The composition of the investment committee is as important as the development of a nonprofit’s investment policy and its portfolio design. Without thoughtful and intentional planning, the committee appointed to expand a nonprofit’s influence and reach can sometimes encumber the organization and limit its impact—an outcome to which no one aspires.
Using MODEL as an acronym helps us consider the essential elements for building an effective investment committee.
The size of the committee can either improve its agility or slow it considerably. Our experience suggests seven or fewer members tends to work best, keeping in mind that an odd number of formal voting members will ensure the committee’s never locked in the stalemate of a tied vote.