Case Study A:
Establishing a Quasi-Endowment
IMPORTANT INFORMATION: The case study presented is hypothetical and for illustrative purposes only. It does not represent an actual client, and no representation is made that any investment strategy will achieve similar results. Investment outcomes may vary based on individual circumstances, objectives, and market conditions. All investments involve risk, including the possible loss of principal. Past performance is not indicative of future results.
Organization
A regional nonprofit with growing reserves seeking to establish a board-designated quasi-endowment to support long-term financial sustainability.
Challenge
The organization relied primarily on fundraising and annual donations to support its programs. Leadership wanted to create a permanent pool of capital that could generate a stable source of investment income while preserving funds for the future
Approach
Gaard worked with the board and finance committee to define the role of a quasi-endowment within the organization’s financial structure. Discussions focused on long-term objectives, risk tolerance, and a sustainable annual spending rate Gaard developed a customized Investment Policy Statement outlining governance procedures, asset allocation ranges, and spending guidelines. The firm also assisted in selecting a custodian and establishing a dedicated quasi-endowment account separate from operating funds.
A diversified long-term portfolio was then implemented to support growth while managing risk.
Outcome
The nonprofit established a formal quasi-endowment with defined governance, spending guidelines, and regular performance reporting to the board. The endowment now provides an additional source of income to support long-term program funding