Frequently Asked Financial Questions

Q. What is the minimum amount to establish a fund?

A. $10,000 for an individual. $50,000 for organizations establishing endowments.

Q. What is the investment return for funds at The Foundation?

A. Endowment Funds: in the balanced pool - 5 year annualized earnings of approximately 7.9%. Non-endowment Funds: Dependent upon the pool selected, returns will vary from money market to a return comparable to the Endowment Balanced Pool.

Past performance does not necessarily guarantee future results.

Q. What are the costs for funds at The Foundation?

A. Depending on the type of fund and the amount, initial Foundation Support ranges between .5% and 1.5% annually. Expenses (custodial services of bank, reporting and professional money managers) are also charged to a fund. These expenses range between .25% and 1%.

Q. How are endowment assets managed at The Foundation?

A. The Board of Governors appoints an Investment Committee.

• All endowment funds are managed in a balanced pool. The committee decides the portfolio mix - typically 65% equities, 35% fixed.
• The committee hires an investment consultant (Wurts & Associates) that performs a national search for professional money managers that excel in the various areas of the chosen mix.
• After review and discussion, the committee hires professional money managers and assigns endowment funds to those managers with the understanding that the assets will be invested in the area of that manager's specialty.
• The consultant monitors the performance of money managers, forwarding reports to the Investment Committee.

Q. How qualified are members of the Investment Committee?

A. Though volunteers, committee members are well experienced in the field of money management. For example, some of the current members of the committee have been:

• Robert Clelland, who heads his own investment company, Clelland and Associates.
• Fred Applegate, one of the co-founders of Nicholas Applegate.
• Louis Simpson, referred to by Warren Buffett as having "the ideal temperament for investing."

Q. What is the current policy on spending for Endowments?

A. It assumes a minimum target return of 9% annually.

• 5% is posted to the distributable portion of the fund.
• 4% is posted to the principal.

Q. What is the committee's investment philosophy for Endowments?

A. The committee seeks:

• Long-term total return
• At a reasonable level of risk
• With a protection of the corpus.

Q. How are Non-endowment funds managed?

A. Because liquidity is essential in these funds, a long-term investment philosophy is not possible. A fund advisor may recommend one of three investment options. This decision is based on the advisor's timeline for grantmaking. Options range from Pool A (money market) to Pool C (65% equity).

If you have additional questions, please contact us at 619-235-2300.