COVID-19 Impact on Fund Stewardship & Market Conditions
As COVID-19 and the necessary public health measures to address it create market volatility, Greater Tacoma Community Foundation offers these insights into its stewardship of funds:
1. GTCF’s endowment funds are intended to last forever. We knowingly accept the ups and downs in the market.
2. After an uneventful start to the year, the S&P 500 Index of U.S. stocks was down 20% in the first quarter of 2020. By comparison, the GTCF endowment declined 15.7%. Our investment policy guides us to invest in a globally balanced portfolio of stocks, bonds, private capital and alternative strategies. This diversification has provided some helpful risk management, but the overall portfolio has experienced declines that will take time to recover. The most recent reporting period covers performance through March 31. Thankfully, investment returns were much better in April.
3. Our non-endowed, short-term portfolio declined 5% in the first quarter of 2020.
4. The members of our investment committee and the money managers responsible for stewarding the investment of our assets have experienced difficult environments before.
The primary endowment manager, Vanguard, is closely monitoring global investment markets and remains focused on three broad concepts:
- Monitor market conditions for excessively pessimistic mispricing
- Monitor investment managers to be sure they are responding appropriately to volatility and the higher likelihood of inefficient market pricing
- Seek opportunities to add capital to previously closed managers as openings can be driven by an improved opportunity set and/or decisions by their current investors to withdrawal capital.
In managing the various investment pools, GTCF pursues the following approach:
- Establish a strategic asset allocation which is expected to achieve the long–term return objective of each pool.
- Diversify the portfolio by asset class and strategy as this increases the likelihood of achieving return objectives while managing risk under different economic/market conditions.
- Maintain the strategic asset allocation within established ranges through rigorous monitoring and regular rebalancing. This discipline forces the sale of assets when they are relatively expensive and the purchase of assets when they are relatively cheap.
- Stick with chosen fund managers as long as they remain ethical, have not deviated from their strategy or changed key staff.
- Avoid the temptation to market time or change strategy based on current conditions or near–term outlook.
GTCF is prepared for times such as this. Even though fund values are currently depressed, we will continue to process grants and distributions. To ensure timely philanthropic support to the organizations and causes you care about, we have increased processing grant recommendations from bi-monthly to weekly.
Greater Tacoma Community Foundation’s investment model is based on modern portfolio theory, employing strategically diversified asset allocation. Our endowed funds are pooled to provide investment management economies of scale and access to investment vehicles that are unavailable to smaller individual funds.
GTCF’s endowment portfolio employs a diversified growth strategy with the goal of generating a long-term rate of return sufficient to offset inflation, administrative, and management fees, plus regular grantmaking distributions. Grantmaking distributions are currently calculated at 4.3% of the sixteen-quarter rolling average market value for permanently endowed funds.
Overseeing our investments is the work of our Investment Committee, which is comprised of experienced professionals with extensive backgrounds in investment and finance. The Committee adheres to disciplined decision-making processes, guided by our Investment Policy Statement.
Q1 2020 Investment Update
Q4 2019 Investment Update
- Endowment Pool
- Short Term Pool
- Socially Responsive Investment Pool
- GTCF Vanguard & SRI Investment Performance Presentation
Q3 2019 Investment Update
Q2 2019 Investment Update
Q1 2019 Investment Update
Q4 2018 Investment Update
Q3 2018 Investment Update
Q2 2018 Investment Update
Q1 2018 Investment Update
Q4 2017 Investment Update
Q3 2017 Investment Update
Q2 2017 Investment Update
Q1 2017 Investment Update
Gary Brooks (Chair), CFP®, CSRIC™
President, Brooks, Hughes & Jones
Geoffrey Curran, CPA/ABV, CFA®, CFP®
Wealth Advisor, Merriman
Andy Fagan, CFA®
Financial Advisor, Prudential Financial
Brian L. Green
Attorney and Shareholder, McGavick Graves
Attorney, Fiduciary Counseling, Inc.
Kelly Ryan, CIMA®
Vice President, Senior Portfolio Manager, US Bank
Doug Van Allen, CFP®
Jefferson County Community Foundation
Greater Tacoma Community Foundation employs Vanguard Institutional Advisory Services as its investment consultant.
Forester Capital Management
Fund Evaluation Group
Dwyer, Pemberton & Coulson, P.C.
Recognizing that donors also have an interest in allocating charitable dollars in a fashion that is consistent with their ethics and values, Greater Tacoma Community Foundation launched a Socially Responsive Investment (SRI) fund that seeks to gain both financial and social benefit. SRI funds typically focus on investments that also provide an environmental, social, and/or governance (ESG) benefit. It is important to note that GTCF is not stating what values or opinions are appropriate but rather is recognizing the desire of the community for an SRI investment option and is providing this additional service.
Our team is here to answer your questions and to get you what you need to accomplish your philanthropic goals. It’s important to note that if you plan to enroll and transfer dollars to the new SRI Fund, you can choose a specific dollar amount or a percentage of your funds to go to the SRI pool, but be aware that transfers can only take place once per year.
The following document provides more information and details about GTCF’s SRI Fund:
In keeping with its goal of advancing positive social change in Pierce County, in 2014, Greater Tacoma Community Foundation launched a $1.5 million impact investment program to increase access to flexible, affordable funding for small businesses.
Through impact investing—a tool that allows foundations to make recoverable investments by tying the discipline of the market with the social mission of philanthropy— GTCF aims to generate positive social and financial returns while spurring economic development and job creation.
GTCF has partnered with two nonprofit Community Development Financial Institutions (CDFIs)—National Development Council’s Grow America Fund (GAF) and Craft3—to implement the program. GAF and Craft3 were each awarded $750,000 to identify, evaluate, underwrite and administer investments in small businesses within Pierce County, working closely with GTCF to further its objectives. Both GAF and Craft3 have strong financial and impact performance ratings from CARS™, an independent ratings service for CDFIs.
Unlike grants, impact investments use charitable assets to invest in projects that can generate revenue as well as community benefit by providing inexpensive capital—often in the form of a loan—to mission-driven businesses that wouldn’t normally have access to traditional financing. These investments provide a return through repayment or equity. Once repaid, the funds are then ‘recycled’ back into the community as new loans, thereby allowing for maximum community benefit.
For more information about impact investing contact GTCF’s Philanthropy Team
Investment Roles and Responsibilities
The following are the governance roles and responsibilities of our board of directors, investment committee, and investment consultant:
GTCF Board of Directors
- Fiduciary duty to manage the assets as a prudent investor would
- Maximize returns with an acceptable level of risk
- Protect the principal in perpetuity
GTCF Investment Committee
- Adopt the provisions of this Investment Policy
- Hire and fire investment managers, custodians, and investment consultants
- Monitor quarterly performance with the Investment Consultant
- Provide research, education and investment manager information to the Committee
- Provide proactive recommendations
- Monitor the activities of each investment manager
- Provide the Committee with quarterly performance reports
- Review this Investment Policy Statement with the Committee
Our Forms 990 and 990T, as well as, our gift acceptance policies, are available upon request.
Endowment Investment Policy (August 23, 2017)
Short-Term Investment Policy (June 22, 2016)
Low-Risk Investment Policy (June 22, 2016)
Annuity Investment Policy (June 22, 2016)
Socially Responsive Investment Policy (April 27, 2016)
Whistleblower Policy (updated 2017)