For nonprofit organizations managing endowments or overseeing investment strategies, the term “private investments” has likely come up in conversations around growth, diversification, and impact. But what do private investments really mean for your organization’s mission—and why should they matter?

Private investments are funds allocated to businesses, projects, or assets that operate outside of the public stock market. Unlike public investments, which are traded on exchanges like the NYSE or NASDAQ, private investments are not as liquid and typically require a longer time horizon. Despite these differences, they offer significant advantages for nonprofits, including the potential for higher returns, stronger alignment with your mission, and added stability within your portfolio.

One surprising fact about private investments is just how vast the opportunities are. In the United States, there are only about 4,300 publicly traded companies. In contrast, there are over 27 million private businesses. This means the overwhelming majority of opportunities for growth and meaningful impact exist in the private market, not in the stock exchange.

Types of Private Investments for Nonprofits

There are several types of private investments that nonprofit organizations can leverage to diversify their portfolios and advance their missions. Here are three key categories to consider:

Private Equity

Private equity involves investing in established businesses to support their growth, restructuring, or expansion. These investments often involve taking an ownership stake in a company, allowing investors to influence operations and strategic direction. For nonprofits, private equity can be a powerful tool to achieve higher returns while supporting businesses that align with their mission and values.

Private Credit

Private credit refers to lending opportunities outside traditional banking channels, offering flexible financing solutions for businesses that might not qualify for conventional loans. Nonprofits investing in private credit can benefit from higher returns compared to traditional bonds while supporting businesses that need capital to grow or restructure. This type of investment also provides consistent income through interest payments.

Real Assets

Real assets include tangible investments such as real estate, infrastructure, and sustainable energy projects. These investments often provide long-term value and offer a hedge against inflation. For nonprofits, investing in real assets can directly contribute to social good—whether through affordable housing initiatives, renewable energy projects, or community infrastructure improvements.

The Importance of Due Diligence

However, entering private markets requires careful consideration, and due diligence is the most critical step in the process. Unlike public markets, private investments do not offer the same level of transparency or regulatory oversight. There are no quarterly earnings reports or mandated disclosures. It’s up to the investor to conduct thorough evaluations of financial health, operational performance, and leadership quality. Skipping or rushing due diligence can expose organizations to unnecessary risks and potentially misaligned investments.

At Zenith Wealth Partners, we approach private investments through four essential pillars of due diligence: mission alignment, financial viability, risk assessment, and social impact. Before any investment is made, we ask a series of important questions: Does this opportunity align with the organization’s broader mission and values? Can it provide sustainable returns that support long-term goals? What are the potential risks associated with the investment? And finally, will this investment drive meaningful social impact for the communities the organization serves?

Unlocking Your Nonprofit’s Potential

Incorporating private investments into a nonprofit’s portfolio isn’t just about enhancing returns—it’s about making strategic decisions that fuel the organization’s mission while strengthening financial resilience. In volatile market environments, private investments can also help stabilize a portfolio by providing diversification that moves independently of the public markets.

If your organization is ready to explore how private investments can unlock new opportunities for growth and mission impact, we’re here to help. Reach out to our team at Zenith Wealth Partners, and let’s discuss how we can help you build a portfolio that’s not only financially sound but also aligned with the values and vision that drive your work forward.

– Andrew Tudor, CAP, CFP

All written content is for information purposes only. Opinions expressed herein are solely those of Zenith, unless otherwise specifically cited. Material presented is believed to be from reliable sources and no representations are made by our firm as to another parties’ informational accuracy or completeness. All information or ideas provided should be discussed in detail with an advisor, accountant or legal counsel prior to implementation.