Optimizing operating cash: Effective liquidity management for Endowments & Foundations 

Short-term rates are higher than they’ve been in many years, but this may not always be the case. When developing a structure for your liquidity pool, it is important to understand your objectives, needs over time, and risk profile to achieve the best potential outcomes for your organization’s liquidity pools for an uncertain future.

We stress that liquidity pools are distinct from endowment pools and should have their own investment policy statements.

Download our latest paper as we explore what should be top of mind when assessing operating cash requirements, including asking these key questions:

• Are there cycles to the inflows and outflows?
• Have you accounted for any known atypical liquidity demands in the future?
• Are there any debt covenants or other institutional policies in place? If so, what are the primary operating and financial metrics to be considered?
• Do you have access to a committed line of credit that could reduce the need for cash? Similarly, for larger institutions, do you have an active commercial paper program?
• Do you have enough cash to weather a disruption?