David is Port Counsel for the Port of Benton and serves as the Chair for the CBC Foundation Board.
"The success stories and the diversity of scholarship recipients is a driving factor in my continued involvement with the CBC Foundation Board. Not only is this an opportunity to contribute to my community and the educational goals and success of students, but the work and experience offers contribution to my personal development and allows me to aid in bringing awareness to my peers, colleagues, and the community at large regarding the need for continued funding to serve traditional, non-traditional, and first-gen students. CBC offers opportunities to directly invest in our community members and future, and the growth over the last several years is a testament to the mission of offering affordable tuition with a quality education."
Melda is the Cardiovascular/Digestive Health Service Line Director at Kadlec Regional Medical Center. She serves as the Vice Chair for the CBC Foundation Board as well as the Chair of the Board Development Committee.
"I was a first-generation college student in my family. I was only able to attend college because of scholarships. I would like to give others the same opportunity to be successful in school so, they can meet their goals for their career. Their success is our success and our future!"
Matthew Backlund is Chief Lending Officer at Community First Bank and serves as the Finance Chair for the CBC Foundation Board.
"I was fortunate to come from a family that valued education & higher ed. Because of that, college was always part of the plan, but I’m fully aware that is not the case for many in our community. If I can help those individuals attend and even complete college, I am all in."
Lynn is a Senior Communications Specialist for Central Plateau Cleanup Company (CPCCo) and serves as the Scholarship Committee Chair for the CBC Foundation Board.
"The Foundation provides valuable opportunities for local students in our community."
Rebekah works for Gesa credit Union and serves as the chair of the Planned Giving Committee for the CBC Foundation Board.
Marsha is a retired educator with the Pasco School District and serves as the chair of the Fund Development Committee for the CBC Foundation Board.
"I am the first of my family to graduate college. Attending CBC was the gateway to a long and rewarding career in education. I had the doorway to a better life opened by CBC and I am committed to offering that opportunity for others."
Matthew Petersen is a Senior Wealth Advisor - Compliance Officer at Petersen Hastings and serves on the Executive Committee and the Finance Committee for the CBC Foundation Board.
"I support CBC Foundation to support those that need the most help to further their future and overall economic potential. Additionally, to promote a better economic alternative to university attendance and possible future debt."
Doug is the Associate Superintendent of Human Resources for the Kennewick School District. He serves on the Membership and Executive Committee for the CBC Foundation Board.
"I support the CBC Foundation to provide opportunities for students and build the community."
Board Members at Large
Ann is a local artist. She serves on the Scholarship and Fund Development Committees for the CBC Foundation Board.
Whitney owns Hadron Intrinsic Consulting and serves on the Fund Development, Board Development and Scholarship Committee for the CBC Foundation Board.
"I chose to join the CBC Foundation board to be a bigger part of the community. I have enjoyed learning more about the students that attend and what current financial and educational gaps are. Reviewing scholarship applications has allowed me an inside view of where the community needs are for college education funding. My current career has provided me a communication channel to bring back community education needs to the work force, and other groups I am a part of."
Mitch Peterson is an account manager for CompuNet and serves on the Planned Giving Committee for the CBC Foundation Board.
"I think investing in oneself with higher education is one of the best ways to achieve a higher standard of living and personal growth. It also helps our community continue to grow with high paying/value-add jobs which ultimately benefits everyone in the Tri-Cities. I support the CBC Foundation because I want to help our community gain access to that locally."
Edgardo is a Realtor. He serves on the Planned Giving Committee and the Finance Committee.
"I am a firm believer of higher education and the immense impact it has on one’s life, especially for first generation students like me."
Tayler is an accountant for Monte Nail and serves on the Finance Committee for the CBC Foundation Board.
"I choose to support CBC Foundation because college is stressful enough, knowing that we can help alleviate some of the financial stress for these students is a great feeling!"
Paige is the Manager of CAD Design for PNNL. She serves on the Scholarship committee.
