The Foundation's cash os currently sitting in a checking account at Bank of America. I've googled for things like "brokerage accounts for non-profit" and figured that most or all deep discount brokers (Fidelity, Merrill, Etrade etc) allow opening accounts for non-profit organizations. Bank of America has a partnership with Merrill Edge, which I hadn't heard of before (likely a subsidiary of Merrill Lynch).
So, any suggestions on which brokerage would work best for the Foundation? TD Ameritrade would be the familiar choice for me. On the other hand, I'd be interested in trying something new. Thanks in advance for any insights! -- Andrei

On 18/09/2016 2:22 AM, Andrei Alexandrescu wrote:
> The Foundation's cash os currently sitting in a checking account at Bank
> of America. I've googled for things like "brokerage accounts for
> non-profit" and figured that most or all deep discount brokers
> (Fidelity, Merrill, Etrade etc) allow opening accounts for non-profit
> organizations. Bank of America has a partnership with Merrill Edge,
> which I hadn't heard of before (likely a subsidiary of Merrill Lynch).
> So, any suggestions on which brokerage would work best for the
> Foundation? TD Ameritrade would be the familiar choice for me. On the
> other hand, I'd be interested in trying something new. Thanks in advance
> for any insights! -- Andrei

From what I have read online about banks + USA, I would not trust all funds to a single bank, but really this should be a question to an accountant.

On Saturday, 17 September 2016 at 14:22:03 UTC, Andrei Alexandrescu wrote:
> The Foundation's cash os currently sitting in a checking account at Bank of America. I've googled for things like "brokerage accounts for non-profit" and figured that most or all deep discount brokers (Fidelity, Merrill, Etrade etc) allow opening accounts for non-profit organizations. Bank of America has a partnership with Merrill Edge, which I hadn't heard of before (likely a subsidiary of Merrill Lynch).
> So, any suggestions on which brokerage would work best for the Foundation? TD Ameritrade would be the familiar choice for me. On the other hand, I'd be interested in trying something new. Thanks in advance for any insights! -- Andrei

Ignorant here: Why would the foundation need a brokerage account?

On 9/17/16 11:31 AM, John Colvin wrote:
> Ignorant here: Why would the foundation need a brokerage account?

Companies (non-profits included) usually have some cash lying around. Some of that cash is needed for operational expenses (salaries, rents, utilities, bills etc) and for more rare expenses (such as DConf). (Our operational expenses are low, but we expect them to grow.) If there's more cash than necessary for the company to run for a few months, it makes sense to invest that cash in order to make more money from it, which returns back to the coffers of the company. -- Andrei

On 09/17/2016 12:41 PM, Andrei Alexandrescu wrote:
> On 9/17/16 11:31 AM, John Colvin wrote:
>> Ignorant here: Why would the foundation need a brokerage account?
>
> Companies (non-profits included) usually have some cash lying around.
> Some of that cash is needed for operational expenses (salaries, rents,
> utilities, bills etc) and for more rare expenses (such as DConf). (Our
> operational expenses are low, but we expect them to grow.) If there's
> more cash than necessary for the company to run for a few months, it
> makes sense to invest that cash in order to make more money from it,
> which returns back to the coffers of the company. -- Andrei
>

That's how I hear it worked in the 50's, but does anyone but the brokers ever gain any real interest from such accounts anymore? From everything I've ever seen and heard, they pretty much all now work such that basically all the earnings get scooped off the top by the banks/brokers themselves (who don't assume any of the risk themselves anymore) leaving the original investor with nothing more than their original invested amount. Brokers and managed accounts are turning into the new "savings" account anymore, you'd (literally) earn more annually just picking up the loose change you see in a parking lot.

On 09/17/2016 12:53 PM, Nick Sabalausky wrote:
> That's how I hear it worked in the 50's, but does anyone but the brokers
> ever gain any real interest from such accounts anymore? From everything
> I've ever seen and heard, they pretty much all now work such that
> basically all the earnings get scooped off the top by the banks/brokers
> themselves (who don't assume any of the risk themselves anymore) leaving
> the original investor with nothing more than their original invested
> amount. Brokers and managed accounts are turning into the new "savings"
> account anymore, you'd (literally) earn more annually just picking up
> the loose change you see in a parking lot.

