Investment Pools
The Community Foundation’s investment pools are managed by our Investment and Finance Committee.
Each pool has a different target allocation, intended to meet the unique cash flow needs of the Funds within the pool:
Short-Term Pool – Capital Preservation
This pool is for funds that will be spent within a year or when the timing of distribution is uncertain. It’s designed for non-endowed funds and donors who plan to grant most of the balance of their fund within a year. This option offers the highest security and easy access to funds.
Mid-Term Pool – Stable Growth
This pool is for funds that will be spent over several years (3-7 years). It’s designed for non-endowed funds and donors who may or may not add more money to their grantmaking fund. This option offers higher returns than the short-term fund while staying more stable through market changes.
Long-Term Pool – Market Returns
This pool is for funds meant to last forever. It’s designed for endowed funds, where annual payouts follow the Foundation’s Spending Policy and are set by the Board of Directors. This option focuses on steady growth over time.
Socially Screened Long-Term Pool – Socially Screened Market Returns
The pool is managed like the long-term pool; however, investments are screened for environmental, social and human rights criteria.
Impact Investment Pool – Local Impact
This pool consists of “evergreen” funds that are continually recycled to support nonprofits and local businesses through loans, loan guarantees, and equity investments in local small businesses. Investments are focused on local impact and community benefit first, rather than market-rate returns.
The Board has directed our Investment and Finance Committee to limit investments to no-load mutual funds, cash, and other cash equivalents. At current asset levels, this approach is seen as the most cost effective and prudent. The Investment and Finance Committee has selected index-type mutual funds that meet the investment objective of each pool.
Learn more about Whatcom Community Foundation’s Investment Pools and Asset Allocation HERE>
Administrative Fees
Nominal annual fees help fuel our community work and cover normal administrative costs to manage investments. Additional fees may be assessed for required outside consulting, legal work, or the processing of large numbers of gifts or disbursements. Expense ratios associated with our investments are less than 0.3% at present. We do not provide financial benefits of any sort to third-party participants in the gift planning process. Currently, we do not charge a separate investment management fee.
Impact investments, whether endowed or non-endowed, require additional management, including vetting, due diligence, and oversight. To cover these costs, funds invested in the Impact Investment Pool will be subject to an annual administrative service fee of 2% of the fund balance. These funds will not be included in progressive fee calculations or householding. Additionally, the standard administrative service fees for endowed and non-endowed funds will not apply to investments in the Impact Investment Pool.
Endowed Funds Fee Structure
Fees will be assessed monthly, based on the fund balance on the last day of each month. The fee assessed will be one-twelfth of the appropriate annual fee rate. Endowed funds, and non-endowed funds invested in the long-term investment pools, will be charged an administrative service fee on the following progressive scale:
1.50% on the first $499,999.99 of fund assets
1.00% on fund amounts between $500,000 to $999,999.99
0.75% on fund amounts between $1 million and $4,999,999.99
0.50% on fund amounts above $5 million
The fee schedule will be applied to the total dollar amount in multiple endowed or long-term invested funds contributed by a single donor.
For example, a single donor maintains three endowed funds as follows:
Non-Endowed Fund (Long-Term Pool) #1: $ 400,000.00
Endowed Fund #2: $ 300,000.00
Endowed Fund #3 $1,700,000.00
Total Single Donor Endowed Funds $2,400,000.00
Fee Calculation: (1.5% X $499,999.99) + (1.0% X $499,999.99) + (0.75% X $1,400,000.00) = $23,000.00 (Or an average fee of 0.9583%)
Short-Term and Long-Term* Non-Endowed Fund Fee Structure
Fees will be assessed monthly, based on the fund balance on the last day of each month. The fee assessed will be one-twelfth of the appropriate annual fee rate. In addition, a gift fee will be levied on any new gifts invested in the short-term pool when they are received.
* No gift fee will be levied on new gifts invested in the long-term pool.
Both the gift fee and the administrative service fee will follow the progressive scale presented below:
2.00% on the first $499,999.99 of fund assets
1.50% on fund amounts between $500,000 to $999,999.99
1.25% on fund amounts between $1 million and $4,999,999.99
1.00% on fund amounts above $5 million
For example, a single donor maintains three non-endowed funds as follows:
Non-Endowed Fund #1: $ 400,000.00
Non-Endowed Fund #2: $ 300,000.00
Non-Endowed Fund #3 $1,700,000.00
Total Single Donor Non-Endowed Funds $2,400,000.00
Fee Calculation: (2% X $499,999.99) + (1.5% X $499,999.99) + (1.25% X $1,400,000.00) = $35,000.00 (Or an average fee of 1.4583%)
Current Investment & Fund Policies
“It was a privilege working with the Community Foundation on the Ferndale Library project. Not only did they bring financial resources and philanthropic expertise to the table—they also came with the creativity and collaborative spirit that are essential to the success of complex community projects like our library.”
—NORINE AMEND Chair, Friends of the Ferndale Library
