ClimateSmart Endowment: Manage your nonprofit's nest egg in the age of climate change.
Looking for a new manager?
Whether you're starting a new endowment or looking for a partner that shares an outlook more similar to yours, we're here.
FAQ
Frequently asked questions
At what stage should a nonprofit start thinking about an endowment?
Once you regularly have >12 months of expenses in additional savings, it can start to make sense to do more long term planning.
After 12 months, it can make sense to either move into more illiquid securities like CDs or a bond ladder or even take on more risk for more return with a small equity investment.
The other scenario is if the organization knows it is going to receive a large gift that it does not have immediate use for. This can be used to seed an endowment that can serve the organization for a rainy day and/or provide regular income from investments to support operations.
How much should be in stocks vs bonds?
The first question you should answer when thinking about investing is: "When will I need the money?" If the answer is in 12 months, then the resulting portfolio will likely be far more conservative. If in 10 years, or indefinitely, then taking on more risk can make sense because you are less likely to be forced to sell "at the bottom."
There are traditional endowment models like 60% stocks, 40% bonds, but the right balance for your organization will come down to the goals for the endowment itself.
Why is each endowment plan unique?
The needs of each organization is unique.
Some use endowments purely for a rainy day fund, that in an ideal world they never have to touch.
Others plan to drawdown for a specific project.
Others plan to build it to a sufficient size to then use the annual income to supplement funding for operations.
This is why we always start any endowment conversation with a deep look at goals. Because a mismatch between an endowment's real goals and its resulting portfolio can have major consequences.
Will ClimateSmart outperform traditional endowment portfolios?
It might.
If some of the scenarios we believe about the future come true, like demand for fossil fuels entering a protracted decline, then a ClimateSmart would likely outperform a traditional one.
But nobody can predict the future. Past results are no guarantee of future returns. ClimateSmart is right for you and your organization if you agree with our core beliefs about the future.
Can we build custom bond portfolios?
Yes, we our proud to have partnered with Artesian Investing, a firm that specializes in green bonds, to both manage our short duration bond ETF and also build customized bond portfolios for certain clients.
Given the level of ongoing customization involved, the minimum account size for such portfolios is larger and the fees are higher, but there are multiple situations where a custom bond portfolio can make sense.
Our difference
01.
We're clear eyed.
We think financial security and climate health are directly linked.
02.
We're independent.
We're not owned by a big bank or Wall Street firm.
03.
We're real people.
You'll feel it the moment you meet us.