You remember the story of the tortoise and the hare, right?
In their race, the overly confident hare spends lots of time running around acting silly,
creating and giving into distractions, knowing there’s no way the slow tortoise could ever beat him. The fable’s ending, however, reveals a different truth.
I’m pleased to tell you that your Community Foundation of White County is more the
“slow and steady” sort.
When donors choose to invest in their community’s future through the community
foundation, we honor their commitment with sound investment and disbursement policies
designed to protect their investment for the long term…forever, actually.
CFWC now administers over 100 separate endowment funds created by donors who care
about this community and want to see it grow and thrive, through good times and bad. Through prudent investment policies, these funds will continue to generate annual disbursements to fulfill the donor’s original intent, even long after the donor has died.
Community foundation assets are managed by an astute finance committee at The
Community Foundation of Greater Lafayette (of which we are a grateful affiliate), together with a hired investment firm. A mixed portfolio of investments is designed to stay ahead of inflation, both protect and grow assets over the long-term, and provide for annual disbursements (grants) from donor funds. We do not invest in hedge funds or wildly speculative financial ventures. We are always mindful of our finances, but we do not allow distractions to pull us off course. We’re handling assets generously shared by our donors for benefit of the community, and we always will do everything we can do honor their trust.
Currently, the Foundation’s disbursement rate is 4.50% of a fund’s 3-year trailing
average. This long-term view means that, for example, a 2008-type plunge in the stock market – or the uncertainty now being caused by COVID-19 – doesn’t cancel disbursements from our funds. Though a fund’s 3-year average may go down, a sudden drop in the market does not cancel a fund’s available disbursement, as it could if we only used a 1-year basis.
Conversely, when the market goes way up, we don’t go crazy and increase the
disbursement rate just because there’s more money in the fund. The fund adds the positive
market earnings, increasing the 3-year trailing average base figure, which gradually increases the disbursement grant amount available from the fund.
And so it goes, year after year. Slow and steady. Always honoring our donor’s original
intent and managing their gift in a way that will continue its legacy 25 and 50 years from now.