Investment Policy

Long-term growth of capital shall be defined as achieving a 5% return net of the rate of inflation and the combined administrative/investment fees in order to grow the Foundation’s assets, as measured over a rolling five-year time horizon. This 5% net return target is derived from historical asset class returns and the asset class allocation adopted by the GHCF Investment Committee. The Foundation also seeks to exceed a weighted benchmark return based upon policy asset allocation targets and standard index returns over rolling five-year periods. GHCF recognizes that, because of overall market conditions, there may be certain periods of time that it may not achieve this performance goal. Risk management is an important element in the investment of Foundation assets. Short-term volatility will be tolerated inasmuch as it is consistent with the volatility of a comparable market index.

The responsibility of managing GHCF assets is vested in the Board of Directors through its Investment Committee. This Committee, which is comprised of board members and volunteer investment professionals, has established policies and benchmarks for the Foundation’s investment pool. This Committee meets at least quarterly and evaluates the performance of our investment managers against those policies and benchmarks. This Committee also rebalances the portfolio when asset class percentages change as provided in the investment policy.

GHCF currently employs an independent investment consultant, Jeffrey Slocum & Associates, to provide advice on the management, oversight, and administration of its portfolio. With Slocum’s assistance, the Investment Committee determines the portfolio’s risk tolerance and investment horizon, establishes asset allocation targets, selects and monitors the performance of individual managers, and establishes performance objectives and benchmarks for each manager. Solicitors for investment management services are referred to Slocum for consideration.

The current asset class allocation for the Community Foundation’s endowment is 65% Equities, 15% Fixed Income, 10% Absolute Return Strategy, 5% Real Assets and 5% Money Market. The Foundation decided on this allocation because it has a long-term (more than 10 years) time horizon for its funds. Donors whose time horizon is shorter than 10 years may want an asset allocation with a lower equity exposure. For example, if the donor anticipates making grants of most of their fund within the next 5 years, an increased cash allocation may be desirable. Donors who feel that the default target allocation of 75% investment in equities carries too much risk may wish to designate a lower percentage in equities that is more in line with their personal risk tolerance.

Our donors choose an investment allocation when they open their fund and are given the opportunity to change that allocation twice a year thereafter.

For additional information on GHCF’s investment policy and practices, a list of Investment Committee Members, and information on investment managers, please contact Bob Paddock at 713-333-2203.