"Education is a powerful way to change lives. It includes but is not limited to, having a profound impact on the financial trajectory of both individuals and their families."
Adan is retired. He serves on the Scholarship Committee for the CBC Foundation Board.
"Scholarships were crucial in my decision to attend college. CBC provides an affordable post-secondary option and prepares students for the world of work. It is also an inclusive and accepting environment."
Kyle is the Owner and Vice President of CG Public House and Catering. Kyle serves on the Fund Development Committee.
"I graduated from CBC before attending WSU. I have a passion for higher education and the endless opportunities education can bring to students."
Jaime is the Executive Director, Communications and External Engagement at PNNL.
"I believe post-secondary education should be accessible to all. I’ve admired CBC’s efforts in this regard and its true partnership with the Tri Cities community."
Moses serves on the Planned Giving Committee.
"Young adult education is my priority in serving my community. Two of my three children attended CBC and went on to obtain their graduate degrees at Eastern University."
Andrew is the VP for Information Technology. He serves on the Planned Giving Committee.
"I have had numerous friends and acquaintances that have worked for and served as board members at CBC and have learned how great the school is in providing higher education at a great value. I want to use my skills and experience to help CBC continue to grow and thrive and help the Foundation provide financial assistance to students."
Maggie is an Associate Attorney with Gravis Law.
"As a first-generation college student and minority, I have made it my mission to help others to pursue higher education and make post-secondary education accessible to all alike."
Foundation Policies & Procedures
PLANS AND BUDGETS
The Foundation will develop and maintain a long-range plan that includes development initiatives, projections on growth of Foundation funds, and spending plans that takes into account the long-range needs of the College. This plan will be updated annually as part of the budget preparation process.
Annually, the Foundation will prepare the operating budget and endowment allocation. The Finance and Investment Committee will be responsible for overseeing the preparation and approval of these documents. The committee will also be responsible for ongoing review and evaluation of the Foundation’s financial status utilizing monthly financial statements.
Updates to the plan and the preparation of the annual budget should begin each year in February with input from the College on their long-range and annual priorities. The plan and the budget should be presented to the Executive Committee for approval prior to full board approval at the spring Annual Meeting.
On an annual basis, the Finance and Investment Committee will review the fee structure that generates the funds to operate the Foundation. The fee structure should be sufficient to provide adequate operating funds, but should be adjusted so as not to build up unnecessary reserves. Changes should be brought to the Executive Committee for approval.
QUID PRO QUO AGREEMENT
The Finance and Investment Committee shall be responsible for overseeing the Quid Pro Quo Agreement with the Columbia Basin College, which spells out the annual support provided by the college to the foundation and the support provided by the Foundation to the College. Any changes to this support will be provided to the Executive Committee and the Board.
The Finance and Investment Committee shall arrange for an annual audit of the Foundation by an independent accountant. The Finance and Investment Committee’s recommendation for the appointment of the independent accountant shall be presented to the Executive Committee annually.
The Finance and Investment Committee shall be responsible for the creation and annual review of the Investment Policy Statement. Changes to the Investment Policy Statement will be approved by the Executive Committee and full board. The Finance and Investment Committee will hire an Investment Advisor using a competitive process. The Investment Advisor will be reviewed for approval no less than every five years. The Finance and Investment Committee’s recommendation for the appointment of an Investment Advisor shall be presented to the Executive Committee.
ACCOUNTING AND REPORTING POLICIES
The Finance and Investment Committee will review and recommend all changes in accounting investment and reporting policies. The committee will ensure that management reports contain sufficient information to reflect the activities of the Foundation and provide sufficient information for management, committees and Board to make accurate operating decisions. The committee will hire an accounting firm to provide accounting and bookkeeping support for the Foundation. The accounting firm will be reviewed for approval no less than every five years.
