HARVARD CLUB OF BOSTON FOUNDATION

Notes to Financial Statements

(See Independent Accountants’ Compilation Report)

Endowment funds consist of donor-restricted endowments and funds designated by the Board as endowments. Income from donor-restricted endowments is restricted for specific purposes and is not available for general expenditure.

Board-designated endowment of $6,558,560 and $6,687,221 at June 30, 2022 and 2021, respectively, is subject to an annual spending rate. Although it is not the intent to spend from this board-designated endowment (other than amounts appropriated for general expenditure as part of the Board’s annual budget approval and appropriation), these amounts could be made available if necessary.

Note 4 – Investment and investment income

The Foundation has an agreement with Harvard University ("University") pursuant to which the University invests the Foundation's funds. The agreement provides that the Foundation's funds may be pooled with other funds managed by the University. The Foundation has the right to withdraw these funds.

The investment in the Harvard University Pooled General Investment Account (“GIA”) is carried at fair value as provided by Harvard University ("University"). The investments in the Pooled Account are managed by Harvard Management Company ("HMC"), a wholly-owned subsidiary of the University. The Foundation has categorized the investment as a Level 2 fair value measurement in accordance with the Fair Value Measurements topic of the FASB Accounting Standards Codification ASC 820.

Units in the GIA are assigned to each fund on the basis of the fair value of the GIA at or near the time assets are received for investment. Investment income is allocated among the funds based on each fund’s units.

The Harvard University Pooled General Investment Account’s investment strategy incorporates a diversified asset allocation approach and maintains, within defined limits, exposure to the movements of the global public and private equity, fixed income, real estate, and commodities markets. Exposure to these markets is achieved through direct investments in individual securities, investments in special purpose vehicles and/or through investment in vehicles advised by external managers. (See Harvard University's 2022 financial report for additional information).

Investments in global markets involve a multitude of risks such as price, interest rate, market, sovereign, currency, liquidity, and credit risks, amongst many others. The University manages exposure to these risks through established policies and procedures related to its ongoing investment diligence and operational due diligence programs. The University anticipates that the value and composition of its investments may, from time to time, fluctuate substantially in response to any and all of the risks described herein.

The following is a summary of investment income (loss):