Effective stewardship of philanthropic assets is key to our mission of promoting philanthropy and improving the quality of life for the residents of Berks County. Our investment goal? To improve the real value of these charitable assets over time.
Our Board of Directors appoints an Investment Committee to manage our charitable assets. The committee establishes and reviews investment guidelines and evaluates investment performance on a regular basis. Our investment policy is similar to that of most community foundations: to have a diversified and balanced portfolio. The objective of the investment policy is to provide a return that preserves and grows our charitable assets, while ensuring a consistent stream of revenue to issue grants and scholarships.
To help us meet our investment goals, we engage Fund Evaluation Group (FEG) as independent consultants. FEG advises the Investment Committee on investment policy and asset allocation. FEG also advises on manager selection and performance review of our Core Portfolio, which is our primary investment pool. Wilmington Trust is custodian for the Core Portfolio. We also maintain investment pools managed by Buckingham Strategic Wealth, RKL Wealth Management, and Weik Capital Management.
We recently sat down with Andrew Zach, Senior Vice President of Fund Evaluation Group (FEG), to have him answer some frequently asked questions regarding the community foundation’s investment strategy. Watch the full interview where Zach explains who FEG is and how they help the community foundation, our investment philosophy, the definition of “hurdle rate”, as well as how and why investment for the community foundation looks different compared to one’s personal investment.
In addition to our Investment Committeee, our Audit Committee assists the Board of Directors in fulfilling its oversight responsibilities related to our financial, operational and compliance information. The Audit Committee oversees our financial reporting process and annual independent audit and reports results of its activities to the Board.
Our Spending Policy is a formula that determines the annual charitable payout as a percentage of the average fair market value of each endowed fund. Our current Spending Policy is 4.5% of an endowed fund’s value. By adhering to the Spending Policy, we can distribute grants and scholarships in perpetuity. When annual earnings exceed a year’s distribution from a fund, the excess is retained in endowment principal. This strategy is intended to grow fund assets, thereby ensuring that the funds will fulfill their purpose in perpetuity.
In addition to the annual distributions determined by our spending policy, we charge a management fee to all funds we manage based on the type of distributions they make. The minimum management fee charged to a fund at Berks County Community Foundation is based on an endowed fund size of $50,000.
The Community Foundation maintains an Audit Committee, which assists the Board in fulfilling its oversight responsibilities relating to the Foundation’s financial, operational and compliance information. They are responsible for overseeing the financial reporting process and annual independent audit on behalf of the Board and reporting results of their activities to the Board.
The Form 990-T, Exempt Organization Business Income Tax return is required to be filed by nonprofit organizations who have $1,000 or more in gross income from an unrelated trade or business. The Community Foundation does not have such income and hence, is not required to file Form 990-T. If the Community Foundation were required to file Form 990-T, it would be made available here.
Click the link below to download a PDF version of our annual report.