• Suitable Asset Allocation Strategy
  
  What experience has taught us is that when it comes to meeting spending targets or investment goals consistency of returns is far more important than any notion of beating the market.  In the last ten years we have witnessed the return to a flat market cycle where the ups and downs of the market result in very little progress over 15 to 20 year periods.  Many organizations still believe and hope that the old buy and hold asset allocation methodology will once again be effective.  We believe that we are only half way through this flat cycle and it may be another decade before we are back to a bull market cycle.
  
  We find all effective Non-profit organizations must take risk with their long term assets as a means of accomplishing their core mission.  But the organization must take great care to adopt a Suitable Asset Allocation Strategy so as to not jeopardize their core mission.  Further we have developed a process to bring greater controls to the risk exposure of your portfolio (see Active Risk Control Service) for those organizations concerned about market volatility.
  
  It is at this step of the process that we define the investment vehicles and the mixture necessary to accomplish the required return objectives of the organization.  As a fee based adviser we gravitate to transparent, low cost, highly liquid investment options for our clients.  While returns are uncertain management and transaction costs are not so we work diligently to minimize both.  We also believe that it is not prudent to always expose your investment assets to the risk of the equity markets.  Through our Active Risk Control Service we take great care to protect your capital base from the dramatic market shocks that are typical in a Flat Market Cycle.

• Investment Policy Development & Refinement
  
  Once your investment team and board have determined the appropriate risk level to accomplish your organizations objectives, go slow or full speed ahead, we help construct an Appropriate Investment Policy Statement (IPS).  All good strategies must have governors to prevent the assets from being hijacked by a rouge board member, but we believe more importantly to create the check list by which you will evaluate the success of your program.  Emotions can cloud investment decisions and having a well constructed investment policy is a powerful tool to create a rational process by which you evaluate investment decisions.
  
  We also find that many organizations are operating on an IPS developed years ago which doesn’t reflect the current objectives of the organization.  Many policies lump all investment funds into one bucket and attempt to average short, intermediate, and long term objectives into one fund.  While seeming reasonable in theory it creates accounting complications and a real disconnect between strategy and funding need.  When constructing policies for organizations we frequently develop between three and six risk adjusted funds to appropriately match risk with need.  Thus we can place the capital with short term needs in less risky strategies, and those with longer term time horizons in more long term return focused strategies. 

• Controlled Funding Status
  
  If you have navigated on a large body of water like the ocean, Gulf of Mexico, or the Great lakes, where you can’t see land, you know how important a GPS or some other navigational aid is in keeping you on track to your destination.  In the investment world we believe funding status is the GPS equivalent.  Understanding the funding status allows for course corrections to keep your programs moving towards your destination.  We work with our clients to help them understand when their investment programs are over-funded, under-funded, or are in the control-zone.  This process allows your team to act in their fiduciary capacity to make the necessary course corrections adjusting those factors they can actually control like spending, funding, and risk levels.  We use the same methodology used by the major foundations and endowments to stress test your goals and targets against real potential outcomes simulating over 1,000 unique market return scenarios.  Some good, some bad but each representing a potential variable return sequence that is more important than the actual average return you receive.

We have also spent many years developing easy to understand reporting based on four pillars of accountability which provide clarity and transparency on four fronts:

• Absolute Returns
• Peer Group Returns
• Relative Returns
• Investment Policy Compliance

2) Investment Thought Leadership

First and foremost, we are committed to helping facilitate Best Practices within the organizations with whom we work. This is paramount in today’s environment of increasing donor expectations and regulatory scrutiny.  Here are five areas that we would like to highlight that are both relevant and timely:

• Active Risk Control Service:  In addition to our traditional consulting model we have developed a more comprehensive risk management strategy for our Non-Profit clients that want a better capital protection strategy.  Having now experienced two major market declines in the last 10 years, for many organizations a third would be financially devastating.  Since the market peak in 2000 we have failed to re-establish new highs especially when evaluated on an inflation adjusted basis.  Historically, Flat Market Cycles have lasted about 18 years, which means there is a better than average chance of experiencing a continuation of the volatile go nowhere markets for another decade.
  
