Financial Management for Nonprofit Organizations, 3rd Edition

APPENDIX 12ASAMPLE OF SHORT-TERM INVESTMENT POLICY AND GUIDELINES

This example may be best suited for a large organization and may be compared with and used for the development of your investment policy and guidelines.

INVESTMENT COMMITTEE

Within the spectrum of activities of this organization, it is necessary to provide a framework for the regular and continuous management of investment funds. Because there is currently no formal Investment Committee, the Directors will assume this responsibility.

INVESTMENT POLICY

The policy shall be to invest excess cash in short-term and floating-rate intermediate-term fixed-income instruments, earning a market rate of interest without assuming undue risk to principal. The primary objectives of such investments in order of importance shall be preservation of capital, maintenance of liquidity, and yield.

INVESTMENT RESPONSIBILITY

Investments are the responsibility of the Vice President of Finance. This responsibility includes the authority to select an investment advisor, open three accounts with brokers, establish safekeeping accounts or other arrangements for the custody of securities, and execute such documents as necessary.

Those authorized to execute transactions include: (1) Vice President of Finance, (2) Director of Accounting, and (3) Cash Manager. The Vice President of Finance shall ensure that one qualified individual is always available to execute the organization's investments.

REPORTING

The Treasurer shall be responsible ...