The investment process is driven by a board-appointed Investment Committee, a group of dedicated volunteers with many years of collective experience in investment management. The Investment Committee oversees the management of assets of the foundation available for investment.

The committee works with Crewcial Partners LLC, a consulting firm specializing in endowments. The consultant provides expert guidance on asset allocation, manager selection, performing reporting, and other special projects as requested. Quarterly meetings are held with the Investment Committee and Crewcial Partners LLC where asset allocations, market, manager, and portfolio performance are reviewed.

Founded in 1980, Crewcial Partners is located in New York, N.Y. Their clients include some of the nation’s largest community foundations.

Together we grow the good is at the heart of Crewcial Partners. The firm’s leadership is a diverse team that actively pursues better results by building portfolios that capitalize on diversity by ethnicity, gender, age, and location. Their commitment to equity began eight years ago and has provided a front-row seat to the ongoing challenges and barriers to entry faced by diverse managers.

As a long-term investor, the following issues are significant factors in the prudent allocation of the foundation’s portfolio assets:

• In order to achieve a rate of return that will support the distribution policy while protecting the assets from inflation, the foundation must be willing to take some investment risk with respect to the endowment portfolio.
• The most effective way to establish an appropriate volatility level for the portfolio is through its asset allocation (i.e. stocks, bonds, cash).
• The foundation has adopted a strategic long-term asset allocation for the portfolio. Over time, the portfolio will remain invested in percentages that are fairly close to those called for in the strategic allocation.
• The foundation strongly believes in the long-term benefits of diversifying its portfolio into a number of different asset classes and investment strategies. While each asset class and strategy is carefully selected, the focus of the investment process is always on the overall portfolio.

Our objective is to preserve or enhance the real, inflation-adjusted purchasing power of the endowed funds while producing a relatively predictable and stable payout stream that is maximized over the long run. The foundation considers an endowment fund to be an institutional fund, or part thereof, that under the terms of a gift instrument is not wholly expendable by the foundation on a current basis.

The aim is to earn a sufficient long-term return to preserve the purchasing power of the assets, after withdrawals; and to earn this return with as little volatility as possible.

The long-term expected annual return should at least equal the sum of distributions, inflation, administrative costs, and management fees. Based on a current assumed inflation rate of 3% and median spending of 5%, the long-term objective for the portfolio is to earn a return of at least 8%. Given that this benchmark is not directly related to market performance, success or failure in achieving this goal should be evaluated over seven to ten years.

To better align non-endowed funds with related grantmaking objectives, the board has established four separate pools in which non-endowed funds may be invested: cash, capital preservation pool, income-oriented pool, and growth-oriented pool.

• Cash: Funds are invested in a money market account.
• Capital preservation pool: The purpose is to provide a high level of liquidity for the foundation to manage appropriately. The primary objective is to preserve the principal; therefore, the majority of assets are invested in very safe and liquid instruments.
• Income-oriented pool: The objective is to balance return with a moderate level of risk. The investment horizon is expected to be one to five years and therefore accepts some risk to gain higher returns. The performance objective is to earn a rate that exceeds a benchmark consisting of 67% fixed income and 33% equity.
• Growth-oriented pool: The purpose is to mimic the endowed pool as closely as possible, with the intention of maintaining assets in excess of five years. Donor intentions are long-term and willing to accept volatility associated with a fully diversified portfolio consisting of both equities and fixed income. The performance objective is to earn a rate that exceeds a benchmark consisting of 26% fixed income, 70% equity, and 4% alternatives.

In determining the amount of the fund to be spent, the foundation shall determine what is prudent for the uses, benefits, purposes, and duration for which the fund is established. The amount to be spent from an endowment fund each year is calculated within a range of 4.5% to 5.5% of the average of the fair market value of the fund over the previous 20 trailing quarters ending September 30 of the immediate prior year. The distribution amount is used for both the amount available to grant from each fund, as well as administrative fees charged to each fund. Amounts available to grant are calculated by subtracting the administrative fee from the total calculated distribution amount.

For new funds, distributions are available in the first fiscal year following the fund’s one-year anniversary and will be calculated within the range of 4.5% to 5.5% of the trailing average of the number of quarters the fund has been in existence until it reaches 20 quarters.

For funds with donor-imposed restrictions that limit distributions to interest and dividends, the valuation period is 12 months ending September 30 of the prior year.