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Author: RetiredVermonter Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 74759  
Subject: Nonprofit (church) investing Date: 4/2/2006 12:34 PM
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Here's a question:

I am a member of the Finance Committee for a halthy, growing, medium-sized, nonprofit, membership organization that, for various reasons, has found itself hurting from less money coming in vs money that must go out for programs, staff, etc. We do a lot of good in the community. As things stand now, we're being forced to use up money that is (or should be) "emergency" money in various funds.

Obviously, we wrestle with the usual choices: cut costs, staff, etc. vs somehow bringing in more money. The staff really are good people, and there are not many of them to begin with. We have also worked hard to find new ways to save money, too; this year, we even met in a smaller area than usual, from January to March, which saved a lot in fuel costs.

Our money comes from three sources:
- Dues
- Fundraisers
- Interest/other income from existing investments and funds

Dues are up but being looked at further, and fundraisers are improving, but we still need to do better -- which brings me to the third "arm" of the income group: income from investments and funds.

As a new member, I was stunned to find that we have "professional" advisors overseeing some half a million dollars, and that that money has been yielding just 5 percent per year for several years now!

I don't think that's acceptable. Am I wrong in thinking that our so-called money managers, even if conservative, should be able to get us more than 5 percent yield on that kind of money? If we could jack that up to even 8 percent, we'd cope with our money problems!

In my own case, for example, I've been able to make 7-8 percent YTD (3 months) in my own IRA, even though most is in simple, diverse mutual funds! Admittedly, I also do some buying and selling of equities, too, and I would not necessarily expect our organization (or money managers) to charge off and start doing that, but what kind of annual income should a nonprofit be able to get, conservatively, with that kind of money?

Is 5 percent realistic?

How about 7-8 percent?

More?

Seems to me that, if we have "pro's" shepherding our money, they should do more, and I'm looking for comments before I start "thrusting at windmills" (!) and pressing hard for changes.

Thanks!

Vermonter
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