Foundation Financials

Investment Objectives

The financial objectives for the Athens Area Community Foundation’s investments are as follows:

  • To create a growing stream of income which will support the charitable purposes of the Athens Area Community Foundation, Inc., its donors and its agency endowments
  • To preserve the purchasing power of the Foundation’s assets

These objectives dictate that the Foundation conserves and prudently manages those assets. The perpetual nature of the Foundation requires a growing asset base and a growing annual return.

The primary investment objective for the total portfolio is to attain an average annual real total return (net of investment management fees) of at least 5% over the long-term (rolling five year periods). It is recognized that the real return objective may be difficult to attain in every five year period but should be attainable over a series of five year periods.

Every effort is made to minimize portfolio management expense. Current expense ratios average .69% compared to the industry average of 1.19%.

Investment Oversight

AACF’s Board of Directors is responsible for the oversight of the Foundation’s investment assets and delegates regular review and management of the Foundation’s investments to the Finance Committee of the Board, which meets at least quarterly and reports to the full Board at its next regularly scheduled meeting.

The Finance Committee is responsible for contracting with investment advisors and managers for investing the Foundation’s assets and for measuring performance of the Foundation’s investments.

The Foundation works with a number of Financial Managers who provide investment and estate planning advice to their clients. These advisors follow a set of guidelines that are provided by the Foundation and that are recertified annually. Significant donors may recommend a money manager provided they follow the general guidelines for managers outlined in the Foundation’s Investment Policy.

Investment Strategy

The Foundation’s assets are allocated by a schedule that is established by the Finance Committee and approved by AACF’s Board.

For individually managed accounts, the Foundation prefers selected mutual funds managed by American Funds/Capital Group. The majority of our investable assets are invested in an Equity Pool (65%) and a Fixed Income Pool (35%). Individual Equity, Fixed Income and Balanced Funds may also be used provided they follow the approved fund mix.

No securities may be purchased on margin and no short selling is permitted. The Foundation does not invest in Alternatives, Futures or Options.

Audits and IRS Returns

The Foundation is fully audited each year by an independent CPA firm. Audits are available for public inspection. The Foundation’s fiscal year is July 1 through June 30. IRS Form 990 is on file at our office and available for public inspection.

Investment Performance 

AACF’s investments consistently outperform the investments of other community foundations over time.

AACF VS COMMUNITY FOUNDATION SURVEY

COMPOUND ANNUALIZED GROWTH RATE thru 6-30-16

Net of Fees

 

AACF

Balanced

Community Foundation Peers

Balanced Index

1 YEAR

2.03%

-2.6%

2.53%

3 YEARS

7.98%

4.5%

7.61%

5 YEARS

8.18%

4.5%

7.79%

7 YEARS

10.76%

8.1%

10.18%

10 YEARS

6.24%

5.3%

5.82%

 

 *Peer Group Community Foundations currently have $100-249.9 million under management

*Balanced Index is 49% S&P 500, 16% MSCI EAFE, 35% Barclays U.S. Aggregate