Investment Policy Statement
Purpose & Scope
The Investment Policy Statement (IPS) was adopted by the Board of Directors of the Greater Green Bay Community Foundation to direct the prudent investment of the Foundation’s investment portfolio in a manner consistent with the investment objectives stated in the document. The Board has delegated oversight of the Portfolio to the Greater Green Bay Community Foundation Investment Committee.
This IPS, which applies to all assets, shall be used by the Committee in its duty to oversee Investment Managers and the Investment Consultant. The Committee has discretionary investment authority. This information will be reviewed annually by the Committee and revisions will be recommended to the Board.
While shorter-term investment results will be monitored, adherence to a sound long-term investment policy, which balances short-term distributions with preservation of the real, inflation-adjusted value of assets, is crucial to the long-term success of the Portfolio.
Investment Objective for Endowment Funds
An endowment fund is an investment fund created from gifts, bequest, or contributions and it is used to support specific causes. Donors may require that the principal remain intact into perpetuity, or for a defined period of time or until sufficient assets have been accumulated to achieve a designated purpose.
The primary investment objective of the Portfolio is to achieve an annualized total return (net of fees and expenses), through appreciation and income, equal to or greater than the rate of inflation (as measured by the broad, domestic Consumer Price Index) plus any spending thus, at a minimum, maintaining the purchasing power of the Portfolio. The assets are to be managed in a manner that will meet the primary investment objective, while at the same time attempting to limit volatility in year-to-year spending.
The Committee shall exercise prudence and appropriate care in accordance with the Uniform Prudent Investor Act (UPIA). UPIA requires fiduciaries to apply the standard of prudence “to any investment as part of the total portfolio, rather than to individual investments.”
The Committee manages the Portfolio as a prudent investor would, in light of the purposes, scope, objectives and other relevant circumstances, as well as exercising reasonable care, skill, and caution while being applied to investments of the portfolio as a whole and the overall investment strategy. The Committee has a duty to diversify the investments and perform to fundamental fiduciary duties of prudence, loyalty, and impartiality.
Spending Policy for Unrestricted, Field of Interest & Legacy Funds
The targeted spending amount for the Community Foundation is 5% of the previous twelve-quarter average of the Portfolio's market value, based on a June 30 anniversary date.
The Committee understands the long-term nature of the Community Foundation and believes that investing in assets with higher return expectations outweighs their short-term volatility risk. The majority of assets will be invested in equity or equity-like securities, including real estate (REITS). Commodities will be used primarily as an inflation hedge and for further diversification.
Fixed income and low volatility / absolute return strategies will be used to lower short-term volatility and provide stability. Cash is not a strategic asset of the Portfolio, but is a residual to the investment process and used to meet short-term liquidity needs.
Evaluation and Performance Measurement
The primary objective of the Portfolio is to achieve a Total Return Greater than Consumer Price Index + Spending Policy. The secondary objective is to achieve a total return in excess of the Peer Balanced Index.
Board of Directors
The Board has the ultimate fiduciary responsibility for the Portfolio by adopting appropriate policies governing the management of the Portfolio and assuring that these policies are effectively implemented.
Investment Oversight Committee
GGBCF Investment Team
- Reviews investment policy annually
- Evaluates and approves asset rebalance recommendations and investment manager changes
- Reviews quarterly and annual investment performance
- Employs Fund Evaluation Group (FEG) for investment consultant services
Current Investment Team Members
- Tom Olson, Chair
- Dan Gulling
- Terry Fulwiler
- Larry Lindsley
- Michael Meeuwsen
- Mike Simmer
- Mark Skogen
- Adrian Ulatowski
- Tim Weyenberg
- David L. Pamperin, GGBCF President & CEO
- Jon Kubick, GGBCF CFO
The investment committee is assisted by an experienced investment consulting firm called Fund Evaluation Group, LLC. (FEG) , which researches and performs due diligence, as does the Community Foundation, of over 1,000 fund managers annually. Our fund manager’s goal is to perform in the top 50% of peer universe over a 5-year period.
FEG presents the Community Foundation with quarterly investment performance results and recommendations, which the Investment Team approves. The Investment Team approves all changes.
Asset Allocation Strategy for Endowment Portfolio
- Key determinant of returns
- Diversification across multiple markets
- Globally diversified portfolio with uncorrelated returns from various assets
- Asset categories based on impact to the total portfolio
- Resist timing/Rely on the discipline the asset allocation model provides
- Utilize active and passive funds
- Rebalance funds as needed
Endowed Fund Asset Allocation Model (reviewed annually by Community Foundation's Investment Committee)
Global Fixed Income/Credit
Low Volatility/Diversifying Strategies
Cash & Cash Equivalents
Asset Allocation Graph - Endowed
Ending June 30, 2012
Investment Performance - Endowed
Ending June 30, 2012
Qtr YTD 1Yr 5Yr 10Yr
Total Composite -3.3% 6.3% -0.2% 0.8% 5.5%
Fiscal Year begins July 1.
Investment Options: Spend Down (Non-Endowed) Funds
In addition to the Endowed portfolio, the Community Foundation has a portfolio investment strategy for non-endowed funds. This strategy fits donor purposes that are short term in nature. Two asset allocation models are available for short-term intentions. Community Foundation staff can provide additional information about both spend-down asset allocation models.
- Investment Strategy: Intermediate Spend Down Asset Allocation Model
30% Equities and 70% Bonds and Fixed Income Securities
- Investment Strategy: Short Term Spend Down Asset Allocation Model
100% Government Securities and Fixed Income Securities