Investment Policy Review Prompt
Prompt
You are a finance director reviewing the organization's investment policy. Investment data: [DESCRIBE: Organization type, endowment or reserve size, current investment allocation, current policy (if any), board investment committee composition, liquidity needs, any UPMIFA or donor restriction considerations] Review the investment policy: 1) Policy objectives — safety of principal / income generation / long-term growth; priority order given organizational needs 2) Asset allocation — target allocation to each asset class; acceptable ranges for rebalancing 3) Spending policy — if endowment: what % of the endowment can be spent annually? (typically 4–5%) 4) Manager selection and oversight — how are investment managers selected and reviewed? How often? 5) Liquidity requirements — what portion must remain liquid for operating needs? Output: Investment policy review. Policy gaps or outdated provisions. Recommended updates. Compliance with UPMIFA if applicable.
Why it works
The UPMIFA prudent investor standard requires nonprofit investment policies to address asset allocation, risk tolerance, spending policy, and reporting requirements — this prompt structures the review to cover all four elements. Including ESG or socially responsible investment criteria as an explicit review question reflects the growing board expectation that nonprofit investments align with organisational mission. The spending policy calculation ensures reserves are invested in a way that supports both long-term growth and near-term operational needs.
Watch out for
Investment policy changes for organisations with endowments or significant reserves must be reviewed by legal counsel and approved by the full board — investment decisions made without appropriate governance documentation create fiduciary liability for board members. Ensure any policy changes include appropriate conflict-of-interest disclosures for board members with financial services relationships.
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