9.2 Long-Term Investment Policy and Guidelines

1. Investment Objective

The Foundation’s investment objective is to preserve its purchasing power while providing a continuing and stable funding source to support the current and future mission of the Foundation.To accomplish this objective, the LT Fund seeks to generate a total return that will exceed all expenses associated with managing the LT Fund and the eroding effects of inflation, at least 5% + CPI, over the long term. It is the intention that all total return (interest income, dividends, realized gains, and unrealized gains) above and beyond the amount approved for expenditure or distribution will be reinvested in the LT Fund.  The LT Fund will be managed on a total return basis, consistent with the applicable standard of conduct set forth in the Uniform Prudent Management of Institutional Funds Act (UPMIFA).

2. Asset Allocation

To achieve its investment objective, the LT Fund will allocate across asset classes consistent with its investment objective.  Other asset classes may be added to the LT Fund in an effort to enhance returns, reduce volatility through diversification, and/or offer a broader investment opportunity set.

The following asset allocation policy has been established.  The expectation is that this policy will provide the highest probability over time of meeting or exceeding the LT Fund’s objectives, while avoiding excessive risk.

Asset Class Policy Target Policy Range
Long Only Public Equity 45.0 30.0 – 60.0
Fixed Income 10.0 0.0 – 20.0
Private Equity 25.0 10.0 – 40.0
Flexible Capital 15.0 10.0 – 20.0
Inflation Hedging 5.0 5.0 – 10.0
Cash 0.0 0.0 – 10.0

Investment return for long-term investments is allocated monthly, based on the ratio of the average balances of each fund to the total funds available for investment.

3. Spending Guideline

Annual spending for the Pool is determined on a calendar year basis.  See Policy 7.3 Spending Policy for more details.

4. Gift Policy

The Foundation may receive gifts in the form of marketable securities.  In such event, Investment Staff will liquidate the securities as soon as possible.  In the event that the securities are restricted from sale for a designated period of time, the Foundation will hold said securities until the restricted period has elapsed and then liquidate the securities as soon as possible thereafter.  The Foundation will make no attempt to add value to the LT Fund by holding gifted securities unless specifically instructed to do so by the donor.

Last Updated on August 7, 2023