The Finance and Investment Committee is responsible for reviewing the Foundation’s insurance coverage and ensuring that coverage for all risks is adequate. No less than every five years, the committee will review the insurance agent for approval. Directors and Officers liability insurance coverage will be communicated with the board no less than annually.
Columbia Basin College Foundation is a not-for-profit, independent 501(c)(3) that solicits and accepts gifts that will support the college in fulfilling and furthering its mission. The following guidelines govern the acceptance and processing of gifts.
All donors should seek the assistance of personal, legal, and financial advisors in all matters relating to their gifts, the resulting tax and estate planning consequences.
The mission of Columbia Basin College Foundation is to provide students opportunities and support to achieve their educational goals. The Foundation exists to support student success.
Columbia Basin College Foundation has achieved its current distinction thanks in significant part to the gifts from alumni, parents, foundations, corporations, and other contributors. The Foundation Board of Directors and staff of the Columbia Basin College Foundation solicit gifts that support its core programs as well as special projects consistent with its mission. The following policies and guidelines govern the acceptance of gifts made to the Foundation, or for the benefit of any of its programs.
Use of Legal Counsel
Columbia Basin College Foundation may seek the advice of legal counsel in matters related to acceptance of gifts when appropriate. Review by counsel may be recommended for:
- Stock transfers that are subject to restrictions or buy-sell agreements.
- Documents naming Columbia Basin College Foundation as a trustee or requiring the organization to act in a fiduciary capacity.
- Gifts requiring contracts or other documents requiring CBC Foundation to assume an obligation.
- Transactions with potential conflicts of interest.
- Gifts of real estate including developed and undeveloped property.
- Other instances deemed appropriate by the Columbia Basin College Foundation staff, the Gift, Estate, and Planned Giving Committee or the Board of Directors.
Conflicts of interest
No agreements shall be made between the Columbia Basin College Foundation and any agency, person, company or organization which would knowingly jeopardize or compromise the interests of either party. The role of the Columbia Basin College Foundation staff is to inform, serve, guide or otherwise assist the donor in achieving fulfillment of the donor’s philanthropic purposes, and never, under any circumstances, to exercise undue pressure or methods of persuasion. The tax deductibility of gifts is the responsibility of the donor.
Restriction on Gifts
Columbia Basin College Foundation accepts unrestricted gifts, and gifts for specific programs and purposes, provided that such gifts are consistent with the stated mission, purposes, and priorities of the Foundation. Columbia Basin College Foundation reserves the right to decline any gift that is too restrictive in purpose, too difficult to administer, or is intended for purposes outside the Foundation’s mission. The Foundation may also decline any gift that contains conditions or restrictions that negatively affect the integrity or reputation of the activities, policies, mission, goals, and/or programs of Columbia Basin College. All final decisions on the restrictive nature of a gift and its acceptance or refusal will be made by the Planned Giving Committee.
Gift, Estate and Planned Giving Committee
The Gift, Estate and Planned Giving Committee facilitates the gift acceptance process with input from the college president, board chair, executive director, or other stake holders when appropriate. The committee shall oversee the acceptance of all gifts to the CBC Foundation. All non-cash gifts, endowments, gifts that have long term significance and/or naming rights will be sent to the committee for review. The committee is charged with recommending the acceptance or rejection of such gift on behalf of the Foundation Board of Directors. Gifts of significant risk may involve more in-depth documentation and verification. Gifts of significant risk include:
- Non-publicly traded securities
- All gifts of real property
- Gifts of personal property if not used by the College
- All gifts of real or tangible personal property subject to donor restrictions regarding disposal of such property
- Any sale of property where a donor is associated with the acquisition of property by the College or Foundation below its fair market value
- Cash gifts with significant donor restrictions
- All gifts of unusual items or gifts of questionable value
- Any gift that has potential to be at conflict with the mission, vision and values of the foundation
Types of Gifts
Many types of assets may be donated to the organization. Conditions for acceptance of assets vary according to the form of the gift. Columbia Basin College Foundation acts in a fiduciary capacity in administering gifts in compliance with the instructions of the donor. If a gift is not accompanied by instructions, every effort will be made to contact the donor to determine the intent. When clarifying donor intent is not possible, the use is determined by the Board of Directors.
