Finance and Investments
Managing the Endowment
The Community Foundation of Greater New Britain is the steward of a significant permanent endowment designed to benefit Berlin, New Britain, Plainville and Southington. A key goal of the Foundation is to manage the endowment to provide sufficient funds for current grants, while growing the endowment to ensure it will benefit our communities into the future. Long-term growth is accomplished through new gifts and careful stewardship of endowment funds. Our stewardship is based on a prudent and integrated investment and spending policy, designed to ensure predictable cash flows and guard against the ill effects of inflation.
Investment Strategy and Spending Policy
The Foundation manages all permanent assets under a common board-approved investment and spending policy. Responsibility for overseeing financial matters and monitoring investment performance rests with the Foundation’s finance committee, composed of seasoned professionals in the financial and investment world. Their goal is to preserve the endowment’s purchasing power by achieving long-term results that exceed the Foundation’s Spending Policy.
The Foundation’s investment strategy is a total return approach to endowment management. This approach seeks to provide a predictable, increasing amount for grant making while maintaining the endowment’s purchasing power. To achieve this strategy, the Foundation has implemented disciplined spending and investment policies. The Foundation’s spending policy for grants is 4% of the previous twenty quarters’ average market value as of December 31.
This “total return” approach to investments has proven to increase fund values over time and allow annual grant distributions. Use of a historical market average to calculate the annual amount to be spent serves to smooth the impact of fluctuating markets on grantmaking.
Asset Allocation
The Foundation’s asset allocation program calls for 60% equity, 25% fixed income and 15% Hedge allocation comprised of: 28% large cap equities, 13% small/mid cap equities, 16% developed international equities and 3% emerging market equities; 15% TIPS, 4% U.S. core fixed income, 3% high yield bonds and 3% emerging debt; and 15% Hedge Fund of Funds. This program is intended to provide returns over time that will both fund the spending rate and allow reinvestment into each individual fund.
The Foundation has engaged SEI Investments to manage the corporation assets and TD BankNorth to manage the trust assets. Investment manager performance is evaluated against market indices including the S&P 500 Index, Russell 2500 Index, Lehman 1-10 yr US Treasuries, Lehman US Aggregate Bond Index, MSCI EAFE Index, JPM EMBI Global Diversified, ML US High Yield Master II Index and MSCI Emerging Markets Index, ML Treasuries 91 Day.
For more information about the Foundation’s investments, please contact Joe Baker at 860.229.6018 x314.
Foundation's Form 990 and Financial Information
To obtain a copy of our Form 990 or audited financial statements, please contact Pat McNamara at 860.229.6018 x300.
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