to board members who may not have deep financial expertise.
This nonprofit investment policy statement example might be valuable because it provides distinct guidance for different pools of capital within a single document. Available as a free PDF download, it may serve as an excellent starting point that can be adapted with the help of professional advisors. A potential drawback is its PDF format, which requires manual transcription into an editable document.
Strategic Analysis
The policy’s main advantage may be its functional design, which segregates investment guidelines by fund type: operating, reserve, and endowment. This structure can help a nonprofit apply different risk and liquidity rules to each pool of money, a critical practice for sound financial management. For example, it suggests keeping operating funds in highly liquid, lower-risk vehicles while allowing for a more growth-oriented strategy for long-term endowment funds. Another strong feature is the inclusion of a sample Endowment Spending Policy as Appendix A. This section directly addresses a common challenge by providing a clear formula and procedure for determining the annual draw from the endowment.
Implementation Considerations
Adapt State-Specific Language: The document references NYPMIFA (New York's version of the Uniform Prudent Management of Institutional Funds Act). A first step might be to work with legal counsel to replace this with the version of UPMIFA or other relevant statutes applicable in your state.
Transcribe and Customize: Since the resource is a PDF, it will need to be retyped. This can be an opportunity to customize each section. Discuss and document your specific risk tolerance, liquidity needs, and spending rate.
Use the Appendix as a Model: The endowment spending policy appendix is a powerful tool. It can be presented to a finance or investment committee as a starting point for a discussion about how an organization will calculate and approve its annual endowment draw.
4. Council on Foundations – Sample Foundation Investment Policy
For boards and investment committees seeking a straightforward, accessible starting point, the sample investment policy from the Council on Foundations offers a concise model. Unlike longer, legally dense documents, this sample is an actionable template focused on core principles. It may be well-suited for small-to-mid-sized foundations or public charities with growing reserves. Its brevity might make it less intimidating for volunteer boards to digest and implement.
This nonprofit investment policy statement example stands out because it provides concrete, tangible allocation ranges and restrictions that may translate directly into oversight actions. Available as a free PDF, it can serve as a practical tool for organizations that need a functional policy without the complexity required by larger institutional investors.
Strategic Analysis
The strength of this sample may lie in its directness. It avoids jargon and gets straight to essential components: investment philosophy, return objectives, and asset allocation. By providing specific target ranges for equities, fixed income, and cash, it can give an investment committee a clear framework for discussions with financial advisors. This may help boards operationalize their oversight role. The document also includes clear guidance on prohibited investments and credit quality constraints for fixed income. These explicit guardrails can be crucial for managing risk and aligning the portfolio with prudent investor principles.
Implementation Considerations
Update and Customize: The sample includes references to specific market indices that may need to be updated. Working with a financial advisor can help in selecting appropriate, modern benchmarks that reflect a chosen investment strategy and asset classes.
Supplement with Governance Details: Because this template is light on governance roles, one might consider creating a separate, simple charter for the investment committee. This document could define the roles of the committee chair, members, and staff.
Use Ranges as a Starting Point: The provided asset allocation ranges (e.g., 50-70% for equities) can be a good conversation starter. A committee might discuss whether these ranges fit the organization's specific risk tolerance and liquidity needs, adjusting them as necessary and documenting the rationale.
5. AICPA & CIMA – Not‑for‑Profit Sample Investment Policy
For nonprofit boards and finance committees seeking an authoritative and efficient starting point, the sample policy from the AICPA & CIMA Not-for-Profit Section is another choice to consider. This resource is designed with governance and audit-readiness in mind. Its primary strength may be its concise, editable Word format, which provides a solid but not overly prescriptive framework. It is built to align with the standards and controls that auditors might look for during financial reviews.
This nonprofit investment policy statement example might be valuable for small to mid-sized organizations that need a functional, compliant policy without the intimidating length of institutional-grade documents. It is a streamlined tool that can serve as a foundational policy. However, access is a key consideration, as the template is a benefit for members of the AICPA & CIMA Not-for-Profit Section, which requires a subscription.
Strategic Analysis
The template's greatest asset may be its origin. Coming from the AICPA & CIMA gives it inherent credibility with auditors, accountants, and finance professionals. Adopting a policy based on this structure could simplify audit conversations, as it demonstrates that the board is following recognized practices for internal controls. While its conciseness is a benefit for many, it's also a potential limitation. The template may be less detailed than longer-form alternatives and may require augmentation to address more complex situations, such as alternative investments or specific ESG criteria.
Implementation Considerations
Assess Membership Value: Since access requires a subscription, an organization should evaluate the full scope of benefits. The membership includes a wide array of resources beyond this template, which may justify the cost for a finance team.
Use as a Baseline for Discussion: This template could be an ideal document to bring to a first investment committee meeting. Its clear sections on objectives, risk tolerance, and responsibilities can provide a natural agenda to guide the conversation.
Augment with Specifics: One can treat this template as a starting point. A committee will need to add specific details relevant to the organization, such as target asset allocation percentages, specific benchmarks for performance measurement, and liquidity requirements.
