“Donors expect philanthropic organizations to provide the same caliber of service as their banks, brokerage firms and custodians, but these non-profits lack the integrated technology solutions they need to effectively compete for donor assets,” said James Lumberg, co-founder and executive vice president at the New York-listed firm.

The white paper, entitled Endowments and Foundations: Adapting to a New Paradigm, examines the “evolving needs” of foundation and endowment organizations, which believes have historically been underserved by traditional investment management consultants.

The white paper highlights that while endowments and foundations managing investments for charities and foundations are typically exempt from Investment Adviser Act of 1940 registration, they still have many of the same needs as their registered counterparts.  

“As charities begin to manage their own investment portfolios and serve as non-registered investment advisors for ‘sister’ or partner entities, their needs expand dramatically,” Envestnet, the provider of wealth management technology and services to investment advisors, said.

According to Pamela Jacobs, a principal at PFJ Consulting, many philanthropic organizations are surprised to learn that upgrading their technology saves them more time and money than creating their own solutions from scratch.

The white paper recommends that non-registered investment advisors obtain more “bang for their buck” by outsourcing to investment service providers such as RIA platforms, turn-key asset managers and broker-dealers.