Client Snapshot

A 40-year-old charitable foundation was unsatisfied with its administrative trustee and investment manager. The board engaged Wescott for the investment management needs of the foundation to improve performance and administrative support, and reduce underlying fees.

Situation and Outcome

The foundation had been established through a benefactor’s will, and today is managed by a six-person board to support the education, special needs and welfare of a select population in the Northeast United States.  As a typical foundation, they accept and evaluate grant requests, and by law must distribute five percent of principal each year.

The client began its relationship with Wescott more than a decade ago on the referral of another Wescott client.  The foundation had employed an organization that was both the corporate trustee and investment manager, but grew unsatisfied with the performance of both aspects.  They tapped Wescott to help engage a new administrative trustee, as well as assume investment management for the foundation.

Wescott faced a daunting task. When originally drafted, many of the trust documents and wills were phrased in inflexible language, especially pertaining to changing the corporate trustee.  The client went to court to make the change.  Other transitions with which Wescott assisted included finding the new trustee, identifying and replacing underperforming investments, and taking the portfolio from a singular focus on large, blue chip stocks and introducing greater diversification.

What makes Wescott unique with regard to managing non-profit, foundation accounts is that Wescott is involved in more than just investment management.  The board looks to Wescott for advice on tax issues and distribution requirements.  When the board sought to change its administrative director, Wescott advised on the job description.  Throughout the decades-long engagement, Wescott has attended quarterly and semiannual board meetings, providing a review and summary of the organization’s investment portfolio.

Lessons Learned

The client has learned to rely on Wescott not just as a money manager, but as a trusted financial advisor—and to call on Wescott with any question remotely related to the financial well-being of themselves or the organization for which they have a fiduciary responsibility.  Managing the investment portfolio is one small piece of the puzzle.