  Our Active Risk Control Service (ARCS) is designed to provide returns necessary to carry out the mission of your organization by increasing the probability of achieving your targeted rate of return.  We have done extensive back testing of the ARCS discipline using 48 years of historic data.  The back testing demonstrated the process would have increased the probability of meeting the return objective to over 80% from just over 50% in any six year period since 1962.  At the same time it establishes a set of rules that will reposition your portfolio to a defensive posture should market conditions breakdown.  The fundamental strategy is to protect organization capital base against market significant declines so extreme returns are not necessary to get your investment plan back on track.

• The Stewardship Plan:  We have also developed a process entitled “The Stewardship Plan” which is designed to help potential donors realize their full capacity to support those organizations that have touched their lives.  Just like many organizations, we find potential donors are struggling with a stewardship dilemma of supporting their family and the organizations they care deeply about.  The core objective of “The Stewardship Plan” is to give donors that have the capacity to give the “permission” to give.  For those that don’t have the capacity at this time you can encourage them to support in other ways.  It is our belief that many donors have more capacity than they realize.

• Board Education:  There is an increased desire to be educated on the objective and important matters that help Non-profit leaders cut through the fog of data and headlines created by the marketplace and the media.  From the beginning we have been committed to improving the competency and awareness of the organizations we serve. Many Boards and Investment Committees desire to stay informed of the latest developments and trends in the investment world.  Quarterly we provide economic updates on developments that have occurred as well as the risk and opportunities we see ahead. 
  
  We also share best practices from other organizations we serve and provide updates on issues that matter. For instance, there is much discussion today around the topic of Socially Responsible Investing (SRI).  Additionally, there are many questions about just how much Sarbanes-Oxley* legislation will impact the non-profit community. There is also a desire to simply be educated on the objective economic data that helps ministry leaders cut through the fog of information served up by today’s media. We are committed to providing our clients with the information and answers that help them stay informed and run their organizations with the utmost integrity. 

• Reporting:  United Capital reporting is designed to bring clarity and measurability to the reader.  Quarterly reporting follows strict guidelines to help board members meet their fiduciary responsibility.  Economic updates, compiled from an extensive network of internal and external resources, are also provided, under girding existing and emerging strategies.  We also provide online access, specifically tailored to executives, planned giving professionals, accounting staff and engaged donors. This access provides relevant data in presentation format or in download format with daily valuations.   United Capital, continues to add innovative reporting, analytical tools, and other resources which ultimately enhances the decision making capabilities of the fiduciaries we serve.

• Investment Policy Compliance: In our quarterly performance report, we provide our clients with an Investment Policy oversight report. Regular monitoring of compliance with the investment policies is absolutely necessary to limit liability.  Poor investment performance alone does not necessarily create liability for an organization. However, poor performance in the absence of a prudent investment policy statement or in non-compliance with existing policies, almost certainly will.

3) Meeting the Unique Needs of Non-profit Organizations

Non-profits are born out of great passion, need or calling.  Our goal is to provide the investment programs and leadership that can help you realize a greater impact.  We have been committed to helping Non-profits accomplish this goal for over 15 years.  We have developed specialty knowledge across a spectrum of investment programs unique to Non-profit organizations including gift annuity programs, donor advised funds, charitable remainder/lead trusts, endowments, and/or scholarship programs to name a few.  Our team offers concrete solutions to facilitate that growth. Whether it is our decision making tools, technology, strategies or compliance guidelines necessary to facilitate a well managed planned giving program, your organization will gain confidence in your donors’ eyes with less burden on your financial professionals. You can also gain confidence in knowing we will endeavor to maintain the alignment between your investment strategy and the values, objectives and callings that are distinct to your organization.  We are inspired and excited for the chance to help create, protect and release financial resources to your organization.

Recap of Our Strengths

The strengths and distinctive abilities of our firm can be summarized by three key points:

• Proactive, Independent Portfolio Management which leads to reliable and consistent investment performance.
• Investment Thought Leadership and Clarity which achieves and maintains alignment between your investment strategy and your organizational goals and objectives.
• Specialization and understanding of the unique needs of the Non-profits which allows us to partner with you as you seek to achieve the goals of your founding members.