You are the financial manager of a midsize nonprofit that has just received an endowment of a
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Question:
You are the financial manager of a midsize nonprofit that has just received an
endowment of a substantial amount from a longtime supporter. The board
members are excited because years of effort have gone into seeking this
endowment, and they are expecting that the endowment will mean increased
financial stability for the nonprofit in the future. The board members havebeen distressed by money shortages in recent years caused by donor
fatigue and the economic downturn. They do not, however, know how an
endowment should be managed. A couple of members have knowledge of
accounting and auditing, but no one on the board is an investment expert,
and the nonprofit has no experience in endowment investment, given that
this is the first endowment the nonprofit has received.
You, as the financial manager of the nonprofit, have been asked to take on
the responsibility of establishing and managing the endowment a situation
not uncommon in small and midsize nonprofits You are very happy with the
infusion of capital as an endowment, but you take on the role of managing
the endowment with some trepidation, knowing how unprepared the
nonprofit is for this new financial management task. You want to perform
well with the endowment for the mission of the nonprofit, but you do not
want to take the blame if the endowment does not achieve excellence,
despite your best efforts, because of uncontrollable events such as swings
in the market and economic fluctuations. What should you take into
consideration and what steps should you undertake if you intend to take on
responsibility for the endowment in addition to your other duties?
Related Book For
Accounting for Governmental and Nonprofit Entities
ISBN: ?978-0073379609
15th Edition
Authors: Earl R. Wilson, Jacqueline L Reck, Susan C Kattelus
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