ipa/gift f inance and i nvestment d eep d ive d ay investment rfp panel n ovember 4, 2015

IPA/GIFT FINANCE AND INVESTMENT DEEP DIVE DAY

INVESTMENT RFP PANELNOVEMBER 4, 2015

SERVICE PROVIDERS, CUSTODIANS, COMPENSATION

Types of Providers Brokerage Firms Banks Registered Investment Advisors Mutual Fund Companies

Types of Service Models Non-Discretion Limited Discretion Full Discretion Is OCIO an additional choice?



Types of Products Cash, Bonds, Stocks Mutual Funds, ETFs, Index Funds, Sub-Advised Funds Hedge Funds, Private Equity, Other Illiquid Investments

Custody of Funds Local/Regional National Third Party



Fees and Compensation Advice Product Transactions Custody Direct vs. Indirect

Research, Recommendations and Resources Get to know SEC FORMs ADV Part I and Part II Understand when conflicts of interest are present http://www.adviserinfo.sec.gov/IAPD/Content/Search/

iapd_Search.aspx brokercheck.finra.org



The foundation makes payouts for grants and administrative fees from the earnings of the endowment funds each year. In order for the endowed assets to grow, the net total return must be enough for the annual payout needs plus inflation and real growth over time.

4.0% 4.0% 4.5% 4.5% 5.0% 5.0% Payout % for grantmaking

1.0% 1.5% 1.0% 1.5% 1.0% 1.5% Administrative fees

5.0% 5.5% 5.5% 6.0% 6.0% 6.5% Total PAYOUT %

2.0% 2.0% 2.0% 2.0% 2.0% 2.0% Inflation factor

0.5% 0.5% 0.5% 0.5% 0.5% 0.5% Real growth factor

7.5% 8.0% 8.0% 8.5% 8.5% 9.0% Ave. NET TOTAL RETURN desired


• Investment/spending policies use a trailing quarter average• Example 12 or 16 quarters • Levels out market fluctuations • Annual grant distributions are more consistent from year to year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 41455

-30.00%

-20.00%

-10.00%

0.00%

10.00%

20.00%

30.00%

1.40%

11.10%7.70%

20.20%17.60%

6.70%

1.60%

-4.30%

-9.30%

16.80%

7.00%

4.60%

9.70% 9.00%

-23.70%

21.00%

12.70%

0.77%

13.50%6.55%

Actual Investment Performance and Desired Return

Red Line = Desired return of 8.5% (2.0% admin fee + 4.0% target distribution rate + 2.5% inflation & growth)

IPA/GIFT FINANCE AND INVESTMENT DEEP DIVE DAYRFP PANEL

Bill BarnesPresident

Community Foundation of Madisonand Jefferson County

[email protected]

Cheryl CooperVice President, Charitable Services

Fifth Third [email protected]

Will ThorpeDirector of Business Development-Investment

StewardshipThe Mason Companies

[email protected]

Barb YoungPresident

Porter County Community [email protected]

William JarvisFacilitator

Executive DirectorCommonfund Institute

[email protected]

mailto:[email protected]





ipa/gift f inance and i nvestment d eep d ive d ay investment rfp panel n ovember 4, 2015

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