Investments

Special Notice:

As the impact of COVID-19 changes everyday, The Foundation is monitoring the performance of the endowment which like all economic activity and markets has experienced declines. Although the value of the endowment and those we manage for others has been reduced, we remain confident in our long-term approach, our sub-advisors, and the diversified allocation model that mitigate situations like these.

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The Community Foundation for Greater New Haven is an organization designed to maintain Greater New Haven community’s philanthropic assets in perpetuity. Gifts placed into the endowment are invested, grants are distributed throughout the year, and long-term growth continues to enhance permanent community capital. Endowment management and fund stewardship are achieved through disciplined and integrated spending and investment policies. Investment performance is measured, assessed and reported monthly, both on a manager-by-manager basis and cumulatively, through an external third party.

The Community Foundation’s assets are valued at $615 Million as of February 2019. The assets are held either by The Foundation's Corporation, known as the The Community Foundation for Greater New Haven Inc. (The Corporation), or in trust by one of four trustee banks: Wells Fargo (represented by William T. Donahue), Bank of America (represented by Sandra Senich), Key Bank (represented by Jeff Hubbard) and People's United Bank. Donors determine whether their gifts will be held in a beneficial trust for The Community Foundation at one of the trustee banks, or within The Corporation.

Our record of financial management and investment returns is an important element of how we serve donors and nonprofits and grow the community’s charitable capital. For the year-end 2018, the annualized net investment return of The Corporation was (4.9%) compared to a market benchmark of (5.5%), Since 1995, the return has been 8.3% annualized net of the cost of investment management expenses, surpassing both its target benchmark and the performance of comparably-sized community foundations nationwide.

Investment Performance

Each document below shows a snapshot of the relative investment performance of The Corporation, including those endowments and funds managed for the Valley Community Foundation, and its three largest trustee banks, and includes each entity's market-driven investment performance benchmark as reported by Crewcial Partners, LLC.

Current Performance Reports:

Past investment performance reports are located here.

Performance in Relation to Peers

In addition to benchmarking its performance against market indices, The Corporation also compares its performance against its community foundation peers. The Corporation has consistently ranked among the top of its peer group since the inception of the national survey.

Administrative Fees

Administrative fees empower The Community Foundation to enhance the impact of philanthropy in Greater New Haven, drive community leadership and offer personalized service and local expertise. The following chart indicates the Administrative fees for component funds administered by The Community Foundation:

Type of Fund Minimum Fund Balance* Administrative Fees

Unrestricted, Preference & Designated

$10,000

1% annually of a fund's market value withdrawn quarterly

Donor Advised

$10,000

1% annually of a fund's market value withdrawn quarterly; for funds under $10,000, a minimum fee of $75 per quarter will apply unless the fund fits criteria of a Build-A-Fund

Scholarship

$25,000

If the scholarship requires application and review process, 1.5% annually of a fund's market value withdrawn quarterly; if a scholarship is designated to a single organization, then the designated fund minimum ($10,000) and fees apply (1%)

* Funds can be built to fund-minimum in recommended period of 3-5 years or other time period per written fund agreement. Administrative fees will not be assessed during the "building" period.

Gifts by credit card: The fund that receives a credit card gift will incur the transaction fee assessed by the credit card processing company; this fee does not reduce the deductibility of the contribution.

Investment Management and Spending Options:

The Community Foundation offers several investment options, depending on the type of fund.

  1. The Perpetual Fund

    The Perpetual Fund seeks to preserve the real economic spending power over the long-term. To meet this objective, a percentage of a fund's value is calculated according to a Spending Rule Policy annually and is available to make grant recommendations. An amount above the Spending Rule rate may be requested, subject to restrictions; contact The Foundation for details.

  2. The Intermediate Fund

    The Intermediate Fund is a diversified portfolio of more liquid assets that seeks to provide the opportunity for some appreciation with moderate risk. Assets are readily available for grantmaking at all times. This option is available only for Donor Advised Funds.

  3. Cash

    Investment Philosophy

    The Community Foundation for more than ninety years has been primarily an endowment organization designed to maintain the community’s charitable assets in perpetuity. Therefore, the investment management concepts and best practices contained within Connecticut law, such as the Uniform Prudent Management of Institutional Funds Act, and the Uniform Prudent Investors Act form the basis of our investment philosophy and strategy. Specifically: In order to preserve the purchasing power and real economic spending of the endowment, The Corporation shall manage its assets in the Perpetual Fund in accordance with a total-return approach, which does not distinguish between an asset’s yield and appreciation, but rather on the total expected return of the assets over the long-term. The Corporation includes those funds held by The Community Foundation’s affiliated entity, The Valley Community Foundation.

