Resources

Topic: “Investments”

The Potential of Program Related Investments

Program related investments (PRIs) count toward a foundation’s distribution requirement as long as they meet the following criteria: They serve a charitable purpose—A PRI’s primary function must be to further the foundation’s charitable purpose. Income or appreciation of property is not a significant purpose—An investor solely interested in profit would not make an investment on... Read More

Rebalancing a Portfolio

Foundations can take different approaches to rebalancing a portfolio, whether driven by the market, performance, or the calendar. Calendar or periodic rebalancing at specified times (monthly, quarterly, or annually)—Rebalancing can be set to return to a specific target allocation each time. It also can be set to return to an allowable range within a set... Read More

Real Estate Assets

In addition to fairly consistent and often dramatic appreciation in value, real estate can generate substantial cash flow. The yield from real estate often exceeds what one can derive from fixed income securities, such as bonds or Treasury bills (T-Bills). Between 1972 and 2000, Real estate investment trusts (REITS) generated an average yield of 12.45%... Read More

Prudent Investment Practices

The individuals responsible for managing a foundation’s assets want their investments to do well. Beyond these good intentions, however, most states maintain laws with higher standards that legally bind trustees and board members to a series of duties and responsibilities. These standards—called fiduciary duties—are commonly known as the duties of care, loyalty, and obedience, as... Read More

Preparing for a Fiduciary Audit

When crafting an investment policy statement (IPS), trustees, directors, and other decision makers should consider future fiduciary audits and thus keep compliance and accountability in mind. As an institutional investment consultant, my clients often ask for my assistance when confronted with a fiduciary audit. I use the following audit tests. Investment horizon An investment horizon... Read More