Key Takeaways
- • NEPC, drawing on surveys and interviews with 12 community foundation clients in August 2026, identifies five governance practices for running advisor-managed funds (AMFs) sustainably.
- • Delegating investment management does not delegate fiduciary responsibility: the foundation still owns the accounts, sets investment policy, oversees compliance, and authorizes grants.
- • Among surveyed institutions, AMF minimum account sizes ranged from $250,000 to $5 million, with most falling between $500,000 and $1 million.
- • Administrative complexity can exceed investment complexity, with reporting, reconciliation, compliance monitoring, and advisor communications cited as the main burdens.
- • Clearwater was the most frequently cited reporting and monitoring platform, alongside Give Interactive, NetSuite, CommunitySuite, and advisor-provided systems.
Summary
Advisor-managed funds have become a common feature of community foundation investment programs. Under these arrangements, charitable assets remain under the legal ownership and fiduciary oversight of the foundation, while investment management is delegated to an outside advisor selected by or associated with a donor. According to NEPC, AMFs help foundations attract donors who want to keep their trusted advisor involved, and they can also serve as a referral channel that encourages advisors to introduce prospective donors to community foundations.
NEPC states that the central challenge is that delegating investment management does not delegate fiduciary responsibility. Foundations must still hold the accounts, establish investment policy guidelines, oversee compliance, authorize and distribute grants, and remain accountable for prudent stewardship. Because the donor, the advisor, and the foundation all play roles, administration can be time-consuming, covering cash movement, performance reporting, audit support, account-statement collection, custodian reconciliation, and benchmark maintenance.
NEPC's findings, based solely on responses from 12 community foundation clients surveyed in August 2026 and not an independent third-party study, outline five practices. Foundations should first define the program's purpose, whether donor retention, acquisition, advisor engagement, asset growth, or flexibility for larger gifts. They should also set minimums that reflect program economics rather than fundraising goals, since many partners warn against repeated exceptions for smaller accounts based on expected growth that may not materialize. Written AMF-specific policies, approved by both advisor and donor, should be established at the outset, covering advisor approval, performance expectations, asset allocation, reporting, and modification or termination terms.
Programs also need periodic advisor reviews with defined agendas, escalation procedures, and termination provisions, with decision-making authority explicitly divided among the board, staff, and advisor. Finally, NEPC recommends investing early in scalable infrastructure, since spreadsheets suffice only for a small number of relationships. NEPC finds that scalability depends more on operational infrastructure than on institutional size, and that a small number of customized relationships can create significant demands if reporting processes are not standardized.
NEPC states that the central challenge is that delegating investment management does not delegate fiduciary responsibility. Foundations must still hold the accounts, establish investment policy guidelines, oversee compliance, authorize and distribute grants, and remain accountable for prudent stewardship. Because the donor, the advisor, and the foundation all play roles, administration can be time-consuming, covering cash movement, performance reporting, audit support, account-statement collection, custodian reconciliation, and benchmark maintenance.
NEPC's findings, based solely on responses from 12 community foundation clients surveyed in August 2026 and not an independent third-party study, outline five practices. Foundations should first define the program's purpose, whether donor retention, acquisition, advisor engagement, asset growth, or flexibility for larger gifts. They should also set minimums that reflect program economics rather than fundraising goals, since many partners warn against repeated exceptions for smaller accounts based on expected growth that may not materialize. Written AMF-specific policies, approved by both advisor and donor, should be established at the outset, covering advisor approval, performance expectations, asset allocation, reporting, and modification or termination terms.
Programs also need periodic advisor reviews with defined agendas, escalation procedures, and termination provisions, with decision-making authority explicitly divided among the board, staff, and advisor. Finally, NEPC recommends investing early in scalable infrastructure, since spreadsheets suffice only for a small number of relationships. NEPC finds that scalability depends more on operational infrastructure than on institutional size, and that a small number of customized relationships can create significant demands if reporting processes are not standardized.
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