If you sit on a nonprofit board or finance committee, you've probably heard the word "fiduciary" used to describe an advisor. What often gets missed is that your board already carries fiduciary responsibility, with or without an advisor in the picture.

This distinction matters more in the nonprofit space than almost anywhere else in personal or institutional finance because the money your board oversees isn't personal wealth. It's donor-restricted, mission-restricted, and entrusted to your organization by people who expect it to be stewarded responsibly. That raises the stakes on transparency, prudence, and oversight in a way that a typical investment conversation often doesn't capture.

There’s a myth in the nonprofit world: parking cash in a savings account is the “safe” choice. In reality, it can be one of the costliest decisions a board makes, and often the one no one thinks to question.

That doesn’t mean the market is always “safe” either. Investing always carries risk, including the risk of loss. But holding everything in cash carries a cost too, even if it never shows up on a statement. The question your board actually needs to answer isn’t which option is risk-free, because neither one is. It’s whether your decisions are intentional, and tied to what each dollar is actually meant to do.

A good investment policy statement(IPS) should make investment decisions easier, not harder. It should give your board clarity, protect your organization, and hold up under scrutiny.

Most nonprofits have an IPS. Not all of them have one that's actually doing its job. In our work with nonprofit organizations, we see the same problems come up again and again: documents that are outdated, too vague to be useful, or simply disconnected from how the organization actually operates.

None of these are catastrophic on their own, but they add up. And when a difficult market or a board transition arrives, a weak IPS is the wrong time to find out.

Here are the most common mistakes we see, and what to do about them.