Statement for The Grace Foundation, Created February, 2015
Brokerage: Charles Schwab – Long-term Investments
Bank: US Bank Checking – Short-term Investments
The primary return objective is inflation-adjusted capital appreciation. Benchmark for large cap equities will be the S&P 500 index, benchmark for small/mid cap equities will be the Russell 2000 index, benchmark for international equities will be the MSCI EAFE index, benchmark for fixed income will be the Lehman Brothers Aggregate Bond index, and the benchmark for real estate will be the Wilshire REIT index.
No more than thirty percent (30%) of all investments will be in insured accounts or U.S. Government obligations with guaranteed interest rates. No more than seventy percent (70%) of all Foundation investments to be invested in accounts without guaranteed interest rates where the principal of the investment is at risk.” To minimize portfolio risk the money invested where the principal is at risk should be diversified across the following asset classes: large cap, small cap, international, fixed income and real estate.
Allocation of Gifts Received:
The following allocation formula will apply to all incoming revenue, pledges and gifts received:
20% Partner schools
70% Long-term investment
All monies held for administrative and partner schools shall be held in a cash account.
Any money that is needed in less than 5 years should not be invested such that the principal is at risk.
The Grace Foundation is a non-profit organization and is tax-exempt.
Unique Preferences and Circumstances:
Investments shall be made following a passive index based approach using no-load mutual funds or exchange traded funds. The portfolio should be reviewed at least annually and rebalanced, if necessary, to stay within the target allocation described below. Deviations greater than 5% require rebalancing. Any new large addition over $50,000 to the portfolio should be invested gradually. Underspent Administrative funds are to be reallocated at year-end at the Board’s discretion.
Target Asset Allocation – Long-term Investments
Large Cap = 30-40%
Small Cap = 20-30%
International = 10-20%
Real Estate = 0-10%
Fixed Income = 0-10%
Investment Committee: The Grace Foundation Board of Directors