Why this guide exists

Our investment guide for foundations and charities explains the principles of investing for long-term success. We help foundations and charities understand and reflect on the 20% of investment concepts that explain 80% of what they need to know. Charities often end up investing too cautiously for their own good, missing out on the long-term growth of their capital.

Third edition

Highlights of our third edition include additional material on key themes such as asset allocation (part 2), diversification (part 3) and risk management (part 5), together with a call to action for investors to make the most of a long time horizon (part 7). Designed for new and experienced investors alike, our guide outlines the essential elements of investing.

Click on the titles below to view or download each part of the investment guide in PDF format:

1) Start with why
Check that the organization’s purpose and objectives are right for the future. See if investing makes sense by addressing five key questions.

2) Set the mix
Build a strong foundation for the investment program by setting the asset mix – the blend of stocks, bonds and cash in the portfolio. This decision contributes more to long-term success than any other.

3) Diversify
Diversify to avoid being too cautious or confident about the future. Important ways to diversify the portfolio include asset mix, asset selection, foreign currency and investment strategy.

4) Simplify
Aim for simplicity, not just in selecting investments but also in dealing with the investment industry and engaging the finance committee. Simple is more durable than complex over the long term.

5) Balance risk
Plan for the risks of short-term loss and long-term erosion. Set a risk tolerance by considering the organization’s ability, willingness and need to take risk.

6) Control cost
Know what you’re paying and why. Over the long term, the difference between low costs of 1% and high costs of 3% could be worth more than the entire amount you started with.

7) Use time
Make the most of a long time horizon. How well you use your time horizon depends to a large extent on whether you approach investing from a leadership or management perspective.

8) Own the plan
Develop a plan that covers governance, investment and spending policy. Seek to pursue a learning agenda, not just monitor short-term performance. Process sets up performance.

9) Build inside
Sustain the investment program by selecting teachers within the organization. Form a transition and learning plan that builds investment and leadership capacity for the long term.

10) Build outside
Develop the investment and leadership capacity of others through mentorship, peer exchange and workshops. Share your success and inspire the next generation to make a difference for Canada.