The foundation through its Investment Committee will protect and invest gifts entrusted to the foundation so that income is available to support the program of the foundation and the gifts are kept for the use intended.
Payout of Income
- The investment portfolio will be considered on a total return basis, which includes consideration of both income from dividends and interest, and also the appreciation or depreciation in the value of the portfolio. From time to time, the Investment Committee will recommend to the Board of Trustees the payout rate for distribution of the income for the foundation program.
- In order to provide some stability of income, the payout rate will be based on a three-year moving average. It is understood that until a three-year history is available that the Investment Committee will develop some reasonable formula considering the market value of the portfolio. The initial rate shall be set at 5 percent.
- The valuation date each fiscal year will be at year end, currently June 30.
Kinds of Investments
- Fixed Income. The fixed income or bond portfolio may be invested in short-term to intermediate-term (up to ten years) instruments, with the portfolio having a seven year or less average maturity. The bonds must have an AA or better rating or be guaranteed by the federal government or by an agency of the federal government. The bonds may also be collateralized by government bonds or federal agency debt instruments. In addition, the short-term portfolio may also be invested in secured or unsecured loans to the National Fraternity of Kappa Delta Rho, Inc. Any loan to the National Fraternity must be approved by the Trustees of the Foundation.
- Equities. Common stock and securities convertible to common stock may be purchased of large capitalized corporations listed on one of the three national exchanges.
- Cash Equivalents. Any short-term cash requirement may be invested in United States Treasury bills, commercial paper, and corporate notes rated Prime-1 or better. Savings accounts, certificates of deposit, and money market accounts may be made in banks as long as the funds are covered by the FDIC and do not exceed $100,000 in any bank.
- Mutual Funds. Investments may be made in mutual funds provided that such funds have been in existence at least five years, are part of a family of funds, and are no-load or low-load funds.
The foundation may not sell short, trade on margin, invest in commodities, options, futures, limited partnerships, venture securities, or any other illiquid investments.
The Investment Committee may delegate to a professional investment counselor the management of part or all of the investment portfolio. The management contract will be subject to Board of Trustees approval. The manager is expected to report regularly to the Investment Committee regarding the performance of the investment portfolio.
This investment policy may be amended by the Board of Trustees on the recommendation of the Investment Committee.