Cash and Cash Equivalents. Cash gifts are accepted in any form. Cash gifts may be delivered in person, by mail or online. There is no minimum donation amount. Checks shall be made payable to the Columbia Basin College Foundation and delivered to 2600 N. 20th Avenue, Mail Stop F1, Pasco, WA 99301. Secure credit card contributions may be made using the online donation form at www.columbiabasin.edu/donate or by calling the Foundation at 509-542-5519.
Securities/Stock. Unrestricted marketable securities may be transferred to an account maintained at one of Columbia Basin College Foundation’s brokerage firms. As a general rule, all marketable securities are sold upon receipt. If the marketable securities are restricted by applicable securities laws, the committee shall make the final determination on acceptance of the restricted securities.
Gifts-In-Kind. Donations of tangible personal property shall be reviewed to determine:
- Does the property help fulfill the mission of Columbia Basin College or meet the needs of one of its programs?
- Is the property marketable?
- Are there any undue restrictions for the use, display or sale of the property?
- Are there any carrying costs for the property?
- Is the title of the property clear?
If the gift is accepted, written acknowledgement will be provided to the donor with a description, but not value, of such property. Federal law prohibits the Foundation from placing a value on donations of personal property. If the donor wishes to claim a charitable donation and the value of the item exceeds $500, the donor must complete IRS form 8283. If the value exceeds $5000, the IRS will also require a qualified independent appraisal. It is the responsibility of the donor to find a qualified appraiser and have the appraisal completed.
Life Insurance. Life Insurance policies can benefit the charity through one of the following means.
- Contributing a paid-up policy and designating the Foundation as the owner and beneficiary of the policy.
- Contributing a partial paid policy and designating the Foundation as the owner and beneficiary. Donors must make tax deductible charitable donations to the Foundation to pay remaining premiums.
- Designate the Foundation as the beneficiary on a life insurance policy that is owned and maintained by the donor.
Retirement Plans. The Columbia Basin College Foundation may be listed as a beneficiary of retirement plan assets, such as Retirement Accounts (IRA’s), 401(k), 403(b) and defined contribution plans.
Bequests. Donors and supporters of Columbia Basin College Foundation are encouraged to make bequests in their wills and trusts. Sample bequest language will be made available to donors and their attorneys to ensure the bequest is properly designated.
Real Estate. All gifts of real estate are subject to review by the Foundation Board. Prior to acceptance, Columbia Basin Foundation will require an initial environmental review and appraisal. Both will be the responsibility of the donor. Evaluation for acceptance of real estate includes:
- Does the property further the mission of the Foundation or school?
- Is the property marketable?
- Are there any restrictions, reservations, liens, easements, or other limitations associated with the property?
- Are there carrying costs, which include insurance, property taxes, mortgages, etc. associated with the property?
- Does the environmental audit state that the property is not damaged?
Other Types of Gifts. If a donor proposes a type of gift not covered by this policy, such as Charitable Gift Annuity, Charitable Remainder Trust, virtual currency and assets the committee will review the proposed gift to determine whether it will be approved. If approved, the Foundation will use guidelines provided by the National Association of Charitable Gift Planners and the American Council on Gift Annuities to structure the gift.
- Columbia Basin College Foundation adheres to ethical standards regarding fundraising practices and will comply with all IRS regulations regarding the acceptance, acknowledgement and receipt of gifts.
- If the organization is unable to use the gift as the donor intended, the donor will be contacted by a representative of the Foundation to negotiate an acceptable use of the gift. If the donor is no longer living or is not able to consent to the amendment, then the Foundation may redesignate the purpose of the fund, adhering as closely as possible to the donor’s original intent.
