Case study: a religious institution

A religious institution was spending more money than its investments were generating, and as a result, was having cash-flow challenges. There were a lot of needs to fulfill, from running a school and hospital to providing housing and health care for their nuns.

We met with their investment committee to gain an understanding of their objectives and concerns, evaluate their cash flow needs, and discuss their preferences as conservative and socially responsible investors.

We had many candid conversations about risk/reward balance – that drawing 7% to 8% a year from the portfolio for their needs might require taking more risk. We proposed investment recommendations designed to generate a higher return, and closely monitored the market and the actions of the individual fund managers. During up markets, we raised cash and built a 12-month reserve, so they would be less prone to depleting their portfolio in a down market.

We were highly proactive and vigilant about the day-to-day management of the cash flow, and also helped them understand the importance of managing the other side of the balance sheet – liabilities. The organization had outstanding loans and bonds, so we worked with their treasurer and investment committee members to create a workable plan for helping them retire this debt.

Today, they are fiscally sound and their investments are generating the returns needed to run their operations, care for their sisters and fulfill their important and worthy missions.

This material is not intended for use as investment advice. It does not guarantee the attainment of your goals. Individual results will vary. There is no assurance that any investment strategy will be successful. Investing involves risk and investors may incur a profit or a loss. Asset allocation and diversification do not ensure a profit or protect against a loss. Past performance is not indicative of future results.