The Rotary Club of Colorado Springs Service Fund, Inc. (the “Service Fund”)
Permanent Endowment Fund (the “Endowment”)
Investment Policy Statement (“IPS”)
Background: The mission, vision and values of the Endowment were adopted on April 30, 2018. The purpose of this IPS is to create a written strategy to guide decisions regarding the management of the Endowment assets. Three Trustees (the “Trustees”) will be appointed by the Service Fund Investment Committee with staggered three-year terms. The Endowment is expected to grow from investment returns and through additional contributions. Rotarians and others will be encouraged to donate to this Endowment as another way to sustain the objectives of Rotary.
Investment Objectives: Balanced Growth with emphasis on capital appreciation over current income. Returns should exceed the totals of the spending rate, inflation, management fees and a modest increment for growth. The Endowment will have professional outside management to avoid any conflicts of interest and achieve the desired rates of return.
Risk Tolerance: Moderate with acknowledgement of potential for large losses in the short term.
Time Horizon: Long term. Greater than ten years.
Asset Allocation Strategies: Initially a single, recognized fund manager (Vanguard) will be used to invest the Endowment, with the asset class diversification that matches our goal of very long term growth with moderate risk.
Liquidity Needs: Funds available for distribution will be maintained in the general account of the Service Fund. The Endowment will generally not hold cash.
Permissible Investments: Mutual Funds, Exchange Traded Funds (“ETFs”) and Target Date Funds can be used to provide good asset class diversification. Individual stocks or bonds will not be held in the account and any received as gifts will be immediately sold with proceeds invested. A long-term Target Date Fund or Funds will be used initially.
Spending Rate: Funds will be available for distribution based upon 3% applied to the average month-end market values of the previous 12 quarters. The first distribution is not likely until 2023.
Diversification: There may be just one fund or ETF but the underlying investments should be diversified by asset class and sub-asset class.
Performance Measurement: Traditional blended benchmarks for funds with similar asset allocations will be used to compare investment returns to the goals and objectives. Also returns will be compared with the Consumer Price Index for the relevant periods.
Review: The Trustees will meet regularly and report to the Service Fund and Rotary Club Members at least annually. This policy will be reviewed at least annually to confirm it remains accurate and relevant to the needs of the Endowment.
This statement was approved by the board of the Service Fund on November 5, 2019.
:mjm (Rev.11/20)
