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Charitable Sustainable Portfolio Management

In terms of working to protect and maintain the Earth’s environment, everyone is responsible for its ongoing plight and current protection. However, change will not occur through one great leap, but through a series of small steps in the right direction. Charities, such as those whose objects don’t explicitly include environmental protection or improvement steps are becoming more aware of their role in preventing further environmental and social damages. In this article, we’ll discuss some considerations and steps for more sustainable portfolio management for charities and charitable investment funds.

What Is Sustainable Portfolio Management?

Sustainable portfolio management is the mechanism used to classify and evaluate products in certain market segments for sustainability and performance. The objectives are to maintain sustainability, manage innovation, minimize risks, and maximize opportunities for portfolios and products. Many companies seeking to increase sustainable portfolio management contribute to the customer focus of products that combine sustainability and performance by supporting the sustainability efforts of customers and business partners. Some top focuses of such companies are innovation, performance, and sustainability. 

Regular portfolio management includes monitoring and developing investment strategies for clients considering their bonds, real estate, stocks, and collectibles. Sustainable management involves directing those resources toward supporting or investing in assets and companies that create positive world changes. You can build sustainable management using negative or positive screening. Negative screening involves refusing to invest in institutions or companies for their unsustainable practices or industry. Positive screening involves pursuing investments in trusts, charities, and endowments that promote diversity, sustainability, and equity. 

Managing Charity Investments

charity investment

For regular portfolio management, you should review your investments regularly to make the most out of your charity’s funds. By consistently reviewing investment performance, you also ensure they uphold your organization’s charitable goals. You also want to decide internally who will review, and how frequently they’ll review the investments. Be sure to look over your portfolio if your charity’s financial situation changes, if you have concerns about your fund managers or your portfolio, or if the economic outlook changes. Reviewing internal processes can also keep them relevant and updated.

Different investments work for various investors, so creating a plan that continues to benefit your organization is vital. Effective management of your investments begins with a good understanding of the available options and clear objectives to help you meet goals. Some important factors when planning your charitable investments include the length of your investment, access to your money, your appetite for risk, the available investment income, the options for diversification, how actively you want to manage your investments, how your investments performed previously, and if you have any ethical concerns.

Sustainable Charity Portfolio Management

Impact investing involves the concept that a person can do well financially while also doing good in the world with their investment choices. Investors may support important causes through their investments while pursuing positive financial returns for their efforts. Impact investing is a broad concept that can refer to anything from investing in organizations with a straightforward social mission to avoiding investments in companies with practices that can negatively impact the world. Once an approach used primarily by socially-driven foundations and those with a very high net worth, many investors are now considering impact investing.

As universal benefits such as workplace equality and clean water availability garner attention, impact investing continues to expand. Some significant benefits of using your charitable investment funds for more sustainability include competitive returns, stabilization, and diversification of broad asset allocations, and alignment of personal values with your investments. As more investors continue putting their charitable funds to work for positive social changes, there are more options than ever for sustainable investments and more sustainable portfolio management for your charity. You can invest for financial and social benefits.

What Is a Charitable Investment Fund?

investment fund

A charitable investment fund is essentially an investment account with the primary purpose of supporting desired charitable organizations. When you contribute securities, cash, or other assets to this type of fund at a public charity, you can be eligible for an immediate tax deduction.  You may then be able to invest those funds for tax-free growth. The goal of your charitable donations is for them to be the most effective in achieving your social and environmental goals. Charitable investment funds are among the fastest growing methods of charitable giving in the US as they are one of the most tax-advantageous and easiest methods.

You begin a charitable investment fund by making a tax-deductible donation to an advised fund by donating stocks, non-publicly traded assets, or cash. You then grow your tax-free donation. When deciding which charities to support, a donation can grow, making more money available for charitable donations. The majority of sponsoring organizations have a range of investment options to find a suitable investment strategy for charitable dollars. Over time you can support a large number of IRS-qualified public charities with recommendations from the charitable investment fund. The charity sponsoring your account can also ensure charitable uses.

How Do You Give Well and Sustainably?

With an increasing number of nonprofit organizations in the US, and limited funds to address society’s various needs, competition for charitable donations can be daunting. When you are deciding which organizations to give to, there are a few tips for giving well to guide you. You should first know the organization, including its latest annual report, a list of board directors, the most recent audited statements, and their mission statement. 

Ask how much money goes to fundraising expenses and general administration and how much remains for program services you desire to support. You can also give well by giving directly instead of through a third party. Do not respond to pressure to contribute on the spot without further research. Keep close records and continually review your donations.

Sustainable Portfolio Management for Your Charity

When considering more sustainable portfolio management for your charity, consider these top tips from Egéa Sri. For more clarity and help giving well, contact Egéa Sri today.


Socially Responsible Investing (SRI) / Environmental Social Governance (ESG) investing has certain risks based on the fact that the criteria excludes securities of certain issuers for non-financial reasons and, therefore, investors may forgo some market opportunities and the universe of investments available will be smaller.

This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice.  If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational material.

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