Managing Charitable Dollars

Managing Charitable Dollars & Making the Most of Them

When it comes to managing money – investing it and spending it — nonprofit leaders may have questions about everything from basic legal responsibilities to how their organization’s charitable dollars can best support the impact they are seeking to have. In this guide, we answer those questions. And, we walk you through how to manage your organization’s funds responsibly to make the most of your charitable dollars and further your mission.

We start with the basics (and beyond), in Topic #1 on Money Management Rules. From there, if you want information on creating a Board-designated endowment or a permanently restricted endowment, you can jump to Topic #2 on Endowments and Reserve Funds.

If you already have an established endowment and are looking for inspiration on how to do more to advance your organization’s charitable mission through socially responsible and mission-aligned investment strategies, skip to Topic #3 Thinking Differently for background information.  Topic #4 Activity Suggestions has ideas for impact investing activities, including program-related and mission-related investments (PRIs and MRIs).

If you are looking for more detailed information, we also provide the legal authority governing charitable investing and spending (Topic #5 Knowing the Law) and practical steps to start and manage an endowment, including adopting an investment policy statement (Topic #6 Defining Your Values and Topic #7 Managing and Spending Endowments).

Finally, in Topic #8 we give you a handy list of all resources available for download. And, we share a hypothetical example of a nonprofit’s activities managing its assets to tie together many of the tools and topics discussed in this guide.

This guide applies to all charitable 501(c)(3) organizations—regardless of whether they are trusts or nonprofit corporations, and whether they are public charities or private foundations — so for simplicity, we refer to them as “nonprofits” and “organizations.” And we refer to trustees and directors as “Board members.” When there are specific rules that some organizations, like private foundations, must watch out for, we highlight them.

Finally, while this guide covers a lot of approaches for managing funds to make an impact, it does not provide a roadmap for organizations looking to launch their own new ventures. Launching new ventures can be an important way for nonprofits to achieve impact, but because there is a wide range of legal and other issues that should be considered before launching a new venture, we felt that topic would be better addressed in a separate how-to guide.

Remember – the information in this how-to guide is general in nature and for educational purposes only, and the documents are just samples. For more about how to use these resources, see our About Us page. This website does not provide legal, accounting, investment, financial, or any other advice. If your organization has funds to invest or wants to maximize its charitable investments, you should consult with and engage professionals – lawyers, accountants, and investment and financial advisors – who specialize in and understand the unique needs and rules that apply to nonprofits.