Nonprofit Managers Say Top Investment Priority Is Having Assets in Spendable Form

Nearly all investment managers for nonprofit groups say maintaining liquid assets — ones they can spend, if needed — is a top priority for this year, according to a new survey.

Ninety-eight percent of the 103 financial executives and investment-committee members from nonprofit organizations cited liquidity as a key focus in a December survey by the Nonprofit Management Research Panel at SEI, an asset-management firm in Oaks, Pa.

Nearly as many respondents — 96 percent — said concerns about inflation would be a priority for them in 2010.

Fiduciary responsibilities for organizations’ board members and investment advisers were the third most-commonly cited priority for the coming year, with 84 percent of respondents listing that as a priority.

The survey included nonprofit organizations with headquarters in the United States, and total invested assets ranging from $25-million to more than $1-billion. The largest share of the groups — 43 percent — were educational institutions, though the pool also included private and community foundations, social-service charities, hospitals, arts and cultural institutions, and religious groups.

Improving Access to Credit

The survey also revealed the following about the respondents’ organizations:

The groups have embraced alternative investments, such as hedge funds and private equity, with 88 percent saying they had invested some of their assets in alternatives. Nearly one in four groups said they invest 31 percent or more of their assets that way. The credit crunch may be easing: Eighty-seven percent of groups said they are no longer seeing a significant increase in the cost of borrowing. Seventy percent of the organizations said they use an outside investment consultant. Forty percent of respondents said their group has increased its overall percentage of assets held in cash.

A free summary of the report, “Outlook 2010: How Nonprofits Are Responding to Investment Challenges,” is available by sending an e-mail request to seiresearch@seic.com.