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Financial Summary

Investment Portfolios
The Community Foundation of Wabash County, (Community Foundation) maintains two investment portfolios to safeguard charitable assets-- the Endowment Investment Portfolio and the Intermediate Fund Portfolio.

 

ENDOWMENT INVESTEMENT PORTFOLIO:
The Investment Policy of the CFWC establishes the objectives and guidelines of the endowment portfolio. The investment objective of the endowment portfolio is to preserve the real purchasing power of the principal gift and provide a stream of income for spending, which grows at a rate equaling or exceeding the rate of inflation, in order to sustain the grantmaking capacity of the Foundation in accordance with the Foundation’s current Endowment Spending Policy.  Investment objectives will be achieved by maximizing total return consistent with prudent risk limits.  Reasonable consistency of return on an annual basis is important to assure the Foundation's capacity to sustain a level of operation that will provide for its continual growth. Accordingly, the funds are to be actively managed in a manner that will limit downside risk.  The asset allocation and investment requires adequate diversification in order to reduce volatility.  Investment instruments may include active fund managers and passive exchange traded funds in the following categories.


US Gov’t Bonds/Notes           Corporate Bonds                    Municipal Bonds
Inflation-protected Bonds      High Yield Bonds                    Non-US Gov’t Bonds
US Equities                           Non-US Equities                     Global Allocation Strategies
Hedged Strategies                Global/Flexible Strategies        Commodities
Precious Metals


New Endowment Fund Procedures    Donors, as founders of new funds in the Community Foundation, will be asked to complete a New Fund Administration Questionnaire, which provides important information about them and their wishes.  We seek to fully understand and document donors’ charitable desires regarding the administration of the endowment. The more we know, the better able we are to implement your intentions in perpetuity.


Grant Distribution from Endowments   The Community Foundation Endowment Spending Policy authorizes the calculations and procedures regarding grant distributions.  It is important to remember that only a portion of the total return is distributed. A distribution is called a grant.  To calculate the annual grant amount, on September 30th of each year, the Community Foundation compares the contributed and market values of each endowment and assigns a payout rate to the 12-quarter moving average of the endowment value.  The payout rate is established by the Investment Committee, and has been 4% for endowments whose market value exceeds contributed value, and 2% on endowments whose market value is less than its contributed value. The Investment Committee has occasionally reduced the payout in order to preserve principal.


Endowment beneficiaries can elect a distribution schedule appropriate for their operations.  Endowment beneficiaries may elect to retain annual payouts in the endowment.  Accumulated undistributed payouts are accounted for separately, but are retained in the endowment investment portfolio and are subject to market gains as well as losses.  Beneficiaries may elect to transfer accumulated payouts to the Intermediate Fund.


Grants from newly created endowments will commence not less than one year after creation.  Grants will not be distributed from endowment funds whose contributed value has not reached the minimum for that type of endowment.

 

Administrative Fees  The Community Foundation Fund Establishment and Administration Policy authorizes the administrative fee rate assessed on endowments.  Currently, the fee rate applied to endowments other than scholarships is .25%. This rate is applied quarterly to the endowment’s market value where the contributed value is less than $1 million.  The rate applied to scholarship endowments is 1.25% annually.

 

 

INTERMEDIATE FUND PORTFOLIO:
The investment objective of the intermediate portfolio is to provide a level of current income through investment grade and high yield short duration mortgage, corporate, government and asset backed securities.  The portfolio seeks to provide a middle ground between money market and higher yielding portfolios with longer duration, such as the Community Foundation endowment portfolio.  By focusing on short-term, high quality fixed income securities, these funds offer higher income potential than traditional cash and certificates of deposit, with modest additional risk.  The Intermediate fund value does fluctuate.  Returns are not guaranteed, nor are deposits insured. The fund has lower price volatility than longer-term bond funds due to the funds short duration. Current investment instruments include, but are not limited to:


Short Term Fixed Income                       Total Return Fixed Income

Multi-Sector Income                               Unconstrained Fixed Income

 

New Intermediate Fund Procedures  Donors, as founders of new funds in the Community Foundation, will be asked to complete a New Fund Administration Questionnaire, which provides important information about them and their wishes.  We seek to fully understand and document donors’ charitable desires regarding the administration of the fund. The more we know, the better able to implement your intentions.


Grant Distribution from the Intermediate Fund  Grants are distributed at the request of the donors. Grants from newly created Intermediate funds will commence not less than one year after creation.  Ninety-day notice is required for distribution. The 90-day notice is included in the 1 year investment period.


Administrative Fees  The Community Foundation Fund Establishment and Administration Policy authorizes the administrative fee rate assessed on non-permanent funds.  Currently, the fee rate applied to the Intermediate Fund other is .25%. This rate is applied quarterly to the fund’s market value.