Investment advice and solutions for non-profit organizations

We help non-profit organizations, such as charities and endowments and foundations, and healthcare organizations, invest for change. Our independent research, advice and tailored investment solutions seek to help you deliver better investment outcomes, while pursuing your mission. Our services flex to suit your needs.

Helping ensure sustainable philanthropy

Each non-profit organization is unique in its mission and approach, and so should be your investment portfolio. Your investments should work to provide long-term growth while reflecting what your organization stands for. This requires a bespoke approach to investment to help ensure that there are no nasty surprises which could disrupt your mission or damage your organization's reputation.

Embracing and embedding environmental, social and governance (ESG) factors into your investment strategy has the potential to help mitigate some of these risks, while helping ensure that you are across the latest investment opportunities.

Investment considerations for non-profit organizations

  • Alignment

    Aligning your portfolios to your mission demonstrates your commitment to issues important to your organization. It involves assessing asset managers, strategies and providers to ensure they are aligned to your objectives. It also requires a transparent monitoring and reporting framework to ensure investments remain aligned to your objectives and policies.

  • Efficiencies 

    Investors are currently faced with market volatility so it’s important to build robust portfolios, and strategic asset allocation, designed to deliver efficiencies and capture opportunities. Your portfolios should adhere to your overall risk appetite and take into consideration how fees and other costs that could impact the outcome of your financial goals.

  • Expertise

    Professional investment advice can help you navigate an increasingly complex investments market and define a strategy that is aligned with your goals. We can review your investments, including your asset allocation and approach, against your goals and help you identify which areas need to be prioritized. We provide sound advice to help you feel confident in your long-term investment strategy.

  • Flexibility

    It’s important that your portfolio is designed in a way that makes it responsive to changing circumstances and market movements. This flexibility means you won’t be caught off guard by adverse events and that your portfolio is well positioned to take advantage of potential opportunities that may arise. We can help you integrate flexibility into your strategy and portfolios.

  • Service standards

    When working with external advisors or consultants, you need to ensure that they have the experience and the capacity to build, manage and monitor your portfolio with the utmost care. We work as an extension of your team to help you address topics most important to you, like alternative investments, or sustainability. This will allow you to focus on other priorities to help achieve your mission.

  • Sustainability

    Investing sustainably is a key goal for many investors. There are a few areas to consider, including environmental, social and governance (ESG) considerations; diversity, equity and inclusion (DEI) factors and impact investing opportunities which seek to help investors address key issues without having to compromise on overall financial goals.

Three steps for reviewing and setting your strategy

You should carefully review your objectives and beliefs and assess whether they have been changed and how they can be documented. Below are some questions to help guide your review:

  • What is your timeframe for investment?
  • What return do you need?
  • How much do you plan to spend?
  • At what point does a market drawdown impact your ability to meet your spending requirements?
  • What are your sustainability goals?
  • What positive impacts do you want your investments to have?
  • Who are your stakeholders and what do they need? For example, is reporting required?

It's important to align your investment strategy with your objectives and beliefs. You should consider having a broad opportunity set available across the full range of asset classes. Traditional asset classes, such as public equities, bonds and real estate, may not deliver the same returns in the future.

Consider how your strategy helps you achieve these goals and assess options if your current strategy doesn't help you achieve them. What strategic asset allocation helps you get the sustainable return you need, allows you to spend at the rate you need and fits with your risk appetite? How can you ensure your investments make a positive impact and are sustainable?

Once your objectives and strategy have been defined, you will need to source and allocate to quality asset managers that are best placed to deliver value for money and help you achieve your goals. Put a proactive review process in place so that these components can be changed when needed.

  • Are your asset managers serving you well?
  • What do you want to discuss or decide at the board/committee/management team level?
  • Are there other ways to invest that may allow you more time to focus on your core mission? 
  • Do you want more control over the types of companies to which your portfolio has exposure?
  • Do you have a team in place that has expertise to make investment decisions or does that sit with the board or a committee, do they have the necessary investment expertise?

Investment advice in action for a large charitable trust

One large charitable trust we worked with wanted to build a longer-term strategy, incorporating sustainability and the ability to fund the grants at the core of the trust’s mission. The trust’s investments were not well diversified and were exposed to potentially significant risk from falling asset prices.

Meanwhile, the trustee board needed to manage the operational aspects of its investments, however its in-house team didn’t have the resources and expertise to do so.

We worked with the trustee board to develop a clear strategy that was designed to support a sustainable level of grants each year, while seeking to retain the real value of trust assets over the long term. Together, we implemented a robust, diversified and ESG-aware investment strategy, helping reduce risk and position the fund to access potential opportunities.

We then implemented the strategy on behalf of our client through a range of highly-rated asset managers that were reviewed and assessed by our global research team. We helped them efficiently access private market opportunities without the need for additional internal operational resources. The client now makes investment decisions based on better reporting and transparency around their portfolio. By working as an extension of their team, we provide our client with the opportunity to focus on other priorities for their mission.

Potential key benefits for the client:

  • Improved governance structure

  • Asset managers and strategies

  • Integration of ESG considerations

  • Reduced investment costs and risks

  • Improved overall returns

Common questions from non-profit investors 

Delivering outcomes for Not-For-Profit clients propelling their mission to a brighter future

Your mission and goals come first

Each non-profit it is unique, driven by its mission, vision, values, and objectives.

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Mercer investments and retirement consulting: How we can help

Whether you’re an employer, institutional investor, nonprofit organization, financial intermediary or family office, Mercer investments and retirement consulting aims to help you develop an investment solutions strategy unique to your situation, as well as provide the service and support you need.

  • Implementation and OCIO

    We can help you define, develop and implement your investment strategy by addressing areas such as governance, risk, sustainability and diversification. We flex our services to suit your needs and help you achieve your investment goals.

  • Sustainable investments 

    We help you build a sustainable investment strategy that integrates environmental, social and governance (ESG) considerations; diversity, equity and inclusion (DEI) factors and seeks an optimal mix between positive change and favorable returns.

  • Alternative investments

    Leveraging our existing relationships with hundreds of asset managers around the world, we can help you identify and source new investment strategies, opportunities, ideas and innovations across private markets and hedge funds. 

  • Strategic research 

    Become a member of the MercerInsight® Community today to get access to strategic research from hundreds of thought leaders around the world, including Mercer and third-party publishers. It’s complimentary and easy to join.

  • Asset manager research 

    By subscribing to MercerInsight®, an alliance with eVestment, you can gain access to data, analytics and our forward-looking research on asset managers and thousands of investment strategies across both public and private markets. 

  • Managing investment risk

    Our Mercer Sentinel team can help you conduct due diligence and mitigate operational risks across your portfolios and strategies. We assess asset managers, custodians and other service providers to help you deliver on your governance objectives.
We believe our significant scale and well-resourced team are best positioned to help you understand financial markets, construct an appropriate investment portfolio, and set out a long-term, sustainable strategy aligned with your organization’s goals and mission.

Related insights

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    See our Important Notices

    1. ESG investing refers to environmental, social, and governance considerations that may have a material impact on financial performance, and therefore are taken into account, alongside other economic and financial metrics, in assessing the risk and return potential of an investment. Thematic investing involves investing with a goal, at least in part, to achieve an impact on an environmental, social, or governance issue, alongside generating return and mitigating risk. As always, the decision whether to invest in ESG-themed options, like all options, must be made pursuant to a prudent process with the objective of advancing the financial interest of the plan and its 
    2. Fee savings cannot be guaranteed.