Are you referring to full service brokers, money managers, investment advisors, and the such? We're not looking for such, only an online brokerage that allow us to do our own stocks/funds investments. -- Andrei

On 09/17/2016 12:58 PM, Andrei Alexandrescu wrote:
> On 09/17/2016 12:53 PM, Nick Sabalausky wrote:
>> That's how I hear it worked in the 50's, but does anyone but the brokers
>> ever gain any real interest from such accounts anymore? From everything
>> I've ever seen and heard, they pretty much all now work such that
>> basically all the earnings get scooped off the top by the banks/brokers
>> themselves (who don't assume any of the risk themselves anymore) leaving
>> the original investor with nothing more than their original invested
>> amount. Brokers and managed accounts are turning into the new "savings"
>> account anymore, you'd (literally) earn more annually just picking up
>> the loose change you see in a parking lot.
>
> Are you referring to full service brokers, money managers, investment
> advisors, and the such? We're not looking for such, only an online
> brokerage that allow us to do our own stocks/funds investments. -- Andrei
>

Ah, yes I was. Guess I misunderstood.

On Saturday, 17 September 2016 at 16:58:31 UTC, Andrei Alexandrescu wrote:
> On 09/17/2016 12:53 PM, Nick Sabalausky wrote:
>> That's how I hear it worked in the 50's, but does anyone but the brokers
>> ever gain any real interest from such accounts anymore? From everything
>> I've ever seen and heard, they pretty much all now work such that
>> basically all the earnings get scooped off the top by the banks/brokers
>> themselves (who don't assume any of the risk themselves anymore) leaving
>> the original investor with nothing more than their original invested
>> amount. Brokers and managed accounts are turning into the new "savings"
>> account anymore, you'd (literally) earn more annually just picking up
>> the loose change you see in a parking lot.
>
> Are you referring to full service brokers, money managers, investment advisors, and the such? We're not looking for such, only an online brokerage that allow us to do our own stocks/funds investments. -- Andrei

If you are actively trading I like Interactive Brokers.  I know u mentioned before about doing some day trading so they are also good for that.  If you looking for a more buy and hold strategy for the Foundation then I would just choose which one has lower cost ETFs and trade commissions.
https://www.interactivebrokers.com

On Sunday, 18 September 2016 at 01:04:16 UTC, dewitt wrote:
>
> If you are actively trading I like Interactive Brokers.  I know u mentioned before about doing some day trading so they are also good for that.  If you looking for a more buy and hold strategy for the Foundation then I would just choose which one has lower cost ETFs and trade commissions.
> https://www.interactivebrokers.com

I would have my accounts with them if my company allowed it, but really just for trading purposes. I'm not sure it would be the best thing for a non-profit that does not plan on trading much.

I would recommend they think first about their goals and what kind of portfolio they will have and then think about the brokerage that fits with their goals best. For instance, I have some accounts with Fidelity because they offer free ETF trading on a number of iShares accounts.

A commenter made a point about the amount of interest earned in banks. Indeed, bank deposits in the U.S. earn basically nothing. Of course, in other countries, short-term rates are below zero, potentially offering you even less. The key point I would emphasize is that you cannot earn a greater return without taking more risks. Online banks offering you a nice interest rate are investing in riskier debt.

I would again advise you to think about your investment objectives seriously. The reason why an organization like the Harvard endowment invests the way it does is because it basically has an infinite horizon. I don't think the D foundation is in that sort of place. If you have a shorter time horizon, then that has implications on how much risk you should be willing to take. That implies little to no exposure to equities/high yield bonds/etc.

Another commenter questioned putting all the money in a single US bank. Of course, there is a difference between having money in deposits vs. invested in mutual funds. Anyway, even if you keep the cash in deposits, the limit is $250,000 for FDIC insurance, so I wouldn't think about splitting things up between several banks until then. It might make sense to split up the money to a foreign bank if you could possibly have liabilities there.

On Saturday, 17 September 2016 at 14:22:03 UTC, Andrei Alexandrescu wrote:
> The Foundation's cash os currently sitting in a checking account at Bank of America. I've googled for things like "brokerage accounts for non-profit" and figured that most or all deep discount brokers (Fidelity, Merrill, Etrade etc) allow opening accounts for non-profit organizations. Bank of America has a partnership with Merrill Edge, which I hadn't heard of before (likely a subsidiary of Merrill Lynch).
> So, any suggestions on which brokerage would work best for the Foundation? TD Ameritrade would be the familiar choice for me. On the other hand, I'd be interested in trying something new. Thanks in advance for any insights! -- Andrei

As jmh530 pointed out, the time horizon is probably the most important parameter in an investment. If you can put the money aside for at least one year, I think you can make 1-2% a year without taking a lot of risk, e.g. by investing in investment-grade corporate bonds with short maturity.