The Community Foundation takes great pride in publicizing grant and scholarship awards each year, as both types of awards serve to improve the greater community and the people within it. However, there is a key reason why the Foundation is able to make such awards that is not often publicized. While grants and scholarships get all the press, wise and prudent investment by the Foundation is the behind-the-scenes-genius-at-work that makes these awards possible. 

 

The awarding process at the Community Foundation is not as simple as money in, money out, even though it may sometimes seem that simple. Through the very generous gifts from great donors, the Foundation establishes an initial pool of monies within specific funds. It is at this point that these monies enter the Foundation’s investment pool. Each year, these gifted monies that have entered CRCF’s investment pool will see a rate of return, thus adding to the growth of a specific fund. After this investment growth, a portion of the return on investment is awarded back to the community via grants and scholarships. 

 

Another way to illustrate this is through the following example: Jane Doe makes a gift of $5,000 to establish the XYZ Fund at the Community Foundation. This $5,000 is then invested by the Community Foundation for growth. Assuming the Foundation’s rate of return for that year is 10%, the XYZ Fund will grow by $500, thus putting the total balance of the fund at $5,500. Additionally, a portion of the $500 that was returned that year can be granted to the community.

 

While the previous example assumes an investment growth of 10% per year, the reality is that the Foundation’s investments have performed at a much higher level. Through a 3-year period, the Foundation’s rate of return has been 12.14% compared to a 10.83% industry benchmark. Even more impressive, this past year the Foundation’s total rate of return was 16.21% compared to a 15.37% industry benchmark. Overall, the Foundation’s investments have outperformed the industry benchmark dating back to 1995, demonstrating the consistency and sustainability of CRCF’s investment program. This all equates to greater growth to each fund held by the Foundation on an annual basis. More importantly, from a community standpoint, it equates to more money granted back, based on these higher return rates, over the course of time. 

 

The success of the investment program is largely due to the diligence of CRCF’s Investment Committee. This all-volunteer committee meets quarterly to review the performance of CRCF’s investments and to monitor the work of the Foundation’s thirteen investment managers. The Committee also researches new methods and tools of investment to make sure that the Foundation is keeping up-to-date with the current trends within the investment community. No matter what, this Committee always keeps the best interest of the donor in mind, always attempting to maximize return while reducing risk. It is the work of the Investment Committee that has enabled donors whom have entrusted their monies with the Foundation to see their funds grow, while granting more back to the community.

 

The overall sophistication of the Community Foundation’s investment program is far greater than can be described in one short article. If you are interested in learning more about the Foundation’s investment structure, feel free to contact the staff at 661-3390. The investment program is more than dollars and cents…it is an investment in community.