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How to Draft Your School's Investment Policy
One of our ISCA members posted this week to our Online Forum inquiring about writing a good investment policy. I thought I would use this week's Chair Post to share a couple resources that might be helpful for that purpose.
The first resource is one I shared last year "Non-Profits: 13 Elements to Writing a Great Investment Policy Statement" by Russell Investments. Another resource which is less technical and more straightforward is by the CommonFund Institute and they outline 10 critical issues to include in your policy.
- Purpose of the investment pool
- Duration of the investment pool
- Responsibility of investment decisions
- Delegation to a committee, consultant or a manager
- Target return and endowment dependence
- Investment strategy
- Risks
- Liquidity
- Spending
- The Fund's role in supporting the balance sheet
The Article offers a brief overview of each component while the accompanying White Paper provides more detailed guidance for drafting each section. Perhaps most helpful from CommonFund Institute are the two sample template investment policies they provide. Click on the link below to see those. Hopefully, all these resources can be beneficial whether you are developing an investment policy for the first time or reviewing an existing one.
Sample investment policy statement templates
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