4 minute read
Growing Endowment
Investing For Lasting Impact
THE FIRST DONORS to The Community Foundation expected their gifts would have a lasting impact. Those gifts, and so many more, have!
“We gave to The Community Foundation in its early years, knowing that our gift would make a difference right away, but also have a lasting impact. As we’ve moved from Muncie, it’s rewarding to know that we have a lasting legacy in the community that was our home,” said Mary Sissel, an early member of the Board, who, along with her husband George, was one of the first donors to The Community Foundation.
Thanks to The Community Foundation’s enduring model, the Sissel’s gift continues to make a difference - and in ways they may not have even imagined when the gift was made. Gifts to The Community Foundation are invested for growth. Each year, a portion of the earnings are spent on grantmaking to enhance the quality of life in Muncie and Delaware County.
Today, an investment committee comprised of local volunteers monitors and recommends the diversified allocation of assets, monitors and reviews the performance of investment managers and investment consultants, and recommends investment policies to the Board of Directors, including spending policy. The investment managers follow the investment policy approved by the Board of Directors. The policy is prudent and requires action that will support the Foundation forever. As the Foundation has grown, aged, and matured, the investment policy has, too.
Before the establishment of a dedicated investment committee, the Foundation’s finance committee served in that same role. Mary served on the finance committee from 1995-1998. She saw first-hand the value of responsible investment for long-term growth.
Earliest investments included stocks, bonds, and mutual funds to balance the opportunity for growth against risk. In 2012, we expanded our portfolio for further diversification to include private equity.
As a field, the community foundation sector is exploring new opportunities to further benefit the communities they serve. The Community Foundation of Muncie and Delaware County emphasizes continued learning and improvement in our work. We see that our investments can help us impact Muncie and Delaware County residents.
Over the last several years, the Foundation’s Board of Directors has explored local impact investing as a tool to be utilized by The Community Foundation. Local impact investing gives foundations the opportunity to invest in local projects and programs for a combined social and financial return. In 2022, The Board of Directors approved an impact investment policy and introduced an Impact Investment Subcommittee to serve under the Investment Committee. The policy sets parameters on the portion of the endowed assets that can be used for impact investments. The Impact Investment Subcommittee evaluates and recommends investment opportunities.
At the recommendation of the Impact Investment Subcommittee and the Investment Committee, the Board of Directors approved its first impact investment in late 2023. Working in partnership with Prime Trust Financial and a handful of referral partners, micro business owners, defined as small businesses who have less than ten employees, who might barely miss traditional commercial loan opportunity requirements, will have access to capital in the form of capacity building loans. The Community Foundation’s investment will serve as collateral for the loans when needed. In return, The Community Foundation will earn a return rate on the invested dollars during the life of the program. The Micro Business Loan Program will strengthen entrepreneurship and small business in Muncie and Delaware County with access to capital for capacity building and upward mobility opportunities that develop our local economy positively.
Mary gave knowing her contribution would have a lasting impact. Investing for growth allows us to serve the community better and be responsive to change.
Investing in the community is precisely why The Community Foundation is here.
Strategies for Growth
LONG-TERM SUSTAINABLE SOLUTIONS
The Community Foundation invests its endowed funds to provide a stable resource for Delaware County that responds to today’s needs while preserving and enhancing funds for future needs.
AN ENGAGED INVESTMENT COMMITTEE
The Investment Committee makes recommendations to the Board regarding investment policy and strategy, working with an investment manager. The committee includes community volunteers with expertise in finance, investments, and business.
SAFEGUARDING AGAINST VOLATILITY
A well-diversified portfolio is fundamental to The Community Foundation’s strategy to maximize investment returns and reduce risk and volatility. Our Investment Committee regularly reviews the asset allocation strategy.
BALANCED SPENDING
Each year, The Community Foundation’s Board reviews the spending policy rate. A prudent spending policy rate helps maintain the funds for future years. Our rate is 4.25%, and the grant distribution amount is calculated using a 12-quarter average balance.
