Selecting an Investment Advisor for Your Minnesota Nonprofit: 10 Questions to Ask

Choosing an investment advisor for your nonprofit is about more than investment performance.

The right advisor should help your board make informed decisions, strengthen governance, and ensure your assets are supporting your mission both today and for years to come.

Whether you're hiring a new advisor, reviewing an existing relationship, or responding to an RFP, here are ten questions every Minnesota nonprofit should ask.

1. How Much Experience Do You Have Working With Nonprofits?

Managing nonprofit assets is different from managing individual wealth.

Ask:

• What percentage of your clients are nonprofits?
• What asset sizes do you typically serve?
• Do you work with endowments, foundations, and operating reserves?

An advisor who understands nonprofit governance can often provide more value than one who only focuses on investment returns.

2. Are You a Fiduciary?

A fiduciary is required to act in the client's best interest.

While that sounds obvious, it's worth asking directly.

You should understand:

• How the advisor is compensated
• Whether conflicts of interest exist
• Whether recommendations are made in your organization's best interest

Transparency matters.

3. Who Will Actually Service Our Account?

Many nonprofits meet a senior professional during the sales process and rarely see them again.

Ask:

• Who attends meetings?
• Who prepares reports?
• Who answers questions between meetings?

The relationship you'll have after signing the agreement matters more than the relationship during the proposal process.

4. How Do You Help Boards Fulfill Their Fiduciary Responsibilities?

A strong advisor should help educate and support the board.

Look for someone who can assist with:

• Investment committee education
• Governance best practices
• Investment Policy Statements
• Spending policies
• Board reporting

Your advisor should make the board's job easier, not more complicated.

5. What Is Your Investment Philosophy?

There is no single correct investment philosophy.

However, there should be a philosophy.

Ask advisors to explain:

• How portfolios are constructed
• How risk is managed
• How investment decisions are made
• How portfolios are monitored over time

If the explanation is difficult to understand, that's valuable information.

6. How Will You Measure Success?

If the answer is simply "performance," keep asking questions.

Success for a nonprofit may include:

• Supporting annual spending needs
• Preserving purchasing power
• Managing risk appropriately
• Improving governance
• Supporting long-term sustainability

Returns are important, but they are not the entire story.

7. What Are We Paying?

Ask for a clear explanation of all fees, including:

• Advisory fees
• Investment expenses
• Custodian fees
• Additional consulting costs

The best advisors are comfortable discussing fees openly.

8. How Often Will We Meet?

Communication expectations should be established upfront.

Ask:

• How often do you attend board or committee meetings?
• How quickly do you respond to questions?
• How often do you proactively reach out?

Many nonprofits discover that service levels vary dramatically from one advisor to another.

9. Can You Provide References From Similar Organizations?

Ask for references from nonprofits that resemble yours in:

• Asset size
• Mission
• Governance structure

The goal isn't to find a perfect match. It's to understand what the experience is like after the relationship begins.

10. What Ideas Would You Have for Our Organization?

This may be the most important question of all.

A thoughtful advisor should be able to identify opportunities to improve:

• Governance
• Spending policies
• Cash management
• Portfolio structure
• Investment oversight

You are not simply hiring someone to manage investments.

You are hiring someone to help steward resources that support your mission.

Final Thoughts

The best nonprofit investment advisors don't just report performance.

They educate boards. They strengthen governance. They ask thoughtful questions. They bring proactive ideas. And they help organizations align financial resources with long-term mission impact.

For many Minnesota nonprofits, especially those with assets between $5 million and $25 million, the right advisor can become a valuable strategic partner — not just an investment manager.