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No. of Recommendations: 6
Kevin,

Who is urging them? What is the stated purpose of those urging them?

My knee jerk reaction having been part of many non-profits is that I don't trust the suit trying to "help" us when it just so happens that either they happen to have a product that helps or they have a friend that does. Also there are many very smart in their field folks who drink the kool-aid marketed by Wall St. These folks are well intentioned and they just happened to be reading in Barons or some other mag that bonds are the place to be. I like to read Barons when I have a 1/2 hour to kill in the library or some Dr.'s office, it doesn't mean that I agree with their headline articles.

Is this non-profit seeking to grow some of their assets? Do they expect to hold these assets for an extended period?

Honestly the simplest and safest approach would probably be creating a sub committee and opening a Treasury direct account and stashing funds that don't need to be tapped for several years or decades in a ladder of some sort. This would also work for "working principal funds" where some amount of money is invested and the returns from that investment are what is deployed for the non-profits projects. Treasury direct has no friction costs, no management costs and is as "risk free" an asset as can be found. Are you going to make a killing investing in Treasuries? Nope but you don't have to worry about Schister and Schister nickle and diming you either.

jack
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