How advice can power a legacy

Investing

5 min read

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Every foundation, trust or charity exists to make a meaningful difference. At the time of writing, there are estimated to be close to 30,000 registered charities in New Zealand[1]. Collectively, they make up a rich and diverse ecosystem of goodwill that plays an extremely important role in Kiwi society. The long-term health of these inspirational organisations relies on sound financial planning, but it can be hard for trustees who don’t have a financial background to know how to maximise their funds.

In our experience, most trustees don’t put their hand up for the role because they love finance and markets, or because they want to help to manage an investment strategy. They step up because they care about a cause, a community or an entity’s legacy. Whether the mission is to strengthen communities, preserve culture, support the environment or fund future generations, trustees and boards share a common goal: to steward resources responsibly and maximise the positive impact of every dollar.

Yet for many entities, navigating the financial landscape can feel overwhelming. Common areas of concern that we’ve come across in our work, include the following:

Trustees and boards want confidence that they are meeting their fiduciary duties.
Funding is the enabler of impact and there is always increasing pressure to improve performance – but determining the best way to invest and allocate capital may fall outside the expertise of in-house teams.
Reporting expectations continue to rise – with larger stakeholders increasingly wanting clarity on both financial outcomes and the real-world difference their investment portfolio is making.
Terms like ‘impact’, ‘sustainable’, ‘ESG’, and ‘ethical investing’ are often used interchangeably – trustees need clarity to ensure their investments align with their mission and values.

And to add to this, as an entity evolves, so does its investment needs.

Evolving investment models – from classic to hybrid

As entities grow, their goals and stakeholder expectations naturally evolve. Many are reassessing how they approach investing, governance, impact and collaboration. They are realising that the way they’ve driven their investment strategy in the past, may no longer be the best route for where they want to go next. A simple analogy can help illustrate the shift:

1.The traditional model – the classic car

Adviser: the driver – responsible for taking the entity to its destination

Entity: the paying passenger – holding the map and tuning the radio

Community / beneficiaries: passengers in the back seat – along for the ride

2.The emerging model – the modern hybrid

Adviser/partners: still driving at times – particularly in specialist areas such as ethical investing, global equities, governance, or aligning risk with the right investment strategy.

Entity: increasingly giving the driver directions, for direct or impact-focused investments, where local knowledge, cultural understanding, and community relationships play a central role.

Community / beneficiaries: moving to the front, influencing direction as entities seek investments that truly reflect their values, identity, and long-term aspirations.

Each entity is different and has various preferred ways of working. But broadly speaking, the hybrid model gives entities greater ownership over the legacy that they are building, as well as the outputs of the advice service that they are paying for. But it often requires expert support.

The increased number of stakeholders in today’s non-profit space require effective collaboration to avoid inefficiency and disagreement from creeping in. Likewise, it never works well when multiple stakeholders offer multiple opinions without effective governance in place. To counter that, robust accountability models for advisers are needed, to ensure the overall mission is being met.

How we can support our clients’ mission

Helm Wealth works with non-profit organisations throughout New Zealand. And a significant shareholder of our business is the Rātā Foundation – the South Island’s largest philanthropic funder. In other words, purposeful work is at the core of our organisation.

By recognising that a ‘one-size-fits-all’ approach is inappropriate in the dynamic non-profit space, we tailor our advice and investment services to each client.

Broadly speaking, these are the five areas of our offering that we feel add value and support when working with foundations, charities and non-profit organisations:

1. Risk management and diversification

The challenge for our clients is managing risk as well as the amount of capital tied up in direct assets or projects. With this in mind, we develop investment portfolios that consider the entity’s total assets and are aligned with their risk tolerance. We provide access to a broad range of asset classes and investment capabilities designed to support long-term financial resilience.

2.Flexibility and transparency

Investing is best done over the long term and too many short-term changes to a portfolio can ultimately drag on performance and introduce unnecessary cost. That said, we recognise that priorities and circumstances can evolve over time, so our offering caters to flexible needs when appropriate. We can also build and manage portfolios to support reporting requirements, ethical preferences, or mission-aligned priorities.

3.Education and support

Investment governance is a significant responsibility, and, in many cases, we find that trustees can feel this burden falling on their shoulders. When you don’t have a finance or investment background, the pressure to navigate the complexities and legalities of investments can feel overwhelming. The good news is, in addition to financial planning, we can help build confidence and capability by:

Running client workshops for trustees and staff on investment fundamentals, governance and risk.
Helping draft or review a Statement of Investment Policy and Objectives (SIPO) so it correctly reflects the mission, constraints and values of the entity.
Providing regular portfolio reviews in plain language, explaining what’s happening with performance and why.
Running events for key stakeholders to support informed decision-making.

4.Investment strategy alignment

Thoughtful alignment can help strengthen both financial and non-financial outcomes. We work with our clients to ensure their investment strategy reflects the mission that they are serving.

This may include:

Aligning investments to long-term legacy goals.
Incorporating sustainability considerations.
Excluding certain industries or businesses like weapons, alcohol, gambling or animal testing.

5.Reporting that supports accountability and growth

We have the technology in place to make legally required reporting an efficient process.

Our technology platform allows entities to maintain multiple investment strategies within a single (tech) system and, when needed, to track individual donor pools. It provides clear, transparent reporting and makes it easy to show large donors the specific impact of their contributions, helping to build confidence among both existing and prospective supporters.

Strengthening your legacy together

Foundations, trusts and charities play a vital role in shaping resilient, thriving communities and beneficiaries. By partnering with Advisers who understand the unique challenges and responsibilities of investing for non-profits, trustees and boards have more capacity to focus on their on-the-groundwork and strategic goals. In turn, they can feel confident that their financial stewardship is in capable hands.

To explore how we can support your investment strategy, governance, and long-term legacy please reach out. We’d be delighted to help.

Sources and references

[1] Source: https://www.charities.govt.nz/__data/assets/pdf_file/0021/15375/Nga-Ratonga-Kaupapa-Atawhai-Annual-Review-2023_2024-V1.pdf

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