The Community Foundation operates as a charitable partner, a funder, a community leader, and a philanthropic resource. We service more than 740 funds with invested assets of more than $700 million. Paramount to our success in growing regional philanthropy is ensuring good stewardship and prudent investment of our fundholders’ philanthropic investments in the community. Our fiduciary responsibilities span five investment pools – Cash Pool, Local Capital Pool, Intermediate Pool, Social Impact Pool, and Long-Term Pool, more than 25 custom managed pools, plus other assets such as closely held real estate partnerships and companies. We are supported by local and national financial advisors who are aligned with our objective to protect and grow our assets.
In this blog post, we ask Grace Sacerdote, Executive Vice President and CFO, to help us understand how we weather market-shifts with an eye toward supporting the community in perpetuity.
Q: How does The Community Foundation manage its investments?
We pool our assets, and each pool has a unique investment objective that factors in grantmaking time horizon and risk. Equipped with an array of investment options, we work with each of our fundholders to customize investment of their fund assets to meet their philanthropic goals.
Focusing on our long term investments, we invest through the lens of our primary objective – that of generating total returns that are sufficient to preserve and enhance the real, inflation-adjusted grantmaking power of our endowed funds. Hence, our primary target is 7%, with an annual spend rate of 5% plus the Federal Reserve long-term target inflation rate of 2%.
In pursuing this primary objective, the Foundation endeavors to achieve net returns over time that are better than their relevant market averages, while maintaining acceptable levels of risk and liquidity. Given the perpetual nature of our time horizon, we do not expect in every year this investment objective will necessarily be achieved. Rather we look to returns over rolling five- and ten- year periods as a measure of success, benchmarking to our primary objective as well as our peer universe of endowments and foundations.
With support from our consultants, our Investment Committee establishes a strategic asset allocation that is expected to achieve our investment objective while maximizing return for the level of risk assumed. We avoid market timing or change strategy based on current conditions or near-term outlook. We diversify our investment pools by asset class and strategy as this increases the likelihood of achieving return objectives under different economic and market conditions. And, we establish highly disciplined rebalancing strategies between asset classes.
Q: How has the Foundation performed over the long term?
Adherence to these principles has led to strong long-term performance in our largest endowed pool, originated in 1997. Our 10- and 5- year returns of 7.4% and 8.2%, respectively, place us in the top quartile of InvMetrics’ nearly 1,000 peer endowments and foundations for the 10-year period.
In terms of our primary objective, since inception annualized returns of 7.5% exceed normalized inflation, however they are lagging near term due to higher inflation.
Q: How does the Foundation respond in times of greater market uncertainty and volatility?
Importantly, we manage our liquidity to ensure we are positioned to take full advantage of our perpetual time horizon as a risk mitigator, and we adhere to our strategy which is constructed with a high probability of long-term success. Given our advantage of scale, stability and time horizon, volatility offers opportunities – for our existing managers and in terms of the Foundation’s access to top-tier managers that might have expanded capacity for new capital.
Q: Who oversees The Community Foundation’s investments?
The Board of Trustees holds ultimate fiduciary responsibility for donor funds and entrusts the Investment Committee with managing assets in line with our policies and objectives. The Committee works closely with investment advisors and staff to set policy, develop strategy, review performance, and monitor our investment program.
Our investment advisor, Crewcial Partners, LLC, specializes in advising U.S. not-for-profits. They provide guidance on strategy, asset allocation, and manager selection for our Long-Term, Social Impact, and Intermediate investment pools.
We are also grateful for the expert advice of our Investment Committee, which works with staff and our investment advisors to manage our investment program. Our current Investment Committee members include:
- George Egan, Chair, President & CEO, Reinhold Corporation
- David Gonino, Former CIO, Alfred I. duPont Testamentary Trust
- Susan Remmer Ryzewic, President & CEO, EHR Investments, Inc.
- Richard L. Sisisky, President, The Shircliff & Sisisky Company
- Dori Walton, CFA, Former Investment Banker, ING
- Amy Wacaster, Trustee and Former Investment Banker
- R. Halsey Wise, Chairman & CEO, AfterNext HealthTech
- Michael DuBow, Ex-Officio, Chair of the Board of Trustees
Q: How does The Community Foundation determine grant funding from endowed funds?
Our spending policy ensures a steady flow of funds for grantmaking while keeping pace with inflation. We currently distribute 5% annually from endowed funds, based on a trailing 20-quarter average of fair market value as of September 30 of the prior year. This five-year averaging approach helps stabilize grant funding, even during market fluctuations, ensuring continued support for nonprofits—especially when community needs are rising.
We take our responsibility seriously, carefully managing investments to support your philanthropic goals now and in the future. To learn more, visit our website or contact Grace Sacerdote, Executive Vice President & CFO, at gsacerdote@jaxcf.org or Erin Broderick, Senior Director, Finance at ebroderick@jaxcf.org.