How we invest your gift
The Community Foundation seeks to build a lasting and growing resource for our area through an endowment. The endowment is made up of nearly 200 separate named funds established with gifts from our donors. The Board’s policy is to treat the endowment as the Community Foundation’s main asset, and so to invest it to maintain real value and to support our operations and grant-making each year. We do not spend the capital of funds that are invested in our endowment unless, in the Board’s view, there is a genuinely exceptional reason for doing so. Donations to funds within the endowment cannot therefore be withdrawn for distribution.
The value of individual funds, and the revenue they accrue, is calculated by giving each one a ‘unit’ within our overall portfolio. Where a donor has given shares, we generally hold them at the donor’s request unless it is clearly in our interest to dispose of them. Gifts to the endowment fund of AIM shares or shares listed on other stock markets are credited to a separate donated account, and proceeds of the shares are credited to the main endowment fund when sold.
Effective management of our finances and assets is the overall responsibility of the Community Foundation’s Board of Trustees, with a particular role delegated to the Finance & Investment Sub-Committee. The Committee is chaired by the Treasurer, Colin Seccombe, supported by other Trustees with appropriate experience, currently John Clough, Alastair Conn, Gev Pringle and John Sands. Guy Readman sits as a co-optee on this Committee.
The Board appoints professional Investment Managers and monitors their performance. The appointment of Investment Managers is reviewed at least every three years. Our current Investment Managers are Investec Asset Management, UBS Wealth Management and Brewin Dolphin. Investment Managers are given discretionary powers to select investments within overall policies agreed with the Community Foundation. The Finance Investment Committee sets asset allocation ranges based on a typical allocation for charitable funds. This allows us to measure performance against a benchmark – the WM Charities Index.
The Community Foundation operates a total returns policy, meaning we set a level of cash to be withdrawn from the endowment each year from dividends and capital. The withdrawal level is reviewed regularly to ensure we are producing as much as possible for distribution whilst also maximising the long-term real value of the fund. The current withdrawal rate is set at 6% per annum calculated on quarter-end market values. However, donors may request that the Board reinvests some, or the entire amount withdrawn from their named fund for a period, rather than use it for grants.
There are no ethical restrictions on the main portfolio, but donors may elect to invest their funds in a separate ethical fund.
To download our investment policy click here.
