When you are a charity, one of the ways you need to ensure that you can stay up and running is making investments in ways in which you can employ the capital that you have accumulated through fundraising and other avenues.
You need to invest in people and thing when you are a charity, whether it is the personnel who can help run the charity and deal with foreign countries administration and transport authorities, or it is investing in certain types of foods and materials that will be used to help underprivileged people.
Don’t be overly risky
Whatever the case may be, you need to analyse carefully whether an investment is safe for you or is overly risky. Martin Chitwood is one of the leading securities class action litigators in the nation and has seen many charities and other organizations lose a lot of money over the years as they have not done their research and invested in things that were a lot riskier than they initially appeared to be on the surface. As a charity, your goal is to help people as best as you can, so to do this you will need to use your resources to the best of your ability.
Without further ado, here are some useful tips that will help you to determine whether an investment is overly risky or not.
Know which types of investments are safe and which are not
When it comes to investing, the greater the level of risk, the greater the level of reward there is for you to take advantage of. However, this is a double edged sword as the risks of losing your entire principal is also a lot greater than it would be.
As a charity, you should avoid at all costs making risky investments, as this will lose a lot of the money that has been hard earned through fundraising and could be going towards helping people survive and thrive. While no investments are going to be completely safe, over the years certain types of investments have shown to be very secure and a great way to invest your money.
You might not get very high returns and interest income on the investments, but you will know that the money is safe and the interest income will accumulate and compound over time. The safest types of investments will be certain government bonds and treasury bills.
Take accost of all of the associated risks
When it comes to making safe investments, there are a number of different risks that are going to be involved. Some investment opportunities may appear to be very safe on the surface, but once you dig a bit deeper you will discover that this is not entirely the case.
The three main types of risk you are going to be exposed to with any type of investment is the potential of losing your principal amount, a loss of purchasing power due to the effects of inflation and the risk that is associated with having your funds tied up and being illiquid.