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Kalamazoo Community Foundation Investment Policy
Helping charitable dollars grow
The Kalamazoo Community Foundation plays a unique role in our community. It exists to encourage community-based philanthropy and also to maximize the charitable gifts of its donors long term. The Community Foundation employs a moderate growth strategy for its endowed funds, which is 70 percent equities, 25 percent fixed income, and 5 percent real estate. Because the Community Foundation is fully committed to the Uniform Management of Institutional Funds Act for the administration of endowed assets entrusted to it, the original gift(s)--defined as "principal" under UMIFA--can never be distributed. Therefore, the endowed assets of the Community Foundation will be with our community forever.
Investment Objectives for Endowed Funds
• Provide grantmaking dollars, subject to a spending policy, to address immediate and expanding
community needs.
• Preserve the original value of gifts in terms of inflation.
• Grow the assets in real terms as market conditions allow, thereby adding greater resources to meet
community needs in the future.
The Kalamazoo Community Foundation employs an investment model principled on a consistent culture, structure, discipline and asset allocation. It is a model that has produced excellent results in both up and down markets over extended periods and is expected to do so over the long term. The model has a tilt toward small cap and value equities.
Investment Managers
Barclays Global Investors of San Francisco manages the S&P 500 Index Fund; Dimensional Fund Advisors of Santa Monica, an enhanced index manager, manages four equity strategies and the real estate investment trusts strategy; RREEF America II, Inc. of San Francisco, Chicago and New York manages the real estate equity strategy; and Jennison Associates of Boston and New York manages two fixed income strategies.
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Quarterly Investment Performance
Second Quarter 2008
The chart below illustrates the Kalamazoo Community Foundation’s quarterly investment performance* for the second quarter of 2008 (April through June).
| Core Assets |
Quarter 2 |
YTD |
1 Year |
3 Years |
5 Years |
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| Moderate Growth Performance |
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| Actual |
-3.1% |
-7.9% |
-10.7% |
4.3% |
7.7% |
| Benchmark (1) |
-3.1% |
-8.1% |
-10.7% |
5.3% |
8.4% |
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| Income and Growth Performance |
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| Actual |
-2.2% |
-5.6% |
2.0% |
4.7% |
6.5% |
| Benchmark (2) |
-2.2% |
-5.3% |
1.9% |
4.4% |
5.9% |
(1) For the Quarter and Year-to-Date (YTD), the Moderate Growth Index is comprised of: 12% Russell
Micro Cap Index; 12% Russell 2000 Value Index; 5% MSCI EAFE Small Index; 30% S&P 500 Index;
11% Russell 1000 Value Index; 12.5% Lehman Brothers Aggregate Bond Index; 12.5% Merrill
Lynch Long Treasuries Index; 2.5% DJ Wilshire REITs; and 2.5% DFA REITs. For Three Years and
Five Years, the Moderate Growth Index is comprised of: 45% S&P 500 Index; 20% Russell 2000
Index; 10% MSCI EAFE Index; and 25% Lehman Brothers Aggregate Bond Index. This investment
strategy is primarily used for endowed funds.
(2) For the Quarter and Year-to-Date (YTD), the Income and Growth Index is comprised of: 50% S&P
500 Index; 25% Lehman Brothers Aggregate Index; and 25% Merrill Lynch Long U.S. Treasuries
Index. For Three Years and Five Years, the Income and Growth Index is comprised of: 50% S&P
500 Index and 50% Lehman Brothers Aggregate Bond Index. This investment strategy is
primarily used for non-endowed funds.
* Investment performance is net of manager fees.
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