Investment Policy Statement Best Practices INT1345-Print

INVESTMENT POLICY

INSTITUTIONAL

Investment Policy Statement Best Practices

WHAT IS AN INVESTMENT POLICY STATEMENT? An investment policy statement is a customized document designed to serve as a road-map of a non-profit’s investment program to help ensure that the organization can continue its mission. This document defines the objectives, constraints, unique circumstances, and oversight procedures that govern investment-related activities within a non-profit organization.

THE IMPORTANCE OF INVESTMENT POLICY Investment policy statements, which include asset allocation strategy as a key component, form the essence of endowment and foundation investment practices. The investment policy statement becomes a compass that guides the board and investment consultant, and can help:    Serve as a road-map for non-profits seeking to meet their objectives while balancing portfolio risk    Provide thorough understanding of a portfolio’s purpose and objective    Define strategic and tactical asset allocation strategies    Guide the evaluation and selection of investment managers and advisors    Discourage random and emotional investment decisions inconsistent with prudent management principles    Promote long-term investment decision- making

PURPOSE

ROLES & RESPONSIBILITIES

MONITORING & REPORTING

SPENDING POLICY LEVEL & METHOD

INVESTMENT CONSTRAINTS

MISSION

ASSET ALLOCATION TARGETS

INVESTMENT & SPENDING RISK TOLERANCE

INVESTMENT OBJECTIVES

Commerce Trust Company

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