Five strategy considerations for nonprofits amid volatility

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February 22, 2023

3 MIN READ

Nonprofits have had a lot to overcome in recent years, and while some react by making changes to their asset allocation, fundraising, or spending, that’s not always the best option. Market volatility can hit hard, even when you try to prepare for it, and it impacts more than just your organization’s plans. Donors and partners are impacted too. But we have some ideas on how to turn those disappointing cards to a hand with the potential for shoring up against market volatility. Here are five considerations to help strengthen your strategy for the future.

Raise and hold your fundraising money for grants and expenditures in volatile markets.

Don’t rebalance in haste. It’s part of a long-term strategy and you need to do a risk/stress exercise as part of your process.

Rebalancing investment portfolios is a disciplined practice that can pay off over the long run. Focus on long-term strategies and risk management exercises to analyze and document portfolio decisions. Review investment policies and consider editing inflation language to be consistent with that used in long-term capital market assumptions, which drive asset allocations, as opposed to short-term swings in the more volatile CPI.

Use your money for long-term values not short-term/what’s needed now.

Be efficient and thoughtful in the ways that you support grantees and partners.

Thinking outside the box for ways to support grantees can help support partners through tougher times. Can multi-year grant commitments be used as collateral for short-term bridge loans? Or is the due diligence you do on your grantees something that could be shared or serve as a referral to local groups that support nonprofits networking efforts?

People have less to give in marketing down turns, so your longer/valued partner relationships matter.

Given the perpetual nature of most foundation portfolios, revisiting the strategic asset allocation to ensure it still aligns with your mission and goals is prudent, and helps to prevent short-term reactions based on current and changing market conditions. As always, it is wise to perform detailed risk analyses, like stress tests, that quantify potential impacts to portfolio values, liquidity, and spending distributions.

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This information is provided by SEI Investments Management Corporation (SIMC), a registered investment adviser and wholly owned subsidiary of SEI Investments Company (SEI).

Investing involves risk including possible loss of principal. There can be no assurance goals will be met nor that risk can be managed successfully. This material represents an assessment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. This information should not be relied upon by the reader as research or investment advice and is intended for educational purposes only.

Five strategy considerations for nonprofits amid volatility

Five considerations for your strategy during market volatility

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Please include any comments that will help us process your request.

I understand SEI may send future emails to me, even if I opted-out before, and that I can opt-out again later.

Improve efficiency and strategic focus with OCIO

We act as an extension of your staff, focused on your long-term goals. We’ll give you dedicated staff, expert advice, timely manager changes, risk monitoring, and goals-focused reporting.

Insights for nonprofits

Five considerations for your strategy during market volatility

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Please include any comments that will help us process your request.

I understand SEI may send future emails to me, even if I opted-out before, and that I can opt-out again later.

Improve efficiency and strategic focus with OCIO

We act as an extension of your staff, focused on your long-term goals. We’ll give you dedicated staff, expert advice, timely manager changes, risk monitoring, and goals-focused reporting.

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