1. Investment Strategy Document
Purpose: To provide a comprehensive framework that guides investment decisions, ensuring they align with SayPro’s mission, vision, and long-term goals.
Key Elements:
- Investment Objectives: Defining the financial goals and the desired impact of investments (e.g., growth, sustainability, community impact).
- Investment Principles: Guidelines for ethical, socially responsible, and sustainable investing.
- Asset Allocation Strategy: Allocating investments across various asset classes such as stocks, bonds, real estate, and alternative investments to achieve diversification and minimize risk.
- Risk Tolerance: Outlining the committee’s risk profile and acceptable level of risk associated with investments.
- Time Horizon: Setting clear investment timelines (short, medium, and long-term) and expected returns.
2. Governance and Operational Framework
Purpose: To establish the structure, roles, and responsibilities of the members of the Investment Committee, ensuring clear accountability and decision-making processes.
Key Elements:
- Committee Structure: Clear description of roles, including Chairperson, Vice-Chairperson, Committee Members, Investment Strategist, Financial Analyst, Legal Advisor, Risk Management Officer, and Secretary.
- Decision-Making Process: The procedures for making investment decisions, including the need for consensus, voting, and approval thresholds.
- Frequency of Meetings: Guidelines for the regularity of committee meetings (e.g., quarterly, annually) to review performance and make new investment decisions.
- Committee Reporting: How and when the committee will report to the broader SayPro board and stakeholders, including the preparation of performance reports, quarterly updates, and investment summaries.
3. Investment Policy Document
Purpose: To define the set of rules and criteria the committee will follow to guide investments, ensuring consistency and transparency in decision-making.
Key Elements:
- Eligible Investment Types: Defining which types of investments are allowed (e.g., equity, fixed income, real estate, venture capital).
- Exclusion Criteria: Defining investments that are prohibited based on ethical considerations (e.g., no investment in fossil fuels, tobacco, or industries that conflict with SayPro’s mission).
- Due Diligence Process: The steps for evaluating investment opportunities, including background checks, financial analysis, and risk assessments.
- Performance Benchmarks: Setting benchmarks to assess the performance of investments (e.g., stock market indices, real estate returns).
- Liquidity Requirements: Defining acceptable liquidity levels for investments, ensuring SayPro has adequate cash flow for operations and emergencies.
4. Risk Management Framework
Purpose: To identify, assess, and mitigate potential risks associated with investments to protect SayPro’s financial health and ensure long-term success.
Key Elements:
- Risk Identification: Identifying the various types of risks involved in investment, including market risk, credit risk, liquidity risk, operational risk, and regulatory risk.
- Risk Assessment: Developing tools and methodologies to assess the likelihood and impact of each risk.
- Risk Mitigation Strategies: Strategies for minimizing risk exposure, such as diversification, insurance, hedging, and maintaining liquidity.
- Monitoring and Reporting: Establishing a process for continuously monitoring risks and reporting to the committee on risk status and mitigation efforts.
5. Performance Review and Evaluation Framework
Purpose: To monitor and evaluate the effectiveness of investments, ensuring they meet the expected financial returns and impact goals.
Key Elements:
- Performance Metrics: Key performance indicators (KPIs) to assess investment performance, such as return on investment (ROI), net asset value (NAV), and growth rate.
- Review Frequency: The frequency at which the committee will review the performance of investments (e.g., quarterly or annually).
- Performance Reports: The format and structure of investment performance reports, which will include financial results, trends, and recommendations for action.
- Action Plan for Underperformance: Steps to be taken if an investment does not meet expectations, including adjustments or divestment decisions.
6. Ethical Investment Guidelines
Purpose: To outline the ethical and social responsibility standards for investment decisions, ensuring that SayPro’s investments align with its values and commitment to sustainability.
Key Elements:
- Environmental, Social, and Governance (ESG) Criteria: Guidelines for selecting investments that meet high ESG standards, considering factors like environmental impact, social responsibility, and governance practices.
- Community Impact: Ensuring investments contribute positively to the communities SayPro serves, with a focus on economic, social, and environmental benefits.
- Transparency and Accountability: Emphasizing the need for transparency in all investment dealings and providing mechanisms for accountability to stakeholders.
7. Exit Strategy and Divestment Policy
Purpose: To establish clear guidelines for when and how investments will be exited or liquidated, ensuring alignment with SayPro’s strategic goals and market conditions.
Key Elements:
- Exit Triggers: Defining specific conditions under which investments will be exited, such as reaching a set return on investment, a market downturn, or a strategic shift in priorities.
- Divestment Process: The steps and procedures for divesting an investment, including communication with stakeholders, market timing, and financial considerations.
- Post-Exit Review: Reviewing the success of the exit and learning from each divestment to inform future investment decisions.