Our Commitment and Approach
Every dollar that we steward on behalf of our many generous supporters is a critical investment in Adirondack people and communities. With diligent guidance from our Finance Committee, our investment strategy focuses on maximizing returns within an acceptable risk tolerance to generate grant dollars for today while also preserving resources to fund future needs.
As a community foundation, our overarching goal is to ensure that charitable dollars entrusted to us are well stewarded and being put to work – year after year – for the betterment of Adirondack communities. We are dedicated to an investment philosophy that earns market-level returns and emphasizes superior long-term performance, which at times may cause our returns to experience short-term volatility. We look for ways to control volatility – ever mindful that we’re in this for the long-term to strengthen the Adirondack region.
We pool and invest our family of funds to help our supporters maximize the impact of their generosity. Through our investment policy, our Board of Trustees delegates investment management decisions to the Finance Committee, who works to execute a well-diversified asset allocation strategy with our investment managers at Vanguard Institutional Advisory Services. We strive to maximize return within an acceptable risk tolerance to generate grant dollars for today, while preserving resources to fund future needs in our communities.
Adirondack Foundation engages Vanguard Institutional Advisory Services to manage its investment portfolio. Our objective is to have 65% of our assets in index and index-like investments. The asset allocation is 70% equity and 30% fixed income.
Currently, we have some actively managed investments remaining with our prior manager which will largely be transitioned by the end of fiscal year 2021. We are confident in Vanguard’s ability to support an investing approach that is simple, transparent, and low-cost. You can learn more about Adirondack Foundation’s investment philosophy and other information below.
Supporting fees are the costs associated with administering a fund at the Foundation. They allow the Foundation to do everything from overseeing bookkeeping and auditing of each fund, to devoting time to carefully providing investment oversight, assisting with grantmaking, acknowledging contributions, and exercising the required due diligence over grants made from funds to nonprofits or scholarship recipients.
These fees make our work possible – the real, local people who comprise our staff – and allow us to respond to community needs, convene organizations around important issues through the Adirondack Nonprofit Network, track community trends around the region, and serve as a conduit to bring resources into the Adirondack region. They are more than just simple charges for the delivery of professional services associated with funds – they are an important contribution to the community itself.
Supporting fees are tiered based on assets in component funds. Funds requiring high levels of transactions, such as processing more than 50 gifts per year, may be assessed additional fees for the value-added service provided by the Foundation. Contact us for a detailed fee schedule.
Adirondack Foundation’s spending policy relates to the amount available for grant distribution from individual funds. We work on a total return spending policy that is designed to maintain and, over time, increase the purchasing power of funds, providing a relatively steady and predictable level of grantmaking.
The Foundation's current annual spending policy is set by the Board and calculated using a spending rate of 4.5% of a fund’s average market value, determined using the trailing twelve quarter-end values. This rate may be adjusted from time to time depending on investment performance or economic conditions. Our spending level is based on long-term performance trends, to avoid major fluctuations.
Unless otherwise restricted, we prudently and consistently administer all funds within the requirements of New York Prudent Management of Institutional Funds Act (NYPMIFA). For certain funds, the Board may approve a different rate, depending on donor objectives.
Adirondack Foundation, along with its investment consultant and committee, continually reviews its asset allocation targets, select managers, and review performance. To see a list of our current Investment Committee members, please contact us directly.
Additionally, the Council on Foundations has determined that our organization is in full compliance with the National Standards for U.S. Community Foundations. This accomplishment provides assurance to the public that we maintain the highest of standards in the administration of our organization.
Endowments are meant to last forever while personal investments typically have a shorter horizon. In the short-term, for instance, an individual account may look like it is performing better, but in the long run, volatility often evens out and endowments can outperform individual accounts. The Foundation’s returns, therefore, are comparable to endowment returns of other community foundations and not the S&P.
The greatest difference between the Foundation reporting of performance and widely reported market information in the news is that the Foundation reporting will generally correspond to our fiscal year, July 1 - June 30. Most often when market return information is broadly reported on, it is from a calendar year perspective. Before a fair comparison can be done, the timeframes for the two must be the same.
All fundholders can access fund information and make grant recommendations online through Donor Central. It is important to note that the investment returns and fund balances in Donor Central are updated on a quarterly basis. If you are unsure about the balance or would like assistance interpreting fund information, contact us – we would be happy to walk you through it.
We have two pools available for investment – the long-term main pool and an intermediate pool. Donors may wish to choose among them based on their investment time horizon. See below for a high-level comparison of the three.
Flexible donor-advised fundholders may wish to draw down their fund to make grants prior to replenishing the fund at a later date. These individuals may have a shorter investment time horizon than permanent fund holders. If invested in the main fund with a 70% equity allocation they would be exposed to greater volatility and potential for principal loss given the shortness of time available to recover from downturns. The intermediate fund, with an asset allocation tuned to their shorter time horizon, may be a better match of risk and investment horizon.
Investment Pool Options
We have two pools available for investment – the long-term main pool and an intermediate pool. Donors may wish to choose among them based on their investment time horizon. See below for a high-level comparison of the two
A great option for donors who expect their fund balance to remain fairly stable over the long-term.
- 5+ year time horizon
- 70% equities/30% fixed income
- Available to all fund types
A fund with an asset allocation tuned to a shorter time horizon for donors wishing to balance risk and investment horizon.
- 2-5 year time horizon
- 30% equities/70% fixed income
- Available to flexible donor advised funds