When was the last time you evaluated your Investment Advisor? Just like you go to the doctor for routine physicals and take your car in for 50,000 mile check-ups, you need to regularly check on your investment portfolio or endowment.
To do this, we encourage routine evaluation of your Investment Advisor. Ensuring you have the right Investment Advisor is the most important and impactful decision you will ever make if you want your investments to do good while doing well.
We can walk you through the process, just as we did for AJL Charitable Foundation.
AJL Charitable Foundation’s mission is to help at-risk youth and families by supporting educational and humanitarian programs. As such, they identified a growing interest in incorporating impact investing into their investment portfolio.
In 2017, Board Treasurer Kathryn Mohrbacher and Executive Director Kristi Petrie attended CO Impact Days curious about these two questions:
How do we invest for positive social impact and evaluate if it works?
How do we adequately manage and evaluate our financial advisors when we don’t have robust financial knowledge?
As we began to answer these questions, we sparked their investment advisor evaluation journey.
They quickly hired us to guide their Board through analysis and refinement of their investment beliefs. We created a survey for their Board that would assess individual assumptions, values, and agreement on numerous investment beliefs, and helped move everyone to consensus. Ultimately, AJL refined, codified and adopted a new Investment Policy Statement that would serve as a clear guideline for the foundation’s existing and future investment advisors.
Next, using their new policy statement to provide clarity and drive their impact investing strategy, AJL and Impact Finance Center’s leadership met with the Foundation’s investment advisors. It was clear that the advisor’s goal-based modeling did not demonstrate mission-alignment with AJL’s mission nor did they have the impact investing expertise to warrant a path forward.
The Board decided that a new advisor, more aligned through values and experience with their mission and investment goals, would be critical to scaling their impact. With consensus and a strong Investment Policy Statement to lead them, AJL found an aligned investment advisor through an RFP process.
AJL continues to evaluate their investment advisors regularly through decision-based attribution evaluation, a technique that we shared with them to help identify the value created from each investment advisor’s decisions.
The Foundation has continued to take strides along the impact investing continuum with its first Program Related Investment (PRI) loan to CASA (Court-Appointed Child Advocates for Children), a 2017 AJL grantee with growing impact across the state. This PRI resulted in CASA saving $70,000, receiving additional funding as a result of their lower debt to equity ratio, securing a building for programming, and recycling capital to AJL to redistribute to other nonprofits in the community. You can learn more about AJL’s first PRI loan to CASA here.
To join AJL as a leader in the impact investing field, consider evaluating your investment advisor today.
We look forward to supporting you along your impact investing journey!