The CFA Institute has released guidance on the management of the financial resources of philanthropic organizations.  Specifically, the CFA Institute developed the Investment Management Code of Conduct for Endowments, Foundations, and Charitable Organizations to specifically address the management of what are typically longer-term or permanent financial assets of these organizations.  Board members and officers should be aware of the principles articulated in the Code of Conduct to successfully manage the investment of these types of assets and to ultimately protect the organization’s investments.

The CFA Institute intends for the Code of Conduct to be a "Best Practices" guide for those in the organization responsible for managing the organization’s financial assets.  The Code of Conduct also contains ethical principles, along with general policies and procedures related to the management of financial resources.

The Code of Conduct has five general principles:

  • Act with loyalty and proper purpose
  • Act with skill, competence, prudence, and reasonable care
  • Abide by all laws, rules, regulations, and founding documents
  • Show respect for all stakeholders (this includes the general public)
  • Review investment strategy and practices regularly

Organizations that would like to implement the principles from the Code of Conduct must adopt detailed policies and procedures that reflect and address the five general principles above.  The Code of Conduct contains illustrations and examples of some of these policies and procedures.  The illustrations and examples are not exhaustive, however, and the actual policies and procedures for each organization will depend on the particular circumstances, along with the regulatory and legal landscape, of each organization.

The Code of Conduct and a detailed description of the general principles stated above can be found here.

For more information and background about investment management rules affecting not-for-profit organizations in New York, please see our October 7, 2010 blog entry. 

 

Posted in Endowments
Tags: ethics, investment, UPMIFA
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Photo of A. Nicole Campbell A. Nicole Campbell

A. Nicole Campbell is Associate General Counsel at the Open Society Institute (“OSI”), a private operating and grantmaking foundation in New York City. As Associate General Counsel, Nic works on a wide range of exempt organization matters at the foundation, including tax compliance…

A. Nicole Campbell is Associate General Counsel at the Open Society Institute (“OSI”), a private operating and grantmaking foundation in New York City. As Associate General Counsel, Nic works on a wide range of exempt organization matters at the foundation, including tax compliance and grantmaking, as well as other corporate, compliance, and governance matters. Prior to joining OSI, Nic was an associate in Proskauer’s Tax Department and a member of its Not-for-Profit/Exempt Organizations Practice Group where she advised not-for-profit clients on a variety of matters, including applying for and maintaining exemption from federal income tax, structuring joint ventures and partnerships with taxable entities, and excise tax issues. In 2009, while at Proskauer, Nic went on leave to The New York Community Trust as its Associate General Counsel and was responsible for handling a range of legal matters, including charitable contributions, donor-advised funds, and corporate and governance issues. From 2007 to 2009, she was recognized by the New York State Bar Association for her pro bono service, earning her the title of “Empire State Counsel.” In 2008 and 2009, she was honored by The Legal Aid Society as one of the recipients of the Society’s Pro Bono Publico Awards for outstanding service to the Society and its clients. She is also a past recipient of the Proskauer Rose Golden Gavel Award for her commitment to pro bono service.
Nic is an Editor of and contributor to the Not-For-Profit/Exempt Organizations Blog and she has also been a presenter at Proskauer’s annual “Trick or Treat Seminar,” where she discusses recent developments affecting tax-exempt entities.
At Northeastern University School of Law, Nic was a Teaching Assistant for the Legal Practice Writing Program and a Teaching Facilitator for the Law Skills in Social Context Program.
As an Educational Counselor for Massachusetts Institute of Technology, Nic interviews high school students who are interested in attending. Nic is also a member of the Board of Directors of Ardea Arts, Inc., a not-for-profit organization dedicated to developing and producing new American opera and music theater works for multi-generational audiences. Nic is also founding Director of Access Caribbean Assistance Fund, a not-for-profit organization that provides health and education assistance to needy individuals in the Caribbean.

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