A new chapter begins
How a governance budget can help steady the course for not-for-profit organisations
As not-for-profit organisations (NFPs) face more complex operating environments, having a structured governance budget can help ensure that adequate resources are available.
This uncertainty can leave NFP organisations asking themselves: How do we make sure we’re using our time and energy where it counts most?
That’s where the notion of a “governance budget” starts to come into focus, not just as a technical tool, but as a practical lens. It’s not about spreadsheets or costs alone, but about how NFP investors navigate uncertain terrain. It’s a way to map out the true cost of investment oversight: time spent making decisions, evaluating risk, selecting managers, and adapting when shifting markets necessitate it.
There are organisations who have long operated with this in mind. They’ve carved out roles, clarified responsibilities, and built decision-making processes that are nimble but well-anchored. When volatility spikes, like it did in early 2020 or again in the first half of 2025, they aren’t scrambling. They’re ready. Their governance frameworks aren’t just theoretical, they’re lived-in, tested, and refined.
Others, by contrast, found themselves managing through the start of the year developing policies as needed. Even with strong portfolios, decision bottlenecks and resource misalignments left them unable to rebalance quickly or assess emerging risks with confidence. Opportunities went uncaptured. Risks weren’t fully understood until it was too late. This all being said, many have been successful in managing through the uncertainty. This has come with increased recognition of the importance of strong governance, and that successfully managing through volatile times is the result of good response planning rather than good luck.
This isn’t to say there’s a right way to implement a governance framework that applies to all NFP organisations. Some lean into building internal capacity; others work with consultants or investment managers. What could matter most is having a framework, some shared understanding of where the organisation stands today and what it needs to navigate the future.
As geopolitical risks rise and inflation pressures persist in many regions around the world, many NFP organisations are revisiting not just investment portfolios but the scaffolding around them, asking how their governance structures helped or hindered their ability to respond and noticing which parts of their process absorbed shock and which cracked under pressure.
How we believe a governance budget can help in practice
First, it can provide clarity. By formalising how decisions are made, who decides what, and when, a governance budget potentially minimises confusion in moments that demand agility. This can be critical when portfolio changes need to happen quickly, as or when new risks or opportunities arise.
Second, it can sharpen focus. With limited resources, finance committees can’t do everything. A governance budget helps prioritise efforts, potentially spotlighting where internal teams can drive value and where external partners (like implemented consultants, specialised consultants and investment managers) might fill gaps more efficiently.
Finally, it can promote accountability and continuous improvement. Regular reviews of governance effectiveness, from decision timelines to manager oversight, can help boards stay aligned and responsive.
Recent market dynamics have served as a reminder that stability is never guaranteed. For institutions with a firm grasp on their governance strengths and a realistic view of where additional support may be needed, there may be an opportunity to shift from reaction to readiness. In doing so, they’re not only managing risk more effectively but could be creating the conditions to act decisively when long-term opportunities emerge.