    The Community Foundation will withdraw a specific percentage of the market value from the endowment in accordance with a Spending Rule Policy, which is designed to prudently release a predictable stream of revenue during each fiscal year to meet the region’s charitable needs, while at the same time allowing for maximum flexibility and efficiency of the investment management process.

    In order to achieve the spending requirements and maintain the endowment’s purchasing power, the The Corporation operates in accordance with two policies: 1) The Spending Rule Policy and, 2) The Asset Allocation Policy.

    The Spending Rule Policy

    Generally, and in the absence of an institution’s desire to retain the right to withdraw principal from its organization fund, the process for extracting financial resources from the Perpetual Fund to meet the charitable needs of our community is accomplished through a Spending Rule Policy, which is defined as follows:

    A Spending Rate, which is determined annually by The Community Foundation's Board of Directors, equal to the greater of: a) Fixed percentage1 of the endowment assets available for investment based on a trailing five-year moving average; or b) Four and One-Quarter Percent (4.25%) (the “Floor”) of the market valuation of the endowment assets at the end of the most recent calendar quarter; provided however in no event shall The Community Foundation spend more than Five and Three Quarters' Percent (5.75%) (the “Cap”) of the market valuation of the endowment at the end of the most recent calendar quarter.

    1 The Spending Rate for 2020 is equal to Five and One-Half Percent (5.5%).

    With the cash option, the Fund is held in cash or cash-equivalent to preserve capital without risk or appreciation, and is readily available for grantmaking at all times.

Asset Allocation Policy

The Corporation'sa long-term asset allocation model1 is as follows:

Asset Class2 Target3 Operating Range Market Benchmark4
Equities

Global

47.5%

35% - 60%

MSCI All Country Word Index
Total Equities 47.5% 35% - 65%
Alternatives
Hedge Funds 25% 15% - 35% HFRI Fund of Funds Index
Private Assets 7.5% 0%- 15% CPI + 5%
Total Alternatives 32.5% 15% - 50%
Bonds
Global Sovereign 5.0% 2% - 8% CitiGroup World Government Bonds
Intermediate T.I.P.S. 5.0% 2% - 8% Barclays US TIPS 1-10 years
Emerging Markets 5.0% 2% - 8% JPM GBI-EM Global Diversified
US Treasuries 5.0% 2% - 8% Barclays Long Treasury
Total Bonds 20.0% 15% - 25%
Total Allocation 100%


a The Community Foundation for Greater New Haven, Inc. is a Connecticut Registered Investment Adviser
1 Approved unanimously by the Investment Committee of The Community Foundation's Corporation 26 February 2018.
2 Certified to be a true copy of the actions approved by The Community Foundation for Greater New Haven's Investment Committee and has not been amended, altered, and remains in effect.
3 Target weightings to be used to assess investment performance for Relative Benchmark, effective 1 April 2018.
4 Market benchmarks to be used to compute investment performance for the Relative Benchmark, effective 1 April 2018.

Asset Class Manager Strategy / Style
Global Equity Adage Capital Partners (2006) Large Cap
Global Equity Ashe (2014) Concentrated
Global Equity Health Care Investment Fund (2012) Concentrated
Global Equity Barker LP (2016) Concentrated
Global Equity Darlington Partners (2020) Concentrated
Global Equity Global Equity Ampfield (2020) Concentrated
Global Equity Artisan (2012) Large Cap
Global Equity Cevian Partners (2011) Large/Mid-Cap
Global Equity Effisimo (2015) Japan
Global Equity Highclere (2014) Emerging Markets
Global Equity Mondrian Partners (2010) Emerging Markets
Global Equity Tybourne Capital (2016) All-Cap
Global Equity Westwood (2015) Emerging Markets
Bonds Colchester Global (2008) Global Sovereign
Bonds Mondrian Partners (2010) Emerging Markets
Bonds I R & M (2010) TIPS
Bonds Vanguard (2010) Treasuries
Hedged Bayberry Capital (2019) L/S Equity
Hedged Canyon Value, Ltd. (2013) Credit
Hedged Hengistbury Investment Partners (2017) L/S Equity
Hedged Half-Sky (2017) L/S Equity
Hedged Kontiki Capital Management (2018) L/S Equity
Hedged Nitorum Capital (2016) L/S Equity
Hedged Permian Capital (2015) L/S Equity
Hedged Soapstone Capital (2018) L/S Equity
Hedged Tenzing Global (2020) L/S Equity
Private Assets 5AM (2018) Private Equity
Private Assets Altas Partners (2019) Private Equity
Private Assets Base 10 Ventures (2019) Private Equity
Private Assets Brookdale Investors (2019) Real Estate
Private Assets Denham (2012) Commodities
Private Assets GEM Realty Capital (2013) Real Estate
Private Assets Eightfold Capital (2016) Credit-CMBS
Private Assets Healthy Ventures (2017) Private Equity
Private Assets Juniper Capital (2016) Private Equity
Private Assets LBA Realty (2009) Real Estate
Private Assets Lakestar, Ltd. (2019) Private Equity
Private Assets Merit Energy (2011) Private Equity
Private Assets Metropolitan (2005) Real Estate
Private Assets Patron Capital Partners (2015) Real Estate
Private Assets Permit (2013) Private Equity
Private Assets Precursor Ventures (2018) Private Equity
Private Assets Raven Capital Management (2015) Private Equity
Private Assets Resource Land Holdings (2015) Private Equity
Private Assets Shorenstein Fund Nine (2008) Real Estate
Private Assets TIFF Partners (1999) Private Equity
Private Assets Varde (2008) Private Equity
Private Assets Warburg Pincus (2014) Private Equity

