Prudent investment stewardship is essential to our mission of building long-term charitable assets for the benefit of our communities, forever. Our donors benefit from a collective investment approach that affords individual fundholders access to investment managers and products that traditionally have been reserved for larger larger portfolios and established financial institution relationships. With NCCF, donors may achieve broader diversification through alternative asset styles and liquidity options not usually available to individual investors.
The overall objective of the Foundation is to preserve and protect fund principal while achieving a long-term, average return sufficient to cover a 5% spending policy plus an average 1% administrative fee and inflation, as measured by the CPI Index, over a complete market and economic cycle. Achieving this objective requires the assumption of a moderate level of risk, a long-term investment horizon and asset diversification.
The perpetual nature and long-term perspective of philanthropy are the bases for the Foundation’s investment philosophy. Philanthropic investing has a longer-term horizon than personal investing, retirement investing or intergenerational investing.
Historically, equity investments have outperformed both fixed income (bonds) and cash (certificates of deposit and money market accounts). A moderate asset allocation of 70% equity (stocks), 20% fixed income, and 10% alternative investments is appropriate for the long-term perspective of philanthropic investing and the investment objective to preserve fund principal and an appropriate return.
Layers of stewardship
The investment portfolio is overseen by the NCCF Finance Committee, a sub-committee of our statewide Board of Directors. Our investment partners are approved by the Finance Committee. The committee and NCCF staff, with the assistance of our investment advisor, closely monitor our roster of select investment managers for adherence to the Investment Policy Statement, performance expectations, and professional and ethical behavior.
- Fund Evaluation Group (FEG) – Advisor
- U.S. Trust Bank of America
- First Citizens Bank
- Raymond James Financial Services
- Edward Jones Trust Company
- Merrill Lynch Trust Company
- Wells Fargo Bank, N.A.
- Pax World (socially responsible mutual fund)
- NCCF Investment Fund (managed by FEG)
All investment partners manage their portion of the portfolio to the asset allocation targets, though allowable ranges around the targets provide flexibility for opportunities.