Investment Management

How We Manage the Community’s Endowment

Investment Philosophy

The Community Foundation for more than ninety years has been primarily an endowment organization designed to maintain the community’s charitable assets in perpetuity. Therefore, the investment management concepts and best practices contained within Connecticut law, such as the Uniform Prudent Management of Institutional Funds Act, and the Uniform Prudent Investors Act form the basis of our investment philosophy and strategy. Specifically: In order to preserve the purchasing power and real economic spending of the endowment, The Corporation shall manage its assets in the Perpetual Fund in accordance with a total-return approach, which does not distinguish between an asset’s yield and appreciation, but rather on the total expected return of the assets over the long-term. The Corporation includes those funds held by The Community Foundation’s affiliated entity, The Valley Community Foundation.

Investment Commentary: Q1 2023

During the first quarter of 2023, many of the same headlines and issues experienced over the past year continued to dominate the markets. Inflation, the Federal Reserve, and geopolitics all remained hot-button issues. After a relatively sanguine start to the first two months of the year, the aphorism “gradually then suddenly” seemed to define much of March, as markets returned to the volatility that punctuated 2022. READ MORE

Asset Allocation Policy

The Corporation's^a long-term asset allocation model¹ is as follows:

^a The Community Foundation for Greater New Haven, Inc. is a Connecticut Registered Investment Adviser
¹ Approved by the Investment Committee on 3 March 2021 and The Community Foundation’s Board of Directors on 18 March 2021.
² Certified to be a true copy of the actions approved by The Community Foundation for Greater New Haven's Investment Committee and has not been amended, altered, and remains in effect.
³ Target weightings to be used to assess investment performance for the Relative Benchmark, effective 1 April 2021.
⁴ Market benchmarks to be used to compute investment performance for the Relative Benchmark, effective 1 April 2021.

Partner With Us

The Community Foundation offers several investment options, depending on the type of fund.

The Perpetual Fund

The Perpetual Fund seeks to preserve the real economic spending power over the long-term. To meet this objective, a percentage of a fund's value is calculated according to a Spending Rule Policy annually and is available to make grant recommendations. An amount above the Spending Rule rate may be requested, subject to restrictions; contact The Foundation for details.

The Intermediate Fund

The Intermediate Fund is a diversified portfolio of more liquid assets that seeks to provide the opportunity for some appreciation with moderate risk. Assets are readily available for grantmaking at all times. This option is available only for Donor Advised Funds.

Organization Funds

Organization funds are charitable assets owned and controlled by individual nonprofit organizations managed according to a long-term investment model established for The Community Foundation for Greater New Haven, Inc.’s (The Corporation) own endowment. A charitable organization can participate in this commingled fund by entering into an investment management agreement.

Organizations have the comfort of knowing that their endowment-like assets are managed according to the highest industry standards and best practices. Additionally, The Corporation is a registered investment adviser under the Connecticut Uniform Securities Act. As a registered investment adviser, The Corporation is regulated by The State of Connecticut’s Department of Banking and adheres to its comprehensive compliance program. More about organization funds.

The Spending Rule Policy

The Spending Rule Policy is designed to prudently release a predictable stream of revenue during each fiscal year to meet the region’s charitable needs, while at the same time allowing for maximum flexibility and efficiency of the investment management process.

Generally, and in the absence of a nonprofit institution’s desire to retain the right to withdraw principal from its organization endowment within the meaning of Financial Accounting Standard No. 136 under Generally Accepted Accounting Principles, the process for extracting financial resources from endowment funds to meet the charitable needs of our community is accomplished through a Spending Rule Policy, which is defined as follows:

A Spending Rate, which is determined annually by The Community Foundation's Board of Directors, equal to the greater of: a) Fixed percentage¹ of the endowment assets available for investment based on a trailing five-year moving average; or b) Four and One-Quarter Percent (4.25%) (the “Floor”) of the market valuation of the endowment assets at the end of the most recent calendar quarter; provided however in no event shall The Community Foundation spend more than Five and Three Quarters' Percent (5.75%) (the “Cap”) of the market valuation of the endowment at the end of the most recent calendar quarter.

¹ The Spending Rate for 2023 is equal to five and one-half percent (5.5%).

With the cash option, the Fund is held in cash or cash-equivalent to preserve capital without risk or appreciation, and is readily available for grantmaking at all times.

Investment Management Expense

The Corporation is a Connecticut registered investment adviser, and presents all investment performance information “net of expenses.” Net of expenses means net of the direct costs incurred in the operation of the Commingled Fund that holds the proprietary and organization funds’ endowment and endowment-like assets.

The Foundation’s FY22 (ending December 31st) externally-audited cost of the Comingled Fund's expenses, including sub-advisory fees, was sixty-eight basis points, or 0.68%, and allocated to every component and organization fund on a pro-rata basis.

Administrative Fees

Administrative fees empower The Community Foundation to enhance the impact of philanthropy in Greater New Haven, drive community leadership and offer personalized service and local expertise. The following chart indicates the administrative fees for component funds administered by The Community Foundation:

* Funds can be built to fund-minimum in recommended period of 3-5 years or other time period per written fund agreement. Administrative fees will not be assessed during the "building" period.

Gifts by credit card: The fund that receives a credit card gift will incur the transaction fee assessed by the credit card processing company; this fee does not reduce the deductibility of the contribution.

Investment Performance

Each document below shows a snapshot of the relative investment performance of The Corporation, including those endowments and funds managed for the Valley Community Foundation, and its three largest trustee banks, and includes each entity's market-driven investment performance benchmark as reported by Crewcial Partners, LLC.

Performance in Relation to Peers

In addition to benchmarking its performance against market indices, The Corporation also compares its performance against its community foundation peers. The Corporation has consistently ranked among the top of its peer group since the inception of the national survey.

Benchmarks & Assessment Process

The Corporation and The Community Foundation measure and assess its investment performance monthly, both manager-by-manager and cumulatively, through an external third party. All investment performance data, including holdings and transactions, is independently provided by each manager to The Community Foundation’s independent auditor and to Crewcial Partners LLC, a New York-based firm that provides evaluation and investment advisory services to more than seventy foundations and endowments nationally, including more than twenty community foundations. Investment performance for the Perpetual Fund is assessed against two benchmarks, as follows:

“Absolute”: The Absolute investment performance benchmark is equal to the Consumer Price Index plus effective Spending Rate.

“Relative”: The Relative investment performance benchmark is equal to fifty (50) basis points (0.5%) above the rate of return produced by specific market benchmarks, which represent the asset classes contained in the long-term asset allocation model, with such market benchmarks weighted in accordance with the model’s target allocation.

Governance of Investment Process

The Community Foundation’s Board of Directors annually appoints an Investment Committee consisting of up to eight (8) members, not necessarily from the its own membership, which shall be responsible for complete oversight and implementation of the strategies, models and managers for the investment of the charitable assets entrusted to The Corporation. In concert with the professional staff, the Investment Committee may engage consultants as necessary or desirable to discharge its duties, and shall report such results, activities and actions to the Board of Directors, the donors and the general public via The Community Foundation’s website, at regular intervals.

Currently, the Investment Committee consists of four(4) current or former members of The Community Foundation’s Board of Directors and up to four (4) independent investment experts selected by the committee’s membership.

Investment Management Team