The expectations of charitable donors are “strongly influenced” by the level of investment management services they receive in the for-profit investment sector, according to a new white paper from Envestnet.
The expectations of charitable donors are “strongly
influenced” by the level of investment management services they receive in the
for-profit investment sector, according to a new white paper from Envestnet.
“Donors expect philanthropic organizations to provide the
same caliber of service as their banks, brokerage firms and custodians, but
these non-profits lack the integrated technology solutions they need to effectively
compete for donor assets,” said James Lumberg, co-founder and executive vice president
at the New York-listed firm.
The white paper, entitled Endowments and Foundations:
Adapting to a New Paradigm, examines
the “evolving needs” of foundation and endowment organizations, which Envestnet
believes have historically been underserved by traditional investment
The white paper highlights that while endowments and
foundations managing investments for charities and foundations are typically
exempt from Investment Adviser Act of 1940 registration, they still have many
of the same needs as their registered counterparts.
“As charities begin to manage their own investment portfolios
and serve as non-registered investment advisors for ‘sister’ or partner
entities, their needs expand dramatically,” Envestnet, the provider of wealth management technology and
services to investment advisors, said.
According to Pamela Jacobs, a principal at PFJ Consulting,
many philanthropic organizations are surprised to learn that upgrading their technology
saves them more time and money than creating their own solutions from scratch.
The white paper recommends that non-registered investment
advisors obtain more “bang for their buck” by outsourcing to investment service
providers such as RIA platforms, turn-key asset managers and broker-dealers.