INVESTMENT POOLS + STRATEGY
During 2020, capital markets experienced a sharp decline due to the COVID-19 pandemic and its adverse effects on economic activity. The Foundation has gone through multiple capital market corrections over the years. However, the COVID-19 related correction was one of the most extreme on record. In March, we observed stocks decline by 30 percent only to have them surpass record highs in August. Similarly bonds experienced volatility with investment grade corporate bonds decreasing only to recover after a brief period
The Foundation is a long-term investor with the Endowment Pool designed to generate returns over the long-term. The Endowment Pool’s portfolio is well diversified, with various asset classes that benefit in high growth, low growth, high inflation and low inflation periods. Prior to February of this year, we had experienced an 11-year period of high returns. We were not expecting this growth period to continue indefinitely and thus had the right asset allocation in place to weather the next downturn. As part of our long-term monitoring, we regularly review portfolio risk and ensure we balance meeting return objectives with manageable risk and enough liquidity to fund grants. CCF is honored to be your philanthropic partner. Thank you for your continued confidence during these uncertain times.
STEVEN J. COBB, Chief Financial Officer | ANABEL GIRON, Investments Director
INVESTMENT STRATEGY We and our donors seek to address the needs of today while upholding charitable legacies for generations to come, so we invest both for now and for the future. In partnership with our trusted advisors and experts, we seek long-term growth, and the prudent fiscal stewardship of our donors’ funds and legacies is our top priority.
We have honed our investment strategies over more than a century, and our four pools are each managed with individual objectives designed to align with the grantmaking horizon of our donors– from short-term grantmaking to the creation of a permanent endowment.
In addition, CCF’s Charitable Asset Management Partnership (ChAMP) provides a customized investment solution by providing donors whose pools meet certain criteria to recommend a registered investment advisor of their choosing to manage the assets of their Donor Advised Fund.
ENDOWMENT POOL ALLOCATION
The Endowment Pool is invested over an indefinite time horizon, achieving favorable long-term returns while also allowing for a reasonable level of short-term volatility. The fixed income allocation is comprised of credit assets, rate-sensitive assets and cash. The global equity allocation seeks diversification through investments in U.S. equities and non-U.S. equities as well as private equity. Real assets include both public and private investments in natural resources, infrastructure and real estate. Lastly, the hedge fund allocation is invested across multiple strategies.
POOLS + ASSETS
As of 6/30/20 (in thousands)
DESCRIPTION
OBJECTIVE
1
ENDOWMENT
POOL
Investment Assets:
$ 1,149,294
Seeks to achieve long-term growth, preserving the purchasing power of assets over an indefinite time horizon and providing a relatively predictable, stable stream of distributions that keep pace with inflation over time.
Invested for long-term appreciation across multiple asset classes. Our investment committee, investment staff and investment consultant oversee this pool.
2
SOCIAL IMPACT
ENDOWMENT POOL
Investment Assets:
$18,701
Aims to achieve long-term growth over an indefinite time horizon, but also adds rigorous environmental, social and governance (ESG) analysis as an additional mandate.
Invested in the Vanguard FTSE Social Index fund and Community Capital Management fund, two mutual funds with multiple social screens and a long-term objective.
3
CONSERVATIVE
BALANCED POOL
Investment Assets:
$33,338
Offers diversified exposure to investment-grade fixed income with maturities from 1-5 years and to the entire U.S. equity market for purposes of grantmaking over an intermediate horizon, generally 3-7 years.
Invested to seek moderate growth while providing the liquidity needed for grantmaking over the intermediate term. Management for this pool is provided by Vanguard.
4
CAPITAL
PRESERVATION POOL
Investment Assets:
$220,837
Endeavors to preserve principal, ensure liquidity and provide working funds for present and future needs through investment in high-quality, short-term fixed income and cash instruments.
Invested to meet the needs of funds with short-term objectives or goals. Structured to ensure maximum liquidity for grantmaking while also seeking to preserve principal. This pool is managed by our long-term partner City National Bank.
INVESTMENT PERFORMANCE
(for periods ending June 30)
| 1 YEAR | 3 YEAR | 5 YEAR | 10 YEAR | |
| Endowment Pool | 0.1% | 4.7% | 4.6% | 6.5% |
| 50% MSCI ACWI / 14% HFR FOF / 14% S&P Real Assets Index / 15% Barc Agg. / 7% Barc High Yield |
1.3% | 4.6% | 4.3% | 6.0% |
| Colonial Consulting & FAOG Community Foundation Survey |
0.8% | 4.3% | 4.7% | 7.2% |
| Social Impact Endowment Pool (inception date: 1/1/2004) |
9.8% | 8.4% | 7.4% | 8.8% |
| 65% S&P 500 / 35% BCAgg | 8.5% | 9.1% | 8.5% | 10.1% |
| Conservative Balanced Pool (inception date: 10/1/2013) |
5.0% | 5.3% | 4.8% | – |
| 30% CRSP U.S. Total Market Index / 70% Barclays U.S. 1-5 Year Government/Credit Float Adjusted Index |
6.3% | 5.7% | 5.0% | – |
| Capital Preservation Pool (inception date: 1/1/2002) |
1.9% | 1.8% | 1.2% | 0.7% |
| Bank of America ML 91-Day T-Bills | 1.6% | 1.7% | 1.2% | 0.6% |
