Investing Your Chapter Assets

Prepared by the Finance Committee

"Compounding interest is the greatest mathematical discovery of all time," Albert Einstein supposedly claimed. Recognizing the importance of investing is not what made this genius famous, but his statement is a great reminder of the power of investing wisely.

To grow assets and provide income for your Sigma chapter, consider investing its excess funds.

Before Investing

However, before a chapter can embark on any investing chapter assets a few major activities must occur.

  • A complete budget must be prepared and approved by the Board.
  • A strategic plan must be prepared.
  • Short and long term financial needs should be assessed.
  • Investing policies and procedures should be adopted.

To complete these activities, refer to the Treasurer's Orientation Webpages for guidance and assistance.

Choose a Consultant

Once you have these items in place, you are ready to interview and contract with a qualified investment consultant. A qualified investment consultant can assist your chapter with more than just investing the chapter's funds. They can also aid in the following areas:

  • Review, development and refinement of investment policy, objectives and guidelines.
  • Asset allocation planning.
  • Assistance in investment manager selection.
  • Investment performance evaluation.
  • Bank selection.
  • Special investment studies.
  • Preparation of development materials for donor reporting and fundraising.

One frequently asked question by chapters is, "As officers of the chapter, what is our fiduciary responsibility when managing our investments?" Although many statutes relate to this topic, the one we often refer to is the Uniform Prudent Investor Act of 1994. When referring to the care required managing investments the act states, "A trustee shall invest and manage trust assets as a prudent investor would, by considering the purposes, terms, distribution requirements and other circumstances of the trust. In satisfying this standard, the trustee shall exercise reasonable care, skill and caution."

Remember that investing is a long-term strategy. You have to ride out the highs and the lows of the market and economy. Do not base your chapter's financial health or budget on short-term profits or windfall gains. Instead, use investing as a means to supplement the chapter's unrelated business income.

If you need help in developing a plan to select an investment consultant or to prepare a request for proposal, please contact the Accounting department ( at Sigma. They will be happy to assist your chapter in this process.