JOIN MY FREE <Enter in the title, description, and main benefit of your lead magnet here>
Kate Azar, Director of Nonprofit Strategy for PNC Institutional Asset Management has extensive experience in the nonprofit sector. Kate shares invaluable insights into investment strategies for nonprofits and the potential of artificial intelligence (AI) in enhancing organizational effectiveness.
In this episode of The Nonprofit Counsel Podcast, host May L. Harris sits down with Kate Azar, Director of Nonprofit Strategy for PNC Institutional Asset Management. With extensive experience in the nonprofit sector, Kate shares invaluable insights into investment strategies for nonprofits and the potential of artificial intelligence (AI) in enhancing organizational effectiveness.
Understanding Nonprofit Investments
Kate begins by explaining that managing investments for nonprofits requires a nuanced understanding of the organization's goals and capacity. An endowment can be a powerful tool, but it’s not suitable for every nonprofit. Kate emphasizes the importance of assessing whether an organization can afford to set aside funds for long-term investment versus addressing immediate needs.
Nonprofits must be prepared for donor inquiries regarding their financial strategies, especially when large gifts are involved. Transparency about the rationale for establishing an endowment versus using funds immediately is essential for maintaining donor trust.
When nonprofits decide to invest, Kate highlights the importance of aligning investment choices with their mission. PNC’s dedicated nonprofit team focuses on investments that not only yield returns but also reflect the values and goals of the organization. This approach can include responsible investing and ESG (Environmental, Social, and Governance) criteria.
Kate points out that engaging boards and finance committees in meaningful conversations about investment strategies can lead to innovative solutions that enhance both mission impact and financial returns.
Fiduciary Responsibilities and Governance
Kate stresses the need for strong policies and guidelines regarding the use of endowment funds. Nonprofits must clearly define the source of their funds, the restrictions imposed by donors, and the intended use of those funds. This clarity is crucial, particularly during crises when access to funds may be necessary.
May shares a personal anecdote about navigating rigid endowment policies during the COVID-19 pandemic, underscoring the need for flexible, up-to-date governance structures to prepare for potentially difficult times. Additionally, regular policy reviews can help organizations adapt to changing circumstances and ensure they remain effective.
The Role of AI in Nonprofits
Transitioning to the topic of AI, we discuss the potential benefits and risks associated with its use in the nonprofit sector. While AI can offer efficiencies in operations and support fundraising efforts, organizations must approach it with caution.
May and Kate place emphasis on the importance of understanding the data that AI tools rely on, as flawed or biased data, can lead to problematic outcomes. Nonprofits should consider developing policies regarding AI use, ensuring that all generated content is reviewed by qualified individuals before dissemination.
Kate concludes by highlighting the ongoing evolution within the nonprofit sector, driven by technological advancements and shifting demographics. As organizations face a changing landscape, the importance of succession planning and engaging younger generations in leadership roles becomes increasingly critical.
Subscribe to the Nonprofit Counsel Podcast today to stay on top of the latest insights and strategies about improving your nonprofit organization’s financial wellness and reinforcing long-term success and impact. For even more updates and valuable content, be sure to follow Nonprofit Counsel on LinkedIn & Instagram.