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Museum Transforms Investment Strategy to Secure its Future

Professionals reviewing documents in an Art museum

CLIENT PROFILE 

Bank of America Private Bank’s client, a well-regarded contemporary art museum in the Midwest, was faced with complex challenges as it sought to strengthen the institution’s financial footing. The museum needed to find a better way to manage its finances and its endowment investments, and had to greatly improve how its Investment Committee functioned.

APPROACH

Although it has no permanent collection, the museum had garnered national acclaim for its acumen in exhibiting new artists. As the institution’s program had matured, it was clear that it needed to rethink how it managed its finances. Its Investment Committee was not functioning effectively, and the approach to endowment management was not optimal.

  • Thanks to an existing client relationship with a board member, a Bank of America Private Bank Philanthropic strategist was introduced to the director, who appreciated Bank of America’s stalwart support of the arts.
  • Bank of America Private Bank learned that the Investment Committee had been focused on debating tactical decisions—such as which specific funds to invest in—and that some committee members had disproportionate influence on manager selection. The chief financial officer position was also not structured to handle the museum’s increasingly complex financial needs.
  • The museum’s Investment Committee invited Bank of America Private Bank to pitch for the investment management accounts.
  • After winning the business, Bank of America Private Bank consulted on the Investment Committee structure and governance practices, as well as the investment portfolio, but the scope of assistance soon broadened.
  • Impressed with Bank of America Private Bank's initial ideas, the director asked the team for a full range of recommendations to improve the institution’s fundraising and donor development strategy.

SOLUTIONS

  • The museum engaged Bank of America Private Bank as an Outsourced Chief Investment Officer (OCIO), which would act as a co-fiduciary and assist with investment decisions with guidance from the Investment Committee.
  • Bank of America Private Bank also educated committee members around roles and responsibilities and best practices, allowing the committee to focus on shaping an overall investment strategy, outlining policy and risk characteristics.
  • The museum empowered its Chief Financial Officer and leadership and development teams to gain clarity about their fundraising effectiveness through a rigorous analysis of return-on-investment and systematic expense management.

RESULTS 

By working with the Bank of America Private Bank team of Philanthropic strategists, our client is:

  • Benefiting from an OCIO model for portfolio management, which has freed its Investment Committee to serve as a sounding board and focus its attention on governance.
  • Achieving competitive portfolio performance with 6% endowment returns, while accommodating existing alternative investments and mission-aligned values.
  • Embracing a strategic planning process that is leading to more structured, transparent decisions about how money is raised and spent, resulting in a $400,000 year-over-year increase in donations.

THE POWER TO

imagine, illuminate and inspire

At Bank of America, we believe in the power of the arts to help economies thrive, educate and enrich societies, and create greater cultural understanding. That’s why we are a leader in helping the arts flourish across the globe, supporting more than 2,000 nonprofit cultural institutions each year.

Our arts support is wide ranging. We believe the neighborhood playhouse can be as important as the world-class museum or orchestra in its value to the community, in the lives of its citizens and in the education of its young people. A key component of our arts program is to help nonprofit institutions illuminate varied cultural traditions and to help the arts sector create pathways for more diverse employment and engagement.

The Bank of America Art Program is part of the company’s commitment to grow responsibly while bringing value to economies, society and the communities we serve.

To learn more about our arts support, please visit bankofamerica.com/arts.

MANAGING YOUR WORTH WITH BANK OF AMERICA PRIVATE BANK

Your wealth is not measured by numbers alone, but by the extraordinary opportunities and complex challenges that define your life. At Bank of America Private Bank, we apply our deep insight and broad expertise to help you make the most of the things that matter most to you.

We begin by listening to you, learning about your life, and working with you to understand your priorities. Your advisor and your team of specialists then build a wealth plan that aligns with your personal values and family goals.

Whether we are managing your portfolio, serving as trustee, or administering an estate, our focus is what best meets your objectives. Together, we develop personalized solutions that address the dimensions of your worth today and the legacy you’re building for future generations.

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