7 Questions Every Minnesota Nonprofit Board Should Ask About Its Investment Portfolio

June 11, 2026 · 6 min read

Most nonprofit board members aren't investment professionals — and they shouldn't have to be.

But they do have a fiduciary responsibility to oversee the organization's financial resources wisely. Whether your nonprofit has $500,000 or $25 million in reserves, endowment assets, or operating funds, asking the right questions can help ensure your portfolio supports the mission for years to come.

Here are seven questions every Minnesota nonprofit board should be asking.

1. What Is This Money Actually For?

Before discussing performance or investments, start with purpose.

Is this money intended for:

Next year's operations?
Emergency reserves?
A future building project?
Long-term sustainability?
An endowment?

Different goals require different investment strategies.

One of the most common mistakes we see is treating all assets the same, regardless of when they'll be needed.

2. Are We Taking the Right Amount of Risk?

Many nonprofits are either too conservative or too aggressive.

A portfolio invested entirely in cash may struggle to keep pace with inflation. On the other hand, an overly aggressive portfolio may create unnecessary volatility if funds are needed soon.

The right question isn't, "How much risk can we tolerate?"

It's, "How much risk is appropriate given our mission, spending needs, and time horizon?"

3. Do We Have an Investment Policy Statement?

Every nonprofit with invested assets should have an Investment Policy Statement (IPS).

An IPS serves as a roadmap for:

Investment objectives
Asset allocation targets
Spending guidelines
Rebalancing procedures
Fiduciary responsibilities

If your board doesn't know where the IPS is — or whether one exists — that's worth addressing.

4. Are We Earning a Reasonable Return for the Risk We're Taking?

Performance should never be evaluated in a vacuum.

Instead of asking whether returns were "good" or "bad," ask:

How did we perform relative to our benchmark?
How did similar portfolios perform?
Were we compensated appropriately for the level of risk taken?

A disciplined process is often more important than short-term performance.

5. How Much Are We Paying in Fees?

Investment fees matter because every dollar spent on fees is a dollar unavailable for mission impact.

Boards should understand:

Investment management fees
Custodial fees
Fund expenses
Consulting fees

Transparency is key.

If the fee structure is difficult to explain, it may be worth asking additional questions.

6. Is Our Portfolio Supporting Today's Mission and Tomorrow's Mission?

One of the hardest challenges for nonprofit leaders is balancing current needs with future sustainability.

Spending too little can limit today's impact.

Spending too much can reduce future impact.

A thoughtful investment strategy helps boards strike that balance and make decisions with greater confidence.

7. Are We Getting the Advice and Service We Need?

Many mid-sized Minnesota nonprofits feel overlooked by large financial institutions.

Ask yourself:

Does our advisor proactively educate the board?
Do they attend investment committee meetings?
Are they helping us improve governance?
Do they understand nonprofit-specific challenges?
Do they make recommendations, or simply report performance?

Your advisor should be more than a quarterly statement review.

They should be a strategic partner helping the organization steward its resources responsibly.

Final Thoughts

The goal of nonprofit investing isn't to beat the market.

The goal is to support the mission.

When boards regularly ask these seven questions, they create stronger governance, make better decisions, and help ensure the organization's resources continue serving the community for generations to come.

For many Minnesota nonprofits, a simple portfolio review can uncover opportunities to improve governance, reduce fees, strengthen investment policies, and better align financial resources with mission impact.