6. Raffa Investment Advisers – Sample Investment Policy Statement
For nonprofit boards seeking a practical, action-oriented template, the sample IPS from Raffa Investment Advisers offers another starting point. As a registered investment adviser focused on the nonprofit sector, Raffa provides a resource that speaks the language of associations and charitable organizations. The sample is designed for straightforward adaptation and is accompanied by guidance on related governance topics, making it a useful tool for board education.
This nonprofit investment policy statement example is particularly effective for organizations that want to move efficiently from drafting to implementation. The free downloadable document is framed with the operational realities of nonprofits in mind, emphasizing clear reporting, compliance monitoring, and spending policies.
Strategic Analysis
Raffa’s sample shines in its direct approach to connecting the IPS to a nonprofit’s financial operations. The template is supported by companion content on the firm's website that discusses spending and reserve policies, which can help committees understand how the IPS fits into the broader financial management ecosystem. The document also provides adaptable language to integrate values-based or ESG (Environmental, Social, and Governance) considerations. For organizations looking to align their investment portfolio with their mission, this built-in framework might provide a direct pathway for discussion.
Implementation Considerations
Educate Your Board with Companion Content: Using the articles on spending and reserve policies from Raffa’s website as pre-reading for a finance committee can help ensure all members share a baseline understanding before customizing the IPS template.
Define Your Values-Based Approach: If an organization is considering ESG or mission-aligned investing, the relevant sections of the template could serve as a specific agenda item. The language provides a starting point to define what "values-based" means for a nonprofit.
Customize Reporting and Monitoring Sections: Pay close attention to the sections on performance reporting and compliance monitoring. Tailoring this language can help define exactly what information the board expects to see from its investment advisor, how often, and in what format.
7. WeConservePA Library – Sample Nonprofit Investment Policies
For boards or investment committees that learn best by comparison, the WeConservePA Library is a valuable destination. Rather than offering a single, prescriptive template, this resource provides a curated collection of real-world investment policies from various nonprofit organizations. This approach allows a committee to see how different groups have structured their documents, serving as a practical idea generator.
This collection of nonprofit investment policy statement example documents is most effective for organizations in the early stages of drafting their IPS. By reviewing several finished policies side-by-side, a committee can identify clauses and structural elements that resonate with their specific mission. All samples are freely available for download.
Strategic Analysis
The primary strength of the WeConservePA collection is its function as a comparative tool. A nonprofit can mix and match elements. For instance, one might prefer the governance language from one sample but find the asset allocation rules from another are a better fit. The library also includes a companion guide that explains the purpose and components of an IPS. This educational brief acts as a primer, which can be important for building consensus and ensuring the final policy is a true reflection of the organization’s strategic objectives.
Implementation Considerations
Create a Comparison Matrix: Downloading the files and creating a simple spreadsheet to compare key sections across the different samples can be a useful exercise. Listing policies and IPS sections can help track which versions you like best.
Start with the Companion Guide: Before diving into the samples, having an entire investment committee read the "Conservation Tools" brief on Investment Policy Statements can help ensure everyone starts with the same foundational knowledge.
Adapt, Don't Just Adopt: These samples can be used as inspiration, not as final documents to be copied verbatim. An organization's specific mission, liquidity needs, time horizon, and state laws (like UPMIFA) must inform the final language. Borrowed clauses should be customized with the help of financial and legal advisors.
Putting Your Policy into Practice
Moving from theory to practice is a critical stage in establishing strong financial governance. Throughout this guide, we have examined a range of nonprofit investment policy statement example documents. The purpose has been to show that an IPS is not merely a compliance document; it can be a strategic charter that aligns an organization's financial assets with its long-term mission. While the sections of an IPS are universal, their content should be uniquely tailored. An IPS for a large, endowed foundation will likely have different liquidity needs and risk tolerances than one for an operating charity. The real work begins by using these examples and templates as a foundation to build a policy that reflects your organization's specific circumstances, goals, and values.
An IPS should not be created in a vacuum. Involving the investment committee, key board members, senior management, and your investment advisor can ensure all perspectives are considered and may foster collective ownership of the final document. The IPS is also a living document. Markets, regulations, and your organization's needs might change. A policy should include a clear schedule for regular review, typically annually, to ensure it remains relevant.
A well-crafted Investment Policy Statement is a blueprint for financial stewardship, but its successful execution may depend on a partnership with an advisor who understands the unique needs of nonprofit organizations. The team at Parkview Partners Capital Management specializes in providing institutional investment management and fiduciary guidance to foundations and charities. We can help your organization translate the principles in your nonprofit investment policy statement example into a disciplined, mission-aligned investment strategy.
Parkview Partners Capital Management is a registered investment advisor. This article is for informational purposes only and is not intended as investment, legal, or tax advice. Please consult with your professional advisors before taking any action. Past performance is not a guarantee of future results. To discuss how these strategies might apply to your specific situation, contact Parkview Partners Capital Management for a personalized consultation. For more information, please see our Form CRS and website disclaimers.
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