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Creating maximum impact and long-term sustainability for not-for-profits
Now more than ever we need a Not-For Profit (NFP) sector that is compassionate and effective, innovative and strong. The range of people and communities in need is only getting larger and the responsibility – and opportunity – for NFP's to make a difference is growing just as fast.
To make that difference – to really deliver for the communities they serve – NFP's need the strong underpinnings that top-quality financial governance provides.
An NFP investment strategy (including an NFP Investment Policy Statement) that’s tailored to the mission and the organisation. One that is part of an integrated strategy that takes account of an NFP’s Spending Policy and delivers long-term sustainability as well as short-term program needs;
Financial structures and strategies that help the organisation manage their financial challenges – rising demand, variable funding, market volatility and regulatory change;
An integrated approach to NFP financial governance that helps NFP executives, boards and CFOs meet all their compliance and regulatory obligations and by doing so meet the needs and expectations of stakeholders including donors, partners and government. With that high level of NFP financial governance in place, NFP leaders are freed to focus on managing their organisation, delivering on their mission and growing their capability.
At Perpetual, we have a team of experts across philanthropy, governance and investment that work together to help NFPs meet all their investment strategy, sustainability and governance needs.
We believe NFPs are a great engine for good. We’re here to help the leaders who drive them forward.
Not-for-profits can apply for funding from the philanthropic trusts and endowments that Perpetual manages, through our IMPACT Philanthropy Application Program (IPAP).
Philanthropy insights report: A decade of philanthropy
This latest Perpetual philanthropy insights report shares a decade’s worth of data from the Perpetual IMPACT Philanthropy Application Program, offering unique insights into both the philanthropic and charity sectors, and valuable information and analysis to support strategic planning and decision making.
IMPACT provides insight into important issues for philanthropists and the not-for-profit sector. It shares thought provoking ideas and best practice examples that aim to both stimulate and motivate a passion for philanthropy with Impact.
Perpetual has been supporting NFPs for decades – by expertly investing charitable reserves to fund their work, building governance skillsets and by working with NFP leadership to create capabilities that serves all stakeholders – clients, donors and partners. Fordham, a specialist accounting firm that’s part of the Perpetual Group also provides a wide range of accounting and business services to NFPs – ranging from payroll to budgets and cashflow management, tax and financial statement administration and ACNC lodgments.
For many NFPs, successful management of their capital – and the cashflows they generate from fundraising – are crucial to sustainable success.
Investment Policy Statements
An Investment Policy Statement defines how an NFPs investment portfolio is to be managed and how investment decisions will be made. It is a crucial element of sound financial governance. Perpetual’s Investment Policy Statement service helps NFPs develop a prudent, ‘best practice’ Investment Policy.
Spending Policy
Linking a well thought-through Spending Policy to the overarching Investment Policy will further enhance financial governance. A Spending Policy sets out how distributions from your long term investment portfolio are paid into your operating revenue. It helps balance the NFPs short-term operational needs with the long-term sustainability of that investment portfolio. Perpetual’s Spending Policy workshop helps NFPs decide what approach is best for their organisation.
Strategic investing
There is no one-size fits all investment strategy that will work for all NFPs. The nature of the mission, cashflows, size, liquidity needs, stakeholder relationships and, crucially, board expectations and experience will all be important influences on the strategies NFPs adopt to manage their funds. At Perpetual we work with NFPs to develop, implement and optimise investment strategies that address all these issues.
Risk management
As with all investors, NFPs need to understand and manage investment risk. Act too boldly and your organisation’s activities could be affected. Invest too conservatively and you reduce your ability to fund future activities by allowing the real value of your capital to fall. Our “protect and grow” philosophy balances risk and return and is executed using sophisticated investment strategies that are tailored to NFP’s needs.
Strategic asset allocation
Having the right mix of assets is not simply a question of investment methodology. When we build portfolios for our NFP clients we take into consideration issues like cashflows, time horizons, risk profiles and more. For some clients, asset allocation decisions will be all about generating income to fund regular activities. For others it will be about maximising long-term growth. We have worked with many NFPs over the years where these questions involved a change of strategy. These strategic shifts can be as different as the organisations that need them. For example:
Reporting
We recognise that in a very real sense, NFPs are often managing other people’s money – whether it’s donors, governments or communities. That makes accountability, communication and reporting vital. Perpetual advisers work closely with our investment team and with NFP boards and leaders to tailor regular investment reporting and board presentations so NFP leaders always understand what’s happening with the funds they’re accountable for.
Investment experience
Investing for NFPs is a specialist skill and Perpetual offers NFP clients the benefit of extensive experience and real scale. Perpetual is one of Australia’s largest managers of philanthropic funds, with $2.9 billion in funds under advice for charitable trusts and endowment funds as at the end of FY20.
Perpetual’s investment philosophy is built around quality, value and risk management. We take a long-term approach to investing and believe high quality investments perform over time.
We enact this investment philosophy by diversifying across asset classes, industry sectors and individual investments and ensuring the assets in portfolios meet our stringent quality investment criteria.
Perpetual works closely with NFPs and other philanthropy sector stakeholders to build capacity across the sector through thought leadership, network building, education and practical assistance. Here are just some of the capacity building activities Perpetual invests in.
