Key Takeaways:
- An OCIO, or outsourced chief investment officer, manages a nonprofit or association’s investment portfolio and can also take on a broader advisory role, working with the board and finance committee from reserve planning through ongoing oversight.
- An investment manager generally focuses on how to invest the assets it is given, while an OCIO can also help decide how much to hold in reserve, what that money is for, and how it should be structured.
- An OCIO typically helps the board write the Investment Policy Statement it will invest under, then manages the portfolio(s) on a discretionary basis, making day-to-day decisions within that policy.
- Beyond managing the portfolio, an OCIO can support the board’s oversight with reporting, board education, and policy reviews, while the board keeps its fiduciary responsibility for approving policies, reviewing results, and managing the relationship.
- Because OCIO is a loosely defined term, services vary by firm, so it helps to ask each firm what its services include and confirm them in the advisory agreement.
Disclaimer: This article is for informational and educational purposes only and does not constitute investment, legal, or tax advice. The considerations described here reflect Raffa’s perspective as an investment advisor serving nonprofits and associations, and other advisors may weigh them differently. Raffa Investment Advisers is a registered investment adviser. Each organization’s financial situation is unique. Please consult with a qualified investment professional before making financial decisions.
An OCIO, or outsourced CIO, serves as a nonprofit or association’s outsourced chief investment officer, providing the expertise of an in-house investment function without adding a position to staff. While managing the investments is the foundation of the role, an OCIO can also help leadership with the decisions that shape it, such as defining what the organization’s reserves need to accomplish and how they should be structured, invested, and overseen. The board and finance committee retain final oversight, while the OCIO helps provide continuity as volunteer board and committee members rotate.
This article covers what an OCIO does, how it relates to discretionary investment management, and what to ask when evaluating one.
What Does an Outsourced Chief Investment Officer Do?
An outsourced chief investment officer manages the organization’s investment portfolio and works with the board and finance committee across the full investment program.
A more holistic OCIO relationship may include:
- Reserve adequacy and risk assessment: Evaluating the organization’s financial position, operating needs, cash flow requirements, risks, and opportunities to help set reserve targets, including how well the organization could withstand a financial disruption and continue its work. This includes weighing the organization’s risk capacity against the board’s risk tolerance to determine how much investment risk the reserves can take.
- Reserve strategy and structure: Helping leadership decide how reserves should be organized, often into distinct pools by purpose, liquidity needs, and time horizon, so it is clear which funds need to stay liquid, which are held for emergencies, and which can be invested for longer-term strategic objectives.
- Investment policy and portfolio management: Helping the board develop an Investment Policy Statement (IPS) that sets the objectives, risk parameters, target allocations and ranges, benchmarks, and permitted investments for the organization’s reserves. The IPS is generally reviewed with the board each year and whenever the organization’s circumstances change. Within that policy, the OCIO typically manages the investment portfolio on a discretionary basis, from asset allocation and investment selection to ongoing monitoring, rebalancing, and managing cash for planned withdrawals.
- Governance and fiduciary oversight: Supporting the board and finance committee with reporting measured against the IPS, periodic policy reviews, board education, and ongoing guidance on their investment-related fiduciary responsibilities.
- Institutional continuity: Documenting the organization’s investment philosophy, policies, and the reasoning behind key decisions, and helping new board and committee members get up to speed, so institutional knowledge is preserved as volunteer leadership rotates.
What Is the Board's Role in an OCIO Relationship?
In an OCIO relationship, the board’s role is oversight, and it keeps ultimate fiduciary responsibility for the organization’s reserves and investments. It approves the reserve policy and IPS, sets the organization’s objectives and risk parameters, reviews results and compliance with policies, and manages the relationship with the OCIO. A written advisory agreement defines the firm’s role, including how much authority it holds over investment decisions.
Is an OCIO the Same as Discretionary Investment Management?
An OCIO relationship typically includes discretionary investment management, but the OCIO role often covers considerably more than managing the portfolio alone. Discretionary authority allows the OCIO to make day-to-day investment decisions within the board’s Investment Policy Statement without seeking approval for each one. Discretionary management generally starts with how to invest a given set of assets, while a broader OCIO approach starts with how much the organization should hold in reserves, what those reserves should accomplish, and how they should be structured, invested, and overseen over time.
Our article on discretionary and non-discretionary investment management explains how each approach affects the committee’s role.
What Should a Board Ask When Evaluating an Outsourced CIO?
When evaluating an outsourced CIO, a board or committee should consider asking each firm about its services and fees, and then confirm the answers in the advisory agreement. The questions will depend on the scope of services your organization is looking for, but they may include:
- How does the firm assess how much the organization should hold in reserves, and how does it help the board decide how those reserves are structured?
- What is the firm’s process for helping the board develop or update the IPS, and how does it support ongoing policy reviews?
