In today’s increasingly complex investment landscape, nonprofit organizations face growing pressure to steward capital responsibly while advancing their missions. Yet many investment committees are composed of volunteers who typically meet just a few hours each quarter. Under this governance model, managing a multi-asset portfolio effectively can be a significant challenge.

Further complicating matters are volatile markets, changing government policies, increasingly sophisticated investment products, rising operational demands, and heightened expectations from boards and donors. As a result, many nonprofits are reexamining their investment management approaches.

A strategic solution

To address these challenges, some organizations are turning to Outsourced Chief Investment Officer (OCIO) partnerships. This model outsources investment programs to institutional providers that operate with discretion, enabling nonprofits to focus on mission-driven work while benefiting from professional portfolio management. According to Cerulli Associates’ “U.S. Outsourced Chief Investment Officer Function 2025” report, more than one-third of total endowment assets (35%) were managed by an OCIO as of year-end 2024; total assets managed by OCIOs are expected to grow 11.3% annually over the next five years.

Why outsource?

The increasingly sophisticated nature of global financial markets demands experienced professionals with a dedicated focus on investing. At the same time, the proportion of nonprofit portfolios allocated to alternative asset classes like private capital has grown significantly in recent years, leaving many organizations without the resources to manage these complex strategies effectively. According to data from the National Association of College and University Business Officers (NACUBO), average allocations to private capital have increased by 44% since 2019.

Sources: 2024 NACUBO-Commonfund Study of Endowments and 2019-2023 NACUBO-TIAA Study of Endowments. Data is as of June 30 for each year. NACUBO data contained herein is sourced from The National Association of College and University Business Officers (“NACUBO”), a leading source of information for campus business and finance professionals. Cerity Partners OCIO is a corporate partner member of NACUBO and sponsors certain NACUBO events. Certain CP OCIO clients may have participated in the referenced studies.

Expertise and access

By partnering with an OCIO, nonprofits gain access to specialized investment expertise. Alternative asset classes—such as private equity, venture capital, and hedge funds—require deep experience, strong networks, and rigorous due diligence.

An OCIO can provide improved access to niche managers and direct deals like coinvestments. A seasoned OCIO brings industry relationships and scale that can often unlock access to unique investment opportunities and capacity-constrained strategies. According to Cerulli Associates’ report, up to 37% of asset owners cited access to alternative investments as a key reason for engaging an OCIO.

Operational resources

While investment committee members spend limited time overseeing the portfolio, staff often bear the burden of managing day-to-day operations. Smaller organizations in particular may lack the infrastructure or dedicated personnel to handle complex investment portfolios, the associated legal requirements, and operational logistics.

OCIOs can alleviate much of this administrative load by managing tasks such as trade execution, portfolio rebalancing, tax reporting, and compliance. This allows internal staff to redirect their focus toward advancing the organization’s mission rather than navigating the intricacies of investment operations. OCIOs may also offer value-added services beyond portfolio management, including support for fundraising and donor relations, audit and tax support, educational initiatives, and strategic financial planning.

Source: Chief Investment Officer, “2024 Outsourced Chief Investment Officer Survey.”

Risk management

With rapid market shifts and an increasingly complex regulatory environment, nonprofits are placing greater emphasis on comprehensive risk management. An OCIO can help mitigate investment, legal, and operational risks related to the portfolio through dedicated resources and robust due diligence processes.

A well-resourced OCIO typically employs advanced risk management techniques, including ongoing beta assessments, stress testing, and continuous portfolio monitoring. Given that OCIOs can operate with full discretion, they are equipped to make timely, tactical adjustments in response to market conditions. OCIOs can also run simulations to evaluate portfolio resilience under various scenarios—such as market downturns, increased spending needs, or accelerated capital calls—helping evaluate liquidity and long-term sustainability.

By providing disciplined and proactive risk management, OCIOs help reduce fiduciary pressure on investment committees while reinforcing sound financial stewardship to donors.

Cost efficiency

In an environment where transparency and cost-effectiveness are paramount, demonstrating prudent management of endowment funds is essential. OCIOs typically manage large asset pools across multiple clients, helping them to negotiate lower fees with investment managers and access investment vehicles that may be unavailable to other investors. By assuming many administrative responsibilities, OCIOs can also reduce internal workload and potentially lower overhead costs. Enhanced investment capabilities and risk management may also lead to better risk-adjusted returns, delivering meaningful financial impact over the long term.

While no two nonprofits are alike, many share a common goal: to ensure their assets are managed wisely and aligned with long-term objectives. Whether driven by a desire for improved investment outcomes, operational resources, risk management, or cost efficiency, nonprofits are increasingly embracing the OCIO model as a strategic solution.

Cerity Partners OCIO offers customized outsourced chief investment officer solutions to endowments, foundations, and family offices. We have significant experience partnering with mission-driven organizations for over 15 years. Learn more about how our solutions can help you.

Cerity Partners LLC (“Cerity Partners”) is an SEC-registered investment adviser with office locations throughout the United States. Registration of an Investment Advisor does not imply any level of skill or training. OCIO assets are managed by Cerity Partners OCIO LLC (“Cerity Partners OCIO”), a wholly owned subsidiary of Cerity Partners.

The information presented is limited to general information pertaining to Cerity Partners’ services, views, outlooks, and opinions and is for informational purposes only. Information is presented for illustrative purposes only and does not constitute an exhaustive explanation of relevant considerations when evaluating an OCIO provider. The information contained herein should not be construed as investment, tax, legal or fiduciary advice. There is no guarantee that the views and opinions expressed will come to pass. Before making any decision or taking any action that may affect your finances or your company’s finances, you should consult a qualified professional adviser. The information presented is subject to change without notice and is deemed reliable but is not guaranteed.

Investing involves risk, including the possible loss of principal and fluctuation of value. There is no assurance objectives will be met. Alternative investments can be speculative and may not be suitable for all investors.

Certain information is based on or derived from independent third-party sources that, in certain cases, may not have been updated through the date of this information. While such information is believed to be reliable for the purposes used herein, Cerity Partners has not independently verified the assumptions on which such information is based nor assumes any responsibility for the accuracy or completeness of such information.

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