Stanford PACS
Perpetual has an ongoing partnership with Stanford University’s Center on Philanthropy and Civil Society (Stanford PACS). That partnership brings top-quality thinking from PACS leaders such as Lucy Bernholz, Rob Reich, Paul Brest and others to Australia to talk on issues as varied as philanthropy in the digital age, more effective giving, philanthropy and civil society and more. Perpetual has also sponsored educational visits to Stanford for a wide range of NFP and philanthropy leaders across Australia.
CFO series
In any NFP it is the CFOs, finance teams, investment committees and boards who drive the organisation’s financial governance and long-term sustainability. To help these leaders Perpetual’s NFP investment experts offer them access to white papers, financial tools and resources and opportunities to network with peers.
Data for decision making
Perpetual is committed to providing tools and resources to support our not-for-profit clients. Through our partnership with Seer Data & Analytics, we provide clients with exclusive access to our IMPACT Philanthropy Application Program (IPAP) data, to help them make data driven decisions. Perpetual’s NFP clients can access client tools and resources here.
Strategic grantmaking can be a complex and time-consuming process. Perpetual’s grantmaking consulting service gives not-for-profit organisations the opportunity to leverage our skills, experience and best practice processes. Utilising our IMPACT Philanthropy Application Program, or designing a bespoke end-to-end grant making strategy, we can help your organisation get the best outcomes from your grantmaking while reducing costs in time, worry and workload.
“Since enlisting Perpetual to manage our grant rounds, FightMND has been able to extend our reach to a greater range of organisations who support people living with MND in different ways, whilst still supporting our longer-term partners in the sector. This has laid the foundations for greater collaboration across the MND community so that together we can improve the lives of people with MND in Australia.”
Dr Fiona McIntosh – CEO, FightMND
In this video Marielle Letour, Chair of Autism Spectrum Australia’s (Aspect) Finance, Audit and Risk Committee, discusses the need to understand the ESG alignment of Aspect’s portfolio with their core purpose and values, the conversations it sparked at a board level, and the most useful and surprising elements of the process they went through.
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“We are strategic partners to a wide range of not for profits and community organisations. With a team of specialists across philanthropy, governance and investment management we help them deliver for their clients and communities in a constantly changing environment.” Jamie Cockerill, Partner, Perpetual Private, NSW. |
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“Perpetual is working alongside NFPs and philanthropists all the time. That connection, that knowledge, means I can make a real difference whether I’m helping a client with their philanthropy – or helping an NFP with their investments or funding.” Liz Wheatley, Associate Partner, Perpetual Private, NSW. |
Cat Fay is a senior social investment and business leader in Australia. She has more than twenty years’ experience advising families, individuals and institutions on philanthropic and social investment strategies.
Jamie has over 20 years’ experience providing sophisticated investment advice to high net worth families and Not-For-Profit organisations.
Daniel is the Partner of VIC’s Not For Profit and Medical division.
Andrew is the Partner of SA’s Not For Profit division.
Perpetual provides a wide range of services to the NFP sector. That service is delivered by a team of experts in everything from investment and governance to philanthropy and finance. We seek to partner with NFPs in the areas where we can bring our unique capability to bear, helping them service their communities, fund their operations and increase their impact.
Perpetual works with NFPs and charities across a wide range of fields in Australia and overseas – education, social welfare, advocacy, aged care, medical research and the arts – to name a few. Our services range from NFP governance – investment and spending policies, investment strategy – to all aspects of the specialist investment management of NFP capital.
Perpetual also works with donors every day to help them generate greater impact from their giving. So, we’re a natural connecting point between philanthropists, funders and NFPs. Just as importantly, we’re constantly engaging with NFPs, philanthropists, business, government and the education sector to help increase the impact NFPs can have – through thought leadership, network building, a focus on capability and involvement in public policy processes.
Perpetual is an ASX-listed, diversified financial services company which has been serving Australians since 1886 when it was established as a trustee company a group of businessmen including Sir Edmund Barton, later to be Australia’s first Prime Minister. That trustee heritage – and the culture it created around putting clients first – is what makes Perpetual unique.
Perpetual’s Philanthropic Services are provided by Perpetual Trustee Company Limited (PTCo), ABN 42 000 001 007, AFSL 236643. This webpage has been prepared by PTCo and may contain information contributed by third parties. It contains general information only and is not intended to provide you with advice or take into account your personal objectives, financial situation or needs. The information is believed to be accurate at the time of compilation and is provided by PTCo in good faith. You should consider whether the information is suitable for your circumstances and we recommend that you seek professional advice. To the extent permitted by law, no liability is accepted for any loss or damage as a result of any reliance on this information. PTCo does not warrant the accuracy or completeness of any wording in this document which was contributed by a third party. View the Perpetual Group's Financial Services Guide.
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This information and the terms of use are subject to change at any time without notice. The contents of this website are intended for residents and citizens of the United Kingdom, and the European Union, and should not be relied on by residents or citizens of other jurisdictions. All investment products and services referenced in this website are managed and offered by either JOHCM or its affiliates within the Perpetual Limited group of companies ("Perpetual Affiliates"). By clicking the “Proceed” button below, you are agreeing to the Terms & Conditions of use.
