Case Study: Foundation Saves Big Bucks

Situation:

A major nonprofit institution had a long-standing governing committee and an established relationship with an investment service provider for its eight endowments. The committee was comprised of key community, business, and related industry leaders with years of board experience. Each of the committee members was both skilled and conscientious of their stewardship roles.

While the committee met on a regular basis, its members were growing frustrated with the lack of usable information from which to measure the investment provider’s performance. Additionally, with their state’s adoption of the Uniform Prudent Management of Institutional Funds Act (“UPMIFA”) the committee was unsure about the specific mandates surrounding legal fiduciary duty, which fostered doubts about whether they were fulfilling their legal and ethical obligations.

Approach:

Roland|Criss:

• Assisted the client in understanding its responsibilities in overseeing the foundation as well as its vendors’ practices.
• Created a roadmap for the client detailing how to upgrade the client’s fiduciary system in accordance with UPMIFA and hold its service provider accountable to a higher level of performance standards.
• Managed an RFP process for the client in search of new service providers (when the client’s current service provider was reluctant to reflect revenue streams for each of its areas of service).

Result:

Roland|Criss helped the foundation reduce its fiduciary budget (fees paid to investment service providers) by 30% annually. This savings allowed the foundation to maximize its annual donations to its affiliated cause. While reallocating the fiduciary budget, Roland|Criss implemented a new system for measuring service providers’ performance and eliminating undisclosed conflicts of interest

Finally, a new standard was adopted, equipped with strategic and operational policies that helped increase the committee’s level of fiduciary assurance to the foundation, create greater accountability amongst its investment vendor community, and foster trust between the foundation and its financial partners.