- As evidence of donor intent and documentation of restrictions for gifts to be made in the future, donors will be asked to fill out a revocable gift form.
- It is the responsibility of the donor to secure an appraisal (where required) and independent legal counsel for all gifts made to Columbia Basin College Foundation.
The Columbia Basin College Foundation deposits and records, in the donor software database, all gifts benefiting Columbia Basin College.
Cash Handling and Processing. As part of internal controls, Columbia Basin College Foundation follows a segregation of duties policy. All donations are logged prior to deposit and data entry.
- Cash log, donor software entries, and Financial software entry batches are reconciled monthly.
- Cash and checks will be kept in a safe in the Foundation Office until gift processing and deposit can be completed.
- In an effort to protect donor information, credit cards will only be processed using Converge. No credit card information will be kept written down or transmitted electronically.
- Development Officers who receive charitable donations must secure documentation and deliver it to the Foundation Office within one business day of receipt.
- All donations will be processed in the donor software within five business days. During this process constituent biographical information is confirmed and updated to create accurate tax records and acknowledgements.
- Gift acknowledgement letters will be sent each day that donations are processed.
- Weekly, a list of donations over $1,000 to be forwarded to the CBC President. Summary donation reports will be reviewed by gift officers no less than monthly for individual donor follow up.
Pledges are a commitment to give a specific dollar amount or in-kind donation according to a fixed time schedule. Pledges will be accepted for periods of up to five years. Any exceptions must be approved by the Gift Acceptance Committee.
- A signed letter of intent is required before pledges are acknowledged by the Foundation.
- The letter must contain the amount of the pledge, a clearly defined payment schedule, and signature from the donor and the Executive Director.
- Pledge information is entered into the constituent file in the donor software database.
Upon notification of stock receipt, gifts of stock will be recorded in the donor software constituent record.
- The gift value is recorded at the average of the high and low quoted selling prices on the date the donor relinquishes control of the assets. The type of stock along with high and low quoted selling prices are reported in the donor acknowledgement letter.
- Market llosses or gains realized from the sale of the securities after receipt, nor brokerage fees or other expenses, affect the gift value reported.
Tangible gifts are recorded in the donor software database.
- Documentation of the gift must include justification of fair market value for gifts valued at $500 or more and a copy of a third party appraisal for gifts valued at more than $5000.
- The gift acknowledgement will not include a value for the item. Donors are responsible for establishing the value of their donation and to provide documentation of the fair market value or, if necessary, an appraisal.
- The Foundation will sign IRS Form 8283 as prepared and signed by the donor and signed by a qualified appraiser. If property is sold within three years, the Foundation will file IRS Form 8282 informing the donor and the IRS of the amount for which the property is sold.
Donors are encouraged to consult their own advisors concerning the type of insurance policy and tax deductibility of the gift. While the Columbia Basin College Foundation requests donors alert them when considering life insurance gifts, life insurance will not be recorded until it is irrevocable.
Assigning Gift Credit
IRS tax receipting and reporting must be based on the legal donor. The Foundation may choose to share gift value for recognition purposes through a soft credit. The originating donor retains legal ownership of the transaction, but a soft credit will be applied to another person.
- Gifts made by check are recorded on the donor record of the owner of the account.
- Gifts made by credit card are recorded on the donor record of the card holder.
- Soft ccredits will be applied if a donor wishes to make contributions on behalf of another person; for individuals who make gifts through Donor Advised Funds or Family Foundations; donors associated with corporate donations; or other like situations.
Donor Advised Funds
Gifts made by donor-advised funds are recorded on the on the record of the Donor Advised Fund.
- The advising individual/s, will receive a soft credit for the gift.
- Donors will not receive a tax acknowledgement letter, but will be followed up with and thanked by the appropriate gift officer.
Goods and Services
The value of benefits a donor receives in exchange for their gift is essential in determining the amount of the actual gift. The gift amount is the amount that exceeds fair market value of the benefits.
