Investment Policy for Endowed Funds

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.