- Does the firm offer portfolio management on a discretionary basis?
- What does the firm’s reporting include, and how often does it review results against the IPS with the committee?
- Does the firm provide board education sessions, and if so, on what topics? Does it also offer education to help new committee members get up to speed?
- Does the firm act as a fiduciary for all of the services it provides?
- How are fees calculated, which services do they cover, and are any services charged separately?
- What other services does the firm offer, and which are included in the fee?
For a more formal search, a committee can include these questions in a request for proposal (RFP).
Download a Sample Investment Advisory Services RFP
A request for proposal gives your committee a documented, side-by-side view of how each outsourced CIO would approach your reserves, your investment policy, and the services its fee covers. Our sample RFPs, created specifically for nonprofits and associations, are fully editable to fit your organization’s needs and objectives.
How Raffa Can Help
At Raffa Investment Advisers, we provide investment management for nonprofits and associations, the organizations our firm was purpose-built to serve. In an OCIO or Outsourced CIO role, we partner with your board and finance committee to keep investment decisions connected to your organization’s financial position and long-term objectives. Our OCIO approach treats reserve strategy, investment policy, and portfolio management as one coordinated program, overseen by your board and supported by a dedicated advisory team.
Schedule a meeting with our team of advisors experienced in partnering with nonprofits and associations as an Outsourced Chief Investment Officer.
Frequently Asked Questions Related to Outsourced CIOs or OCIOs
What Does OCIO Mean?
OCIO stands for outsourced chief investment officer, sometimes also shortened to outsourced CIO. In nonprofit and institutional investing, the OCIO model generally involves an outside firm that manages an organization’s investments and takes on some or all of the broader role a chief investment officer would hold on staff, from reserve strategy through oversight. The term is unrelated to an outsourced chief information officer, a technology role that shares the CIO abbreviation.
Is an Outsourced Chief Investment Officer a Fiduciary?
An Outsourced Chief Investment Officer (OCIO) that is a registered investment advisor is a fiduciary. As the SEC’s investor education site, Investor.gov, explains, investment advisers are required to act in your best interest and not put their interest ahead of yours1. Because not every firm that offers investment services is a registered investment advisor, it helps to confirm each firm’s registration and fiduciary status in writing. Additionally, the board keeps its own fiduciary responsibility, which includes selecting and monitoring the firm and approving the policies it works within.
How Are Outsourced CIO Fees Structured?
Outsourced CIO fees can be structured in several ways, and the services each fee covers may vary by firm. Some firms include their full range of OCIO services in one fee, often charged as an annual percentage of the assets they manage, while others may charge additional fees for services beyond investment management. When comparing firms, it is important to understand what each fee includes, since two fees that look similar may cover different services.
Can Smaller Nonprofits and Associations Use an OCIO?
Smaller and mid-sized nonprofits and associations can choose to hire an OCIO, since the approach is not limited to large institutions or portfolios. Often, the more important question is whether the organization is ready to move reserves from cash into a long-term portfolio, which generally depends on how long the funds can stay invested and what they are meant to support. For organizations ready to invest, OCIO services may be available as part of the investment advisory relationship, provided their reserves meet the firm’s minimum account size.
About the Author
Ryan Frydenlund, CIMA®, CIPM
Director of Operations & Strategic Adviser
Ryan Frydenlund is the Director of Operations and a Strategic Adviser at Raffa Investment Advisers. Through his role, he advises clients on a broad range of complex topics related to their reserve structure and investment strategy. As an active member in the nonprofit and association community, Ryan has contributed educational content through organizations and outlets such as the American Society of Association Executives (ASAE), the Colorado Society of Association Executives (CSAE), National Council of Nonprofits, UST Education, Association TRENDS, Association Forum, Association Societies Alliance, and others. Additionally, Ryan currently serves as Co-Chair of the Programming and Education Committee for the Colorado Society of Association Executives (CSAE).
¹ Source: U.S. Securities and Exchange Commission, “Investment Advisers,” Investor.gov, https://www.investor.gov/introduction-investing/getting-started/working-investment-professional/investment-advisers (accessed November 3, 2026).
Disclosures:
Portions of this article were drafted with the assistance of AI tools and reviewed by Raffa Investment Advisers staff for accuracy and compliance.
Raffa Investment Advisers is a registered investment adviser with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training.
All investments involve risk, including the possible loss of principal. Past performance is not indicative of future results. Diversification does not protect against loss in declining markets.
References to fiduciary obligations are general and educational. Laws vary by state and change over time, and organizations should consult legal counsel about how they apply to their circumstances.
The scope of each OCIO relationship, including the level of discretionary authority, is defined in a written advisory agreement.
Indexes are unmanaged and cannot be invested in directly. References to benchmarks are illustrative and are not recommendations.
This article is for informational purposes only and should not be construed as personalized investment advice.