- Each transaction that involves goods and services must include a breakdown of the tax-deductible amount, the goods and services amount, and a description of the goods and services provided (including on event invitations). This information must be reflected in gift entries and donor communication.
- Goods and services must also be considered with respect to corporate sponsorship. The determining factor that affects the deductibility of the gift is whether the recognition the corporation receives constitutes advertising. The IRS defines advertising as competitive pricing or product information displayed because of the donation. If the recognition fits this definition, the sponsorship is a transaction, not a gift. Simply using a corporation’s name and/or logo for display is not considered advertising.
- All gifts to the foundation are sincerely appreciated and promptly acknowledge in writing. Current IRS rulings and requirements will be adhered to concerning all gifts.
- Donors may request that their gift is not publicly acknowledged or their name listed on any public facing websites, print materials, or social media.
- For gifts that are making a significant impact on college programs, official recognition will be arranged on mutually agreed upon terms from the donor and foundation, and commensurate with gift size/impact.
- Minimum Funding Levels for Physical Naming Opportunities must be approved through the college board of trustees and are handled on a case-by-case basis.
The policy should be reviewed by the Gift, Estate and Planned Giving Committee annually. Changes to the policy must be approved by the Columbia Basin College Foundation Board. Any deviations from this policy must be approved by Columbia Basin College Foundation Board.
Columbia Basin College Foundation has approved the following Administrative Service Charge on gifts.
1. Five percent (5.00%) on each dollar received
If $1 million is received, $50,000 is retained by the Foundation as ASC, and the designated account has $950,000 to be invested in the applicable Foundation investment pool. The funds in the account must be spent in accordance with the donor-designated purpose or for the purpose of the account. If endowed funds are involved, the $950,000 should never be spent, except if needed and as authorized by the donor for the annual endowment payout.
The ASC is assessed when cash is received by the Foundation.
It is the policy of the Foundation to convert all non-cash gifts (e.g., equities, real estate, collectibles, etc.) to cash as soon as practical. Deposit ASC is assessed on the total gross cash value of the gift, before deducting any expenses incurred in converting the gift to cash.
Excluded from the Deposit ASC are any funds received from the State of Washington, funds received from the United Way, or any other gifts excluded by the Foundation’s Board of Directors.
2. One and one-half (1.50%) on the market value of Managed Investments.
The Foundation maintains both endowed and non-endowed accounts. All investment accounts are assessed 1.50% annually with funds paid to Foundation operations quarterly.
Endowments may hold assets that are not actively managed, such as contracts or accounts receivable, that generate interest income. Such assets are not included in the market value of the endowment for the purpose of calculating the Endowment Market Value ASC.
100% of the total investment returns from the non-endowed accounts.
The Foundation maintains both endowed and non-endowed accounts, and the cash of each of the two types of accounts is invested in separate investment pools. The Foundation retains all of the total investment return on the non-endowed accounts.
The CBC Foundation’s Administrative Service Charges were established by the Board’s Executive Committee at an October 2, 2001 meeting. The ASC was reviewed by the Finance Committee and approved by the full board in 2021. Unless otherwise noted, the ASC’s are implicitly renewed each year with the approval of the annual budget.
The Foundation has established its ASC to provide operating budget funds.
Columbia Basin College Foundation’s mission is to establish and cultivate a variety of productive and mutually beneficial relationships with individuals, corporations and other foundations to raise, invest, and administer funds for the benefit of Columbia Basin College and its students. The Foundation seeks to acquire and manage funds for college scholarships, projects, and activities not otherwise supported by the state.
The purpose of this document is to establish guidelines related to the investment of funds, investment reporting, and selection and evaluation of the Investment Advisor. The primary investment goals are to: support operations of the Foundation, provide income to fund scholarships and college projects, and preserve principal.
This document must be reviewed annually by the Investment and Finance Committee with changes approved annually at the Board of Director’s annual meeting.
