Community
foundations-the charity vehicle of choice for many philanthropic
investors-are having a tough time dealing with competition and an
increasingly complex investment environment, according to a recent poll.
The poll, sponsored by SEI, found that community
foundations view their biggest challenges to be competition for
donations (46%), low overall brand awareness (46%), overworked staffs
(42%) and rising health-care and insurance costs (35%).
Respondents also said investment committees are
spending an increasing percentage of their time researching complex
investment products and making manager selection and asset allocation
decisions.
"This poll supports a trend where many community
foundations are reevaluating the traditional roles of their internal
staffs and investment committees, as well as their external services
providers," says Carolyn McLaurin, vice president and managing director
of SEI's nonprofit group. SEI is a provider of outsourced asset
management, investment processing and investment operations solutions.
Illustrating the operational crunch community foundations are facing,
69% of foundations surveyed said their internal staffs are spending
more time on marketing and servicing current donors, and 30% said a
lack of time and resources is impacting their ability to increase
returns.
Many are dealing with the problem through third
parties. Slightly more than half of respondents said they use an
investment consultant, and 42% said they use a third party to select
asset managers.
"In a much more difficult environment for
nonprofits, many community foundations are moving towards new
approaches that reallocate responsibilities and enable each role to
maximize its core competency," McLaurin says.