How do we invest our funds?
The Community Foundation of Harrisonburg & Rockingham County has more than 300 charitable funds, which combined total in excess of $70 million invested in a variety of investment vehicles and accounts. These charitable funds do not represent separate investment accounts but rather separate charitable components for which an individual sub-ledger is maintained by TCFHR. Currently about 40% of the funds are invested in a single investment pool, managed by two investment advisors. The majority of the remaining assets are invested accounts held by multiple financial advisors.
While subject to change with both growth in numbers and time, approximately 40% of the funds in the investment pool and 60% of the pooled investment dollars are endowed funds. Of course, these funds call for a particular set of investment strategies and parameters. The other 40% of the pooled investments are various donor advised and agency funds that have medium (3 to 5 year) investment terms with moderate risk parameters. Our investment policy provides additional detail related to our risk tolerance and target asset allocation ranges and benchmarks.
We believe strongly in our fiduciary role in the long-term stewardship of our investments, which are truly a community asset. To that end, we have assembled a group of highly qualified professionals on our Investment Committee to develop investment policies, monitor compliance with our investment policies and assess our financial status. The investment committee meets at least quarterly with our advisors to review investment returns in comparison with applicable benchmarks and our asset allocation strategy. Click here to view our current Investment Policy.
The Community Foundation of Harrisonburg & Rockingham County’s investment objectives are designed to provide a moderate level of current income and a moderate level of capital growth. We seek long-term principal growth while preserving capital by means of minimizing the risk of substantial loss in asset value through investment in a diversified portfolio of quality investment securities.
Our Investment Pool is fully diversified and actively managed.
The Community Foundation of Harrisonburg & Rockingham County has partnered with Graves Light Lenhart Private Wealth Management and Lantz & Gochenour Investment Group of Janney Montgomery Scott LLC. These advisors actively manage the pooled fund and are constantly monitoring it to ensure long-term financial growth, adequate liquidity and compliance with the investment objectives established by our Investment Committee.
American Funds provide another investment option.
The Community Foundation of Harrisonburg & Rockingham County recognizes the value of building relationships with local investment advisors and providing them an avenue to assist their clients in making charitable contributions to TCFHR. With this in mind, we have chosen the American Funds Portfolio Series funds to allow an investment advisor to continue to represent the clients’ funds even after they have donated them to us.
To be clear, the investment advisor remains the representative on the account, the account is owned by TCFHR, and the donor client does not retain any ownership interest. In addition, the investments in the fund are chosen at the discretion of our Investment Committee and must adhere to the investment policy.
The following portfolio series funds are eligible:
- American Funds Preservation Portfolio – The fund’s investment objective is to provide current income, consistent with preservation of capital.
- American Funds Moderate Growth and Income Portfolio – The fund’s investment objectives are to provide current income and long-term growth of capital and income.
Currently, TCFHR partners with the following investment advisors for management of its American Funds:
Sipe/Kiser Investment Group of Wells Fargo Advisors
We are more interested in the five-year return than the one-year market fluctuations. Investment performance is monitored monthly with formal reviews quarterly by our Investment Committee. Investment performance is measured against indices mutually agreed upon by The Community Foundation of Harrisonburg & Rockingham County and the investment managers.
Asset Allocation targeting and monitoring is an important part of our approach to investing. The Community Foundation has established approved targets as well as approved ranges for equities and fixed income. Allocations are monitored quarterly and adjusted as needed, when we see significant drifting from approved ranges or sense a need for change due to apparent long-term shifts in the financial marketplace itself.
Our Spending Policy has been carefully analyzed to ensure our endowments are secure now and last for many years to come. The Community Foundation of Harrisonburg & Rockingham County and its board members recognize the need to preserve the integrity of the principal of endowed funds, thereby preserving the long-term ability of the endowment to make annual distributions. The Endowed Funds Annual Distribution Policy take into consideration the fact that funds may have an increase or decrease in value that would in some years be less than or greater than the annual distribution amount. However, it is expected that over time the Distribution policy along with our overall Investment Policy will ensure the preservation of the principal of the fund including effects of inflation.
We will distribute 4% of the average value of the fund annually based on a 20-quarter moving average (or historic average if less than 20 quarters are available). Investment returns in excess of the annual distribution, administrative fees and investment fees shall be retained in the fund.