Investment Strategy for Do Gooder Inc. a good charity & nonprofit

Effective financial management is crucial for the sustainability and growth of a good charity. A well-planned investment strategy ensures that our resources are optimally utilized, providing a steady income stream to support our mission and programs. This document outlines our investment strategy, designed to balance risk and return while adhering to ethical considerations and regulatory requirements.

Objectives

1. Preserve Capital: Ensure the safety of the principal amount invested.
2. Generate Income: Provide a reliable source of income to fund operations and initiatives.
3. Growth of Funds: Achieve long-term capital appreciation to support future needs.
4. Liquidity: Maintain sufficient liquidity to meet short-term obligations.

Investment Policy Guidelines

1. Diversification: 
  - Asset Classes: Invest in a mix of asset classes including cash, fixed income, equities, and alternative investments to spread risk.
  - Geographic Diversification: Consider both domestic and international investments to mitigate regional risks.
  - Sector Diversification: Invest across various sectors to avoid overexposure to any single industry.

2. Risk Tolerance:
  - Conservative Approach: Given our nonprofit status, prioritize low to moderate-risk investments to protect our capital.
  - Regular Review: Continuously monitor and adjust the risk level based on changing economic conditions and organizational needs.

3. Ethical and Socially Responsible Investing:
  - Screening Criteria: Avoid investments in companies or sectors that conflict with our mission and values.
  - Positive Impact: Prefer investments in entities with strong environmental, social, and governance (ESG) practices.

4. Time Horizon:
  - Short-Term Needs: Maintain a portion of investments in highly liquid, low-risk assets to meet operational expenses.
  - Long-Term Goals: Allocate a portion to higher growth potential assets for future funding requirements.

Investment Categories

1. Cash and Cash Equivalents:
  - Purpose: Ensure liquidity and preserve capital.
  - Instruments: Savings accounts, money market funds, short-term government securities.
  - Allocation: 10-20% of the portfolio.

2. Fixed Income:
  - Purpose: Generate stable income with low to moderate risk.
  - Instruments: Government bonds, high-quality corporate bonds, municipal bonds.
  - Allocation: 30-50% of the portfolio.

3. Equities:
  - Purpose: Achieve capital growth over the long term.
  - Instruments: Domestic and international stocks, mutual funds, index funds.
  - Allocation: 30-40% of the portfolio.

4. Alternative Investments:
  - Purpose: Diversify and enhance returns.
  - Instruments: Real estate, private equity, hedge funds.
  - Allocation: 10-15% of the portfolio.

Governance and Oversight

1. Investment Committee: 
  - Composition: Include board members, financial experts, and staff.
  - Responsibilities: Develop and oversee the investment policy, review performance, and make adjustments as needed.

2. Professional Management: 
  - Advisors: Engage reputable investment advisors or managers to assist with portfolio management.
  - Reporting: Regular performance reports to the board and stakeholders, ensuring transparency.

3. Review and Adjustments:
  - Annual Review: Conduct a thorough review of the investment strategy annually.
  - Market Conditions: Make adjustments based on market conditions, performance, and changing organizational needs.

Conclusion

A thoughtful investment strategy enables Do Gooder Inc. a good charity and nonprofit to secure its financial future, ensuring that we can continue to serve our community effectively. By adhering to these guidelines, we aim to balance growth, income, and security, while staying true to our mission and values.