Setting up 501(c)(3) account

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Tony-S
Posts: 26
Joined: Tue Sep 18, 2018 11:48 am

Setting up 501(c)(3) account

Post by Tony-S » Sat Jan 12, 2019 9:58 am

I am an officer of a non-profit 501(c)(3) organization and our funds have been managed by an advisor that charges about 1% fee per year and has underperformed the S&P 500 substantially. I think moving to passive index funds is probably a good move and I am looking for advice on how to go about this (provided I can convince the other officers to do so). Does Fidelity or Vanguard offer a mechanism by which the organization can move its funds so as to invest in low-cost index funds? I'd like to get as much background info before contacting one of the companies.

nordsteve
Posts: 663
Joined: Sun Oct 05, 2008 9:23 am

Re: Setting up 501(c)(3) account

Post by nordsteve » Sat Jan 12, 2019 11:00 am

I’ve been an officer and director of multiple nonprofit organizations.

Given that you intend to liquidate the positions held at your legacy advisor, what you propose is very simple. The organization opens a new account at Vanguard or Fidelity. You direct the advisor at the legacy advisor to liquidate your positions and then write a check for deposit into the new account.

Does the nonprofit have an investment policy? If not I can provide a link to a sample for one of the organizations that I’m involved in. The conversation around and investment policy can also be a useful one in helping to convince other directors that a change in the investment management approach is beneficial.

Topic Author
Tony-S
Posts: 26
Joined: Tue Sep 18, 2018 11:48 am

Re: Setting up 501(c)(3) account

Post by Tony-S » Sat Jan 12, 2019 11:37 am

Thanks for your reply - yes, a link to an investment policy would be great!

So, in terms of setting it up, do I need to call V or F and ask them to do it, or can it be done online like personal accounts?

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