Investments

Waco Foundation is committed to protecting the long-term value of charitable assets under management.

Click on our 03/31/19 Investment Report for more information.

Proper stewardship of charitable dollars is essential to the Foundation's ability to build philanthropic funds in service to the community. Waco Foundation's investment goal is to earn a return that protects endowed funds' purchasing power over time and allows for a 5% spend rate to provide a steady stream of income to the organization or cause the fund supports. This is achieved with a carefully designed, diverse asset allocation strategy which includes both active and passive investment management and a balanced approach to managing risk and return.

Investment Pools:

Waco Foundation works with donors and fund holders to ensure appropriate investment options for the purpose and timing of each fund. The Foundation offers five investment pools to provide flexibility in terms of growth and income over a variety of time horizons.

Endowment Pool: Consistent Income Over Time

The endowment pool is designed to remain steady and provide fund holders with a consistent stream of income and purchasing power over time. Assets are held in a conservative and prudently-managed portfolio that includes a mix of both active and passive investments.

Click the graphs below to review investment returns and the target asset allocation.

Long-Term Pool: Income Determined by Equity and Bond Performance

The long-term pool mimics the endowment pool with the exception of alternative investments. This pool is designed for non-permanent funds that will last more than seven years.

Click the graphs below to review investment returns and the target asset allocation.

Intermediate-Term Pool: Intermediate Grantmaking Strategy

The intermediate-term pool is designed to balance mild liquidity needs with a reasonable level of expected appreciation over full market cycles (low risk and small return). This pool is designed with a time-horizon between three and seven years.

Click the graphs below to review investment returns and the target asset allocation.

Short-Term Pool: Current Grantmaking Strategy

The short-term pool is designed to provide a high level of liquidity for funds with short-term grantmaking strategies. This pool is for funds with a time-horizon of less than three years.

Click the graphs below to review investment returns and the target asset allocation.;

Growth Pool: Income Determined by Market Performance

The growth pool is designed to mirror the market performance and experiences growth and fluctuations while adhering to an acceptable level of risk through equity level diversification. This portfolio has the highest risk, yet generally offers the highest return.

Click the graphs below to review investment returns and the target asset allocation.

Investment Fees:

Waco Foundation charges 75 basis points (or 0.75%) annually for investment fees and does not charge an administrative fee. One-fourth of the investment fee is charged quarterly, based on the fund’s quarter-ending market balance. This charge does not support all of the costs of the investment and administration of the funds, so Waco Foundation subsidizes the fees and administration through the Foundation's Unrestricted Fund. These fees are supported with the intention of passing the potential earnings on to charitable causes in the community.

Spending Policy:

Waco Foundation has established a spending policy to simplify the process of grantmaking each cycle. The spending policy designates up to 5% of total assets, as determined on a 28-trailing quarter period, for grantmaking. This policy applies to both Waco Foundation’s Unrestricted Fund and the endowed component funds under the Foundation's management.