NCCF Board Chairman C. Ronald Scheeler on prudent portfolio management in turbulent financial markets
With “troubling economic news” and the stock market’s tumble dominating the press over the past year, donors and fund representatives are paying more attention to their endowments. The North Carolina Community Foundation is now receiving an increased volume of inquiries as to fund balance and the amount available to grant.
Our response is consistent. While we recognize that the current economic reports and financial market volatility are of concern, it is important to remain calm. We urge fund representatives to remove emotion from these short-term events − as difficult as that may be − and focus on the long-term perspective of philanthropic investing.
Charitable investing requires even more of a long-term perspective than personal investing – including that for retirement. The Foundation’s portfolio is structured to endure downturns in the market by employing a consistent, long-term and diverse asset allocation. Our investment policy, approved by the Foundation’s board of directors, sets the moderate allocation of 65 percent stock, 25 percent fixed income and 10 percent cash and alternative investments.
Fund representatives have also questioned the wisdom of continued granting during a declining financial market, and grantees have raised concerns over the availability of their annual grants. Consistent with the investment policy, the Foundation’s spending policy also takes a long-term approach. The 12-quarter available-to-grant calculation is designed to provide stable annual grant amounts while maintaining overall fund balance in the long run.
Now, as always, prudent portfolio management remains the wisest approach for enduring philanthropy in both turbulent and stable markets.
Please call on us if we may answer any questions or concerns you have.
