INVESTMENT MANAGEMENT

The North Lee Community Foundation is committed to providing responsible stewardship of the funds entrusted to us. The North Lee Community Foundation partners with The Keokuk Area Community Foundation to invest donor funds. Pilot Grove Investment Services invests the assets of The North Lee Community Foundation.

Our Investment Philosophy is to manage these funds with a long-term time horizon to preserve and enhance the value of the initial endowment gift while allowing for an annual distribution to serve current needs.

The North Lee Community Foundation’s long-term investment objective is to achieve a total return in excess of the sum of the distribution rate, the long-term inflation rate, and the aggregate costs of portfolio management. The goal is to earn a return that allows donors to make desired grants while maintaining the endowment’s future giving power. The current target for total return is 7.5% per year.

Spendable
The distribution (grant spendable) rate determines the dollar amount available for distribution annually. This methodology smooths out the peaks and valleys that would be experienced if income and dividends earned (or not earned) by a fund were distributed each year. This is a strategy that has been adopted by most major endowments. The distribution rate is currently 4.5 percent.

Investment Pools
The North Lee Community Foundation offers Investment Pools designed to meet a range of philanthropic goals and time horizons. Each of our investment pools are carefully constructed and diversified across global investment opportunities to attempt to generate optimal returns while mitigating volatility.

• The Endowment Pool is designed to be long-term in nature and capital appreciation is the primary goal. The portfolio makes investments in both traditional and alternative asset classes. This Pool is for permanent endowments, where the time horizon is in perpetuity.
  

• The ESG Pool is designed as a long-term investment with expected returns similar to the Endowment Pool. In addition to traditional financial analysis, investment managers consider Environmental, Social and Governance factors to reduce risk, enhance enterprise value and benefit society.  This portfolio invests in global publicly traded securities.
  

Fees
Funds at the North Community Foundation are assessed two sets of fees, those for investment management and those for North Lee Community Foundation administrative costs. Investment management fees are those charged by our investment managers and are dependent on the investment portfolio selected. These professional consulting and brokerage fees are allocated pro-rata over all funds participating in the portfolios of the North Lee Community Foundation. Administrative fees are based on asset size and fund type.