Our Investment Approach
Last Updated (Monday, 13 May 2013 19:41) Written by Administrator Monday, 17 November 2008 19:16
Donors have confidence their gifts will be carefully invested for the long term when they create endowment funds at Edmonton Community Foundation. The investment income will then provide support for our community for generations to come, matching donor wishes with community needs.
Over a single lifetime, an initial donation of $50,000 invested in a permanent endowment fund at the Foundation can result in gifts to charities of almost $1million, distributing more than $34,000 a year by its 80th year. At the end of that time, the fund will have grown to over $750,000.
Donations keep on giving and growing – forever.
Financial Investment Approach
The Foundation Board, with assistance from the Investment Committee, sets investment policy and regularly reviews the investment portfolio. The Foundation's goal is to provide for grant making in perpetuity. In order to attain this goal, the Foundation must earn sufficient investment returns to allow disbursements according to the spending policy, to pay the Foundation's administration expenses, and to grow the asset base so as to maintain the purchasing power of the investment portfolio. The long-term average real rate of return, as measured over moving 10-year periods, is expected to be a minimum of 5.5%.
The Investment Committee, composed of volunteers with senior level investment management experience, reviews the Foundation’s professional fund managers’ performance quarterly against established benchmarks. In the event that a new investment manager must be selected or an additional investment manager added to the existing investment managers, the Foundation will undertake an investment manager search utilizing an independent consultant.
Asset Allocation
(to be implemented over an appropriate time frame)
| Target | ||
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20% - Fixed Income |
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Investment Counsellors
- Aberdeen Asset Management Inc.
- Bentall Kennedy (Canada) LP
- Connor, Clark & Lunn Investment Management Ltd.
- GE Asset Management Inc.
- Global Infrastructure Partners
- Mawer Investment Management Ltd.
- Phillips, Hager and North Investment Management Ltd.
- Standard Life Investments
- State Street Global Advisors, Ltd.
- Canadian Urban Limited
- Northleaf Capital Partners
Main Fund Custodian
- CIBC Mellon Global Securities Services Company
Financial Management
In keeping with the permanent nature of endowment funds, Edmonton Community Foundation investment and disbursement practice reflects the long-term time horizon of our investments and the Foundation’s commitment to provide maximum benefits to our community, now and forever.
Investments are professionally managed, earning an annualized rate of return on investment of 8.62% in 2012 net of average custodian and investment counsel fees (2011: 0.82%) and 7.78% since 1989 (gross of fees).
Disbursement Guidelines
By following a disciplined disbursement policy – disbursing 3.5% of the endowment fund values each year to charities – funds keep pace with inflation and can accommodate periodic weak investment performance. Over time, more support is provided to our community than if any higher percentage of fund value were disbursed.
Net earnings, in excess of the 3.5% disbursed and the administrative costs, are reinvested so the Foundation’s endowment funds and grants continue to grow year over year.
Administrative Costs
Net administration costs are kept at approximately 1% of the average market value of all funds.
Financial Track Record
Edmonton Community Foundation's exemplary record of matching donor areas of interest with community needs and opportunities over the long term has resulted in more than $138 million being distributed in support of charitable initiatives over the past 22 years.
For the year ended December 31, 2012:
- Total value of funds: $305.4 million
- Received in contributions: $16.7 million
- New funds created: 53
- Total number of funds: 715
- Total distributions to charitable causes: $10.1 million
- Return on pooled investments: 8.62% (net of average custodian and investment counsel fees)
- Annualized return since 1989: 7.78% (gross of fees)
- Net administration costs in 2012: 0.52% of the average market value of all funds (excluding custodian and investment counsel fees)
The Foundation’s financial statements offer detailed financial information.
Edmonton Community Foundation is the 4th largest community foundation in Canada with more than $282 million and 690 funds under our management. Our capacity to serve the charitable sector is directly tied to our ability to preserve and enhance our financial assets.
As a registered Canadian charity, Edmonton Community Foundation is required to file a T3010 report with the Canada Revenue Agency annually detailing its administration, executive compensation and other costs. Click here to be directed to the most recent Edmonton Community Foundation CRA T3010
