The Nebraska Community Foundation works with community, organizational and donor-advised affiliated funds serving 250 communities located in 80 counties. NCF and its affiliated funds have reinvested $269 million in Nebraska since 1994.
Investment options available for NCF affiliated funds are based on whether the money to be invested is in a “permanently endowed” or a “non-permanent” account within your affiliated fund. The much longer time horizon for an endowment calls for a different investing approach than for a non-permanent account that can be granted in full at any time.
Non-permanent accounts hold assets that may be spent in full, and are sometimes formed to raise and hold money for a specific project that will be completed in a fairly short time frame. As a result, non-permanent accounts are invested to provide a high level of liquidity and safety of principal.
Funds in non-permanent accounts are deposited into the Foundation’s checking account. These deposits are then invested via a “sweep account” in investment-grade commercial paper. Rates vary daily reflecting prevailing interest rates. Non-permanent accounts receive the interest rate that NCF receives on the sweep account, less two percentage points.
Certificates of deposit may be used in appropriate circumstances when the Fund Advisory Committee does not have a reasonably foreseeable near-term need for the cash in a particular Non-permanent account within the affiliated fund. See NCF’s policy for purchasing CDs. Because of the potential volatility of equity investments, non-permanent accounts may not be invested in any of the asset allocation models that are used for permanent endowments.
Permanent endowments are accounts whose assets are invested to generate an ongoing source of income in perpetuity. Endowment accounts are invested to provide income and capital appreciation to fund grantmaking and to maintain the inflation-adjusted purchasing power of the endowment.
The NCF Board of Directors has adopted an Investment Policy that governs the management and expenditure of endowment accounts in compliance with Nebraska law. The investment objectives for permanent endowments are as follows:
NCF’s Investment Policy sets forth two Asset Allocation Models from which affiliated funds can choose for each of your endowments, in order to accommodate the differing levels of risk tolerance and cash flow needs of our affiliated funds. All permanently endowed accounts must be invested in one of the asset allocation models; an endowment account may not hold only cash and/or certificates of deposit, nor may it hold all equities. This is to provide for an appropriate level of diversification and expected returns that will be high enough to maintain the inflation-adjusted purchasing power of the account.
The Omaha office of Westwood Trust (Westwood), a Registered Investment Advisor, is the investment advisor for the endowed assets of NCF and its affiliated funds. NCF has worked with Westwood’s Omaha team since January 2002. Westwood offers its clients 10 investment limited liability companies (LLCs) that each cover a specific class of assets, such as large U.S. stocks, small/mid-size U.S. stocks, foreign stocks, bonds and cash. Westwood selects investment managers who are experts in the particular asset class for each of its investment LLCs, and continually monitors the performance of each manager. Each of NCF’s two asset allocation models is put together by combining investments in the various Westwood investment LLCs in different proportions.
Al Svajgr has been involved in cattle feeding, ranching, farming and banking in Dawson County, at Cozad, since 1977. He was chairman of the Beef Board, a national group of beef producers, so the gift made perfect sense. “All the gain I had in those animals would have been taxable if I’d sold them and then made a cash donation,” he said. “This way, I was able to give more value, because I didn’t have to pay taxes on the capital gains.”Read more →