Private equity: Assessing its role in a nonprofit portfolio

Nonprofit organizations have long track records of allocating capital to private equity investments. The potential of returns higher than those of public market investments offers strong appeal to organizations balancing the need to exist in perpetuity with the support of spending goals. Private equity has found a place in many organizations’ portfolios, but it is vital that each committee assess the potential benefits and risks against its unique organizational profile. So where should an organization begin when assessing the role of private equity?