Things aren’t always as they appear — especially if one’s perspective is limited.
Take non-profit institutions’ investment plans, where a too-narrow focus can be quite problematic. If an outsourced CIO restricts its focus to simply the investment pool and investment policy, I contend that the institution is being done a disservice — one that could result in a strategy that does not address its unique short- and long-term needs.
Enter the “holistic OCIO.” Under this approach to the OCIO model, a non-profit institution is viewed not merely through an investment-related, or even finance-related, lens. Rather, a holistic OCIO addresses wide-ranging institutional factors that extend well beyond investment management.
A holistic OCIO approach is a total institutional partnership that one might expect to have within the organization’s own internal offices. In my experience, this relationship begins with taking the time to understand the institution as a whole, not just its finances. This means asking about more than returns and risk profiles, more than limitations and budgets, more than asset pools and portfolio management. It means beginning the conversation (and the engagement) further up the operational food chain — that is, by gaining an understanding of mission, strategic goals, business issues and concerns, and the role of the asset pool.
In short, a holistic OCIO focuses on gleaning the nuances of the total organization in order to build an efficient portfolio designed to meet that organization’s unique requirements.