Liquidity a top fiduciary priority in 2010

In the wake of the economic meltdown, virtually all large nonprofits and foundations say portfolio liquidity will be a fiscal priority in 2010, a new study says.

That focus already has begun, with four in 10 respondents saying they have increased the percentage of their assets in cash reserves, says a survey by SEI of 103 organizations with assets ranging from $25 million to $1 billion.

The fiduciary roles and responsibilities of trustees and investment consultants will be a focus for more than eight in 10 groups, the survey says.

Currently about seven in 10 groups use investment consultants, and four in 10 of those say they will evaluate that relationship over the next two years.

“Nonprofits are demanding portfolio-construction advice that addresses their challenges, such as how to build portfolios with fewer restrictions when accessing funds,” Carolyn McLaurin, vice president and managing director of SEI’s Nonprofit Group.

Almost a quarter of the groups surveyed worry their investment committees lack the resources required to perform due diligence related to investment officers, and almost all say inflation is a top concern.

While almost nine in 10 organizations hold investments in alternative vehicles, four in 10 report 20 percent or more of their portfolios are in alternatives, and almost a quarter plan to increase their holdings in alternatives over the next six months.

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