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What Non-profits Should Know Before Engaging With Money Managers

Trustees need to acquire a basic understanding of financial instruments

In our previous articles, we looked at how charities can find the right balance between taking too little and too much risk in achieving their objectives. We also talked about how an investment philosophy shapes the strategy and style of investment.

This article, which discusses what charities need to know to have informed conversations with external money managers, is the sixth in a series based on our forthcoming book Good Practices for Managing Funds for Non-Profit Organisations.

To effectively fulfil their fiduciary duty to the charities that they work for, trustees and investment committee members need to acquire at the very least a basic understanding of financial instruments. For them, this knowledge is critical to having informed oversight of external money managers hired to manage the charity’s funds. Having such knowledge will enable trustees and investment committee members to ask the right questions, ensure that external money managers are using appropriate financial instruments in keeping with the charity’s investment philosophy, thereby becoming responsible stewards of the charity’s resources.

Please select this link to read the complete blog post from Insead Knowledge.

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