Endowments & Institutions

 | wealth management

A small Vermont museum received a major bequest of $20 million. With the gift, the museum could finally create a meaningful endowment. The museum trustees decided to split the gift between capital improvements and creating a $10 million endowment. They solicited proposals to manage the endowment and Boston Financial Management was selected to manage the assets.

How Boston Financial Management Helped:

The BFM team met with a newly formed Investment Committee to understand the museum’s financial needs and their view of the investments. We offered to help them to develop institutional guidelines for the investments and educated them on typical asset allocations and investment policies employed by similar non-profit organizations.

Over the first year of managing the museum’s endowment we provided the following services:

  • BFM advised on the creation of an Investment Policy and Spending Policy to provide a perpetual institutional structure for how the museum endowment is invested and funds are spent.
  • We built a prudent diversified investment portfolio with a focus on balancing the museum’s financial needs with appropriate investment risk. We also accommodated the museum’s desire to avoid specific types of investments that potentially violate the museum’s sustainability mission.
  • Client meetings were held with the Investment Committee in the Vermont museum every six months, and annually we reported to the full Board of Trustees. Each quarter we provided a detailed investment summary and performance review.
  • BFM also provided a valuable trustee charitable-giving seminar focused on techniques to optimize tax deductions with charitable giving. We were also asked to share the seminar with the museum’s donor base.

With the endowment fully invested and producing expected returns, the museum is able to expand its mission and fund a stronger education program.

Names and identifying details in this client story have been changed to protect client confidentiality. This client story does not contain any legal or tax advice. You should always consult with your attorney, accountant or other professional advisors before changing or implementing any tax, investment or estate planning strategy.

IRS Circular 230 Disclosure: Pursuant to IRS Regulations, we inform you that any tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding tax related penalties or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.