What is Our Approach to Investing?
The Community Foundation of the New River Valley recognizes stewardship of the assets entrusted to us as one of our most important responsibilities. Donor’s trust in us is based on our ability to invest these resources prudently and to use the income produced in accordance with donor’s charitable wishes, today and in the future.
The responsibility for managing the Community Foundation’s investment portfolio is vested in the Board of Directors through the Investment Committee. The investment committee is made up of staff and external volunteers who are knowledgeable in investment and financial matters. This committee works closely with the Community Foundation’s investment advisors and staff to set policy, establish performance benchmarks and continually monitor the effectiveness and diversification of the Community Foundation’s portfolio.
The Community Foundation of the New River Valley’s Investment Policy Statement establishes a clear understanding with its investment advisers as to the investment goals and objectives and management policies applicable to the Foundations’ investment portfolio. The policy creates the framework for a well-diversified asset mix that can be expected to generate acceptable long-term returns at a level of risk suitable to the foundation.
The Community Foundation works with four local financial advisors: Middleburg Financial at Atlantic Union Bank (formerly Union Bank & Trust), National Bank, Olio Financial Planning, and Wells Fargo Advisors. All funds at the Foundation are pooled, and each advisor invests a portion of that pool in accordance with an Investment Policy established by the Foundation’s Investment Committee. Donors interested in detailed information about annual investment returns and the Investment Policy are encouraged to request that information from the Foundation staff.
The Foundation’s Board of Directors reviews the overall performance of the investment pool each February and establishes the annual distribution percentage – the percentage that will be distributed from endowed funds that year. The Committee maintains a disciplined process, regardless of market fluctuations, to ensure the viability of the Community Foundation and the funds under its care. Typically the rate is between 3.5% and 4.5%, depending on the fund type. The percentage is applied to the average value of the fund over the previous 20 quarters to help control for fluctuations in the market. The rate is usually set at this level in order to preserve principal and ensure annual granting regardless of market performance. This approach has proven to be sound over time. The amount available from each specific fund is reflected in the Annual Fund Activity Report.
We seek consistent and competitive returns in order to fund the Foundation’s annual grant making and operating expenses, to preserve the asset base, and to enhance the asset base through capital appreciation. The Foundation currently invests about 65% of its assets in equities and about 35% in bonds and fixed income, so our pool fluctuates with performance in the market. We strive for relatively low risk, long-term growth investments, but like anyone else, some years are better than others. The Annual Fund Activity Report will list your investment earnings and the amount that will be distributed to the organization from your fund.
Donors make possible the Community Foundation and all its services to the community. The Foundation receives no government funding and relies on its family of donors to help fund the Foundation’s core services to the community. The Community Foundation charges an annual fee on each fund to support foundation services for the more than 160 component funds, managed by the foundation.
Annual Administrative Fee by Fund Type:
- Fund for the NRV or General Endowment: No Fee
- Designated and Field of Interest Funds: 1.0%
- Scholarship and Donor Advised Funds: 1.5%
Note: Funds above $1 million have a decreasing fee as value increases. Sliding Scale Fee Schedule.
Investment Management Fees:
<1%, assessed on investment pool
- Donor Education
- Due Diligence Research
- Investment management
- Annual audit
- Non-cash gift administration
- Grant program management
- Online giving capability
Community Capacity Building
- Professional development workshops for nonprofits
- One-on-One technical assistance to nonprofits
- Regional collaboration around community priorities
- Community needs research
- Nonprofit incubator development
Many individual donors, as well as the Community Foundation’s board members, also make annual pledges to support our administrative costs. You may wish to donate directly to the operating funds of the Foundation and thus facilitate our ongoing work of convening the community and supporting the growth of our area nonprofits.