p>i A Connecticut registered investment adviser.

ii Approved by The Community Foundation's Investment Committee.

iiiAs of 9 September 2020.

Investment Management Performance Benchmarks & Assessment Process

The Corporation and The Community Foundation measure and assess its investment performance monthly, both manager-by-manager and cumulatively, through an external third party. All investment performance data, including holdings and transactions, is independently provided by each manager to The Community Foundation’s independent auditor and to Crewcial Partners LLC, a New York-based firm that provides evaluation and investment advisory services to more than seventy foundations and endowments nationally, including more than twenty community foundations. Investment performance for the Perpetual Fund is assessed against two benchmarks, as follows:

“Absolute”: The Absolute investment performance benchmark is equal to the Consumer Price Index plus effective Spending Rate.

“Relative”: The Relative investment performance benchmark is equal to fifty (50) basis points (0.5%) above the rate of return produced by specific market benchmarks, which represent the asset classes contained in the long-term asset allocation model, with such market benchmarks weighted in accordance with the model’s target allocation.

Investment Management Expense

The Corporation is a Connecticut registered investment adviser, and presents all investment performance information “net of expenses.” Net of expenses means net of the direct costs incurred in the operation of the Commingled Fund that holds the proprietary and organization funds’ endowment and endowment-like assets.

The Foundation’s FY18 (ending December 31st) externally-audited annual cost of Comingled Fund expenses was sixty-two points, or 0.62%, and allocated to every component and organization fund on a pro-rata basis.

Mission Related Investing

The Community Foundation for Greater New Haven, like most community foundations across the nation, is increasingly seeking additional methods to invest the charitable capital entrusted to it through mechanisms and structures other than direct grants or similar distributions to nonprofit organizations. Achieving positive social outcomes and community-level impact through the intentional use of financial assets in innovative business ventures, diverse entrepreneurs, and organizations that promote inclusive growth in our region to simultaneously achieve social and financial returns are commonly referred to as a Mission-related investing or Impact investing (together, “MRIs.”) MRIs may take the form of equity, debt, loan guarantees, or other familiar market products or instruments.

In 2017, The Community Foundation created a separate wholly owned and controlled subsidiary to focus solely and exclusively on the evaluation and execution of MRIs in the greater New Haven area, The Community Foundation Mission Investments Company (“TCF-MIC.”) TCF-MIC will perform the requisite due diligence and analyses to deploy the charitable financial assets for investments in local entities, organizations and business, through intermediaries and/or directly, such that an investment will be viewed from a return and mission-impact lens together.

For information about the MRI program, please email Jennifer Glover-Keller or A.F. Drew Alden.

Governance of Investment Process

The Community Foundation’s Board of Directors annually appoints an Investment Committee consisting of up to eight (8) members, not necessarily from the its own membership, which shall be responsible for complete oversight and implementation of the strategies, models and managers for the investment of the charitable assets entrusted to The Corporation. In concert with the professional staff, the Investment Committee may engage consultants as necessary or desirable to discharge its duties, and shall report such results, activities and actions to the Board of Directors, the donors and the general public via The Community Foundation’s website, at regular intervals.

Currently, the Investment Committee consists of four(4) current or former members of The Community Foundation’s Board of Directors and up to four (4) independent investment experts selected by the committee’s membership.

How can we help?

A.F. Drew Alden

Sr. Vice President for Investments & CFO for The Community Foundation (TCF); President & CEO, TCF-Mission Investments Company

203-777-7061

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