The High Point Community Foundation is a public foundation established to serve the unmet needs of the greater High Point Community. Because the Foundation will operate in perpetuity for benevolent purposes, wise stewardship of the funds entrusted to it is essential to the Foundation's mission.
The Investment Committee of the High Point Community Foundation, under the direction of the Board of Trustees, is responsible for the management of the Foundation's financial assets. To ensure its accountability to donors, beneficiaries and the community, the Investment Committee provides oversight and adheres to the following practices:
I - GENERAL INVESTMENT OBJECTIVES
The Investment objective is to achieve a total return including appreciation, which will satisfy the current financial needs of the various funds and protect their long-term, inflation adjusted, principal value.
II - ESTABLISHMENT OF INVESTMENT MANAGERS
Based on evaluation by and recommendation of the Investment Committee and the approval of the Board of Trustees, suitable financial institutions or firms evidencing a proven investment performance record will be retained to manage the investment portfolio, in revocable agreements. The selected investment managers will operate in accordance with policies established by the Investment Committee and the Board of Trustees.
In order to minimize risk, the number of managers to be utilized, and the funds assigned to each, will be reviewed and determined periodically by the Investment Committee.
III - INVESTMENT MANAGEMENT
The Investment Managers will have the responsibility to invest the funds transferred to its care in fixed income securities, equity securities, and/or short-term reserves. All such investment assets will be accounted for and reported as separate funds by the Investment Managers.
IV - INVESTMENT MANAGEMENT PERFORMANCE AND EVALUATION
The Investment Managers will be required to present a timely quarterly investment report for the Investment Committee, the results and summary of which will be reported to the Executive Board and the Board of Trustees. The Investment Managers will also make formal review presentations as requested by the Investment Committee. Further, the performance of the Investment Managers will be evaluated by the Investment Committee on a quarterly basis, which will include an in-depth comparative evaluation on an annual basis. Results and recommendations are to be reported to the Board.
Performance will be measured against comparable Investment Managers and results expected to rank in the top half of equity and fixed funds. Additionally, equity funds results will be compared with the S & P 500 Index, the Dow Jones Index, and other appropriate measurements. The fixed income results will be compared with a generally accepted bond index of comparable quality and maturity.
V - INVESTMENT RESTRICTIONS
The equity portion of the total funds invested shall not exceed 50% of total assets, at market value, with the balance in fixed income investments or short-term invested reserves. The equity portion of each Investment Account shall be invested in a diversified list of publicly traded common stocks or securities convertible to common stocks. No single issue may represent more than 5% of the market value of the equity portfolio. Equity managers shall not engage in margin purchases or borrowing, short selling, options for futures trading, or other specialized investment activity. The aggregate holding of the equity manager must be invested in securities, which do not restrict the Manager's ability to readily liquidate the position.
Fixed income funds will be invested only in fixed income securities rated investment grade or better by Standard and Poor's or Moody's rating services, Federally-insured obligations of banks or savings and loan institutions, US Treasury securities or securities issued by US Government agencies that carry the guarantee of the US Government. Other than securities issued by the US Government, no single issue may represent more than 5% of the market value of the fixed income portfolio.
VI - UNALLOCATED CASH
The Investment Committee will generally attempt to see that the Fund's assets include a cash reserve sufficient to make distributions with a reasonable future period. Current cash needs are: 5% of assets (based on 3-year rolling average). Managers are requested to have 5% available at each quarter end. Therefore, any investment manager performing under this policy is not expected to accumulate a significant cash position, without prior approval of the Investment Committee. In general, "significant" means more than 20% of the value of assets under management.
VI - SPENDING POLICY
Current spending target is 4% of assets based on a rolling 3-year quarterly average. The percentage will be reevaluated annually, based on inflation and gifting needs.