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Investment Opportunities For Non Profits Case Study

Case Study: Investment Philosophy and Strategy The David and Lucile Packard Foundation is one of the most active private non-profits in the United States. It is also among the wealthiest foundations in the United States as seen from how it has exhibited profound progress since it was started. It has excelled both in the accumulation of revenue assets and diversifying its activities. The foundation is a not for profit organization. This means that the organization’s sense of achievement is in funding firms, which make significant findings that can help to change the world to a better place. During formation, the foundation’s primary objective was to fund research in science and Engineering. Over the years, the foundation has increased its mandate by conservation of the financing efforts, population research and development, and communities (The David Lucile & Packard Foundation, 2017).

The organization achieves these goals through an outlined management structure. However, the organization also experiences various challenges in the course of their operations. It is clear that the organization provides charity contributions to research. It also funds individuals with the potential to pursue knowledge that can be used to promote scientific development and environmental conservation. Therefore, the foundation faces the primary challenge of identifying the reliability of its investments. Many individuals and companies apply for funding from the foundation. It is likely to waste numerous resources if it invests in the wrong people and companies (The David Lucile & Packard Foundation, 2017). The foundation, therefore, relies on its investment management practices to ensure that all its investments are in support of initiatives that are vital for sustainability and innovation. To achieve this, it is critical for the foundation to adopt an effective investment philosophy. They could use this philosophy to assess their investments, and determine whether the prospective outcomes reflect the objectives of the company. This paper will address the use of Fundamental analysis philosophy by the foundation to determine its investment practices.

Fundamental analysis is an investment philosophy that focuses on the stock and securities in which a company intends to invest. The philosophy advocates for a procedural strategy in the evaluation of investment options. It deduces that a company must first identify investment...

After the identification, it should assess the investment options to identify their intrinsic value. The intrinsic values of the investment option would help to determine the reliability of the investments (Qworter.com, 2012). Apparently, the foundation identifies most of its investment options through applications by individuals and companies requesting for funding. This philosophy provides the company with an appropriate strategy that could be used to determine worthy investments.
The fundamental analysis philosophy mainly focuses on the determination of the intrinsic value of investments. It addresses this by providing a list of factors that could help to determine this value. Fundamental analysis advocates for the assessment of the economic prospects of the investment option (Qworter.com, 2012). In this case, the foundation mostly deals with research companies and individuals who need funding for further education. The foundation should assess the economic stability of these research companies. The foundation mostly funds research firms that aim to expand the scope of their research. An economic analysis of these companies would enable the foundation to determine their validity. This will help the foundation to invest in stable companies that can use the fund to maintain and expand their activities. Unstable companies can collapse any time given poor management. This collapse could make the foundation to lose valuable resources. The fundamental analysis philosophy also advocates for the evaluation of the management of the investment options. Management is critical in every investment option. This is because management determines the outcomes of the invested resources. For instance, the management of research companies is critical in determining the usage of the grants offered by the foundation. Proper management can be reflected in appealing outcomes from previous activities. The poor management of funds that it provides for grants is a major challenge facing the foundation. There is no distinct method of determining the reliability of the companies and individuals where the foundation can invest.

In fundamental analysis, it is also crucial to evaluate the whether the investments meet the objectives of the foundation. The investments chosen by the foundation must reflect on its objectives (En.wikipedia.org, n.d). It is crucial because different companies and individuals…

Sources used in this document:

References

En.wikipedia.org (n.d). Stock Market. Retrieved from http://en.wikipedia.org/wiki/Stock_market

Damodaran, A. (n.d.). Investment philosophy: The secret ingredient in investment success. Retrieved from www.stern.nyu.edu/~adamodar/pdfiles/country/Brazilinvphil.ppt

Hiriyappa, B. (2008). Investment management. New Age International, Daryaganj, Delhi, IND

The David & Lucile Packard Foundation. (2017). Improving the lives of children, families, and communities—and restoring and protecting our planet. Official Website. Retrieved from https://www.packard.org

Qwoter.com (2012). six different investment philosophies. Retrieved from http://www.qwoter.com/college/Trading-Psychology/different-investment-philosophies.html

 


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