The OCIO Advantage for Human Services

Human services organizations play a critical role in supporting and advocating for vulnerable individuals and communities, but securing reliable funding can be a perennial issue. Partnering with an Outsourced Chief Investment Officer (OCIO) can help your organization build an investment portfolio that helps sustain your mission over the long term.

Defocused shot of businesspeople shaking hands during a meeting in an office

How an OCIO Can Make an Impact

Uncertainty about federal funding, changes in individual giving habits, and time-bound support from foundations have underscored the importance for human services organizations to create adaptable, long-term investment strategies. This is where an OCIO can make an immediate impact, leveraging its investment expertise to provide strategic guidance tailored to an organization’s unique situation and goals.

Investment Management Expertise

Working with an organization’s board, finance committee, investment committee, and staff, an OCIO can simplify decision-making and develop a cohesive, forward-looking investment strategy. Though they can have a broad range of involvement in everyday activities, OCIOs generally support organizations by:

Preparing detailed portfolio spending models and scenario-planning tools.
Managing a portfolio around debt covenants (liquidity ratios, interest coverage ratios, etc.) to minimize income statement impact.
Aligning investment strategies, funding streams, and spending policies with current conditions and
strategic objectives.
Evaluating risk-adjusted returns, time horizons, and liquidity needs to help support long-term sustainability through effective asset utilization.
Aligning portfolios with a wide range of mission-related items, such as religious values or environmental objectives.

Guidance and Advisory Services

Beyond portfolio management, an OCIO can provide governance best practices and actionable insights to help with decision-making. This includes board education, giving leadership the confidence to make complex financial decisions.

Exploring Your Options

A knowledgeable partner can help you explore a range of strategies to manage cash flow based on your organization’s unique financial situation. For example, many organizations utilize commercial lines of credit collateralized with investable assets, while some secure financing at below-market rates from philanthropic partners or CDFIs.

Establishing an Endowment An OCIO can help customize an investment policy, implement an asset allocation strategy, amplify development efforts, and educate stakeholders on long-term benefits and considerations.	Strategic Asset Liquidation An OCIO can help guide the adjustment of an endowment’s spending rate to improve its liquidity. This can assist in bridging an organization’s funding gaps, supporting new initiatives, or maintaining operations until stable revenue streams can be established.
Adjusting Existing Endowment Allocations For organizations with an endowment in place, reallocating a portion of assets to an operating reserve can give greater flexibility to sustain operations, adapt to changing risk environments, and provide liquidity during periods of financial uncertainty. This reallocation is typically board-designated or donor-permitted.	Donor Cultivation and Stewardship One significant advantage to partnering with an OCIO is their capacity to bolster donor cultivation and philanthropic stewardship. OCIOs provide valuable support in performance reporting and transparency for donors and can help enhance donor stewardship to build long-term philanthropic relationships.

Managing Uncertainty With an OCIO Partnership

Tailored investment and financial planning empower human services organizations to achieve financial stability and mission fulfillment. By partnering with an OCIO, your organization can confidently navigate financial uncertainty and focus on making a positive impact on the communities you serve.

This material is provided solely for informational and/or educational purposes, does not provide any financial, investment, tax, legal or other advice, and should not be construed as a recommendation to take any particular course of action. Information obtained from third-party sources is assumed to be reliable but may not be independently verified, and the accuracy thereof is not guaranteed. Any potential outcome discussed, including but not limited to performance, legislation or tax consequence, ultimately may not occur. The information presented is current as of the date of publication and is subject to change. Readers should contact Glenmede or consult with a financial, investment, tax, legal or other advisor if they have any questions about this material or want advice or more information.