Investment Management

The Idaho Community Foundation invests for the long term because we are focused on endowment funds that will forever support Idaho. Like most long-term investors, we believe in accepting the inherent risks of investing in equities in order to benefit from the rewards which usually result. Donors can be assured of maximum investment growth due to pooling of assets.

Investment Objectives

  • Earn a real return (after deducting inflation) that preserves the purchasing power of the fund’s assets over time
  • Outperform the fund’s benchmark index return, net of all expenses, fees and transaction costs, over a complete market cycle
  • Perform in the 50th percentile of foundation and endowment funds with similar objectives

How We Invest

ICF Investment Subcommittee

  • Includes volunteer financial experts from around the state
  • Determines asset allocation, recommends annual distribution level, works with professional consultant to hire investment managers and monitor their performance
  • Meets quarterly with consultant and annually with investment managers

ICF Investment Managers

  • Dimensional Fund Advisors, The Vanguard Group and State Street Global Advisors manage the equity portion of our portfolio
  • State Street Global Advisors is also our fixed income manager
  • Washington Trust Bank and The Vanguard Group manage our non-endowed money

Investment Consultant

  • Verus Advisory, Inc. (formerly Strategic Investment Solutions) provide performance measurement services and investment advisory consultation
  • Participates in quarterly Investment Subcommittee meeting and meets annually in Boise with the Investment Subcommittee and Investment Managers

Non-Endowed Assets are invested in one of five ways, depending on how long donors intend to keep the fund open.

Non Endowed Investment Strategy Chart

 

 

 

 

Endowed Assets are invested based on the following asset allocation targets: 50% domestic equities, 25% international equities, 10% domestic fixed income securities, 5% real estate investment trusts (REITs) and 10% Treasury Inflation Protecting Securities (TIPS).

Endowment Pie Chart

Annual Rate of Return                       

 

       

1 Year

3 Year

5 Year

10 Year

 

-1.6%

8.3%

7.5%

5.9%

       

Annual Rate of Return

Determining Annual Distributions

Each November, the ICF Investment Committee establishes a distribution level for the following year. The amount available to distribute is based on the ending market value of an individual fund for the prior two to 12 quarters, depending on when the fund was established. The current funding level is 4.5% of the fund’s average market value.

Known as the “Total Return Concept,” this makes market volatility smoother. The result is a predictable flow of funds available to spend as grants. It allows ICF and our funds to continue grant making even in years following poor market returns, while maintaining the purchasing power and grant making capacity of the endowment for the future.

Total Return Concept
Total Return Concept
 

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