The parties associated with the portfolio shall discharge their respective responsibilities in accordance with all applicable fiduciary standards as follows: (a) in the sole interest of the portfolio’s beneficiaries; (b) with the care, skill, and diligence that a prudent person acting in a capacity and familiar with such matters would use to conduct for a similar organization; and (c) by diversifying the investments to minimize the risk of large losses.
The investment of assets is subject to the inherent risks. The Columbia Basin College Foundation Board and the Investment and Finance Committee shall use good judgement, but they do not and cannot guarantee the preservation of capital, purchasing power, income growth, or capital growth.
INVESTMENT AND FINANCE COMMITTEE
The Board has delegated to the Investment and Finance Committee the responsibility for oversight of all investable funds of the Foundation. The committee has the responsibility to ensure that the assets of the Foundation are managed in a manner that is consistent with the approved policies of the Foundation in compliance with all applicable laws. Committee members act solely in the interest of the Foundation’s mission, goals, and objectives. The committee is authorized to engage services of Investment Advisor(s) to meet the investment goals and objectives.
- Annually review the Investment Policy Statement and submit changes to the Foundation Board for approval.
- Annually review and approve investment guidelines relating to eligible investments and performance objectives.
- Quarterly, review portfolio and individual investment performance. Address investment management decisions including investment replacement, fund distribution, and necessary rebalancing.
- Evaluate the performance of the Investment Advisor. No less than every five years, initiate a RFP process.
- Engage investment advisors or other professional services, as deemed necessary.
The Committee delegates the responsibility of investing and managing the portfolio’s assets. The Investment Advisor must adhere to the Investment Policy Statement, all applicable laws, regulations, and act in compliance with the Uniform Prudent Investor Act. The Investment Advisor agrees to be named as fiduciary of the assets that they oversee and acknowledges that the investment monitoring and selection have been delegated to them. They must have and provide their Investment Policy to the Investment and Finance Committee annually.
- Implement investment of funds subject to instructions from the committee and guidelines associated with the Investment policy.
- Research investment vehicles and provide recommendations to the Committee.
- Prepare asset allocation analysis and recommend an asset allocation strategy to the Committee.
- Quarterly, present performance evaluation reports to the Committee.
- Demonstrate a reasonable return relative to stated benchmarks.
- Annually, present asset allocation, performance and plan to the full board of directors.
- Within one month, notify the Committee of any significant changes pertaining to funds they manage or the firm, including changes in key personnel, ownership, or financial condition.
- Within one month, notify the Committee of any significant changes pertaining to the investment advisor’s firm, including changes in key personnel, ownership, or financial condition.
- Communicate regularly with staff. Monthly, provide written reporting of portfolio activity, valuations and performance.
Investment Objectives and Guidelines
The Foundation has established three investment funds for three distinct purposes. The Operations Reserve Fund is an investment account used as a reserve for Foundation operations needs when other sources of funding are insufficient. The Operations Reserve Fund will maintain a target level of approximately $750,000. The Programs Reserve Fund is an investment account used as a reserve for Foundation program needs when other sources of funding are insufficient. The Programs Reserve Fund will maintain a target level of approximately $1,250,000. The Foundation Fund is the main investment fund for the Foundation and maintains the remaining Foundation investments.
To accommodate the purpose of the Programs Reserve Fund and the Operations Reserve Fund (i.e. reserves) while maximizing the returns for all foundation assets by pushing excess reserve funds to the more growth-oriented Foundation Fund, the Foundation has established investment transfer guidelines outlined in this section.
Annually, at the end of the Foundation’s fiscal year end (June 30th), any amount invested in the Operations Reserve Fund above the target level of $750,000 shall be transferred into the Foundation Fund and identified as unrestricted funds. Likewise, at the end of the Foundation’s fiscal year (June 30th), any amount invested in the Programs Reserve Funds above the target level of $1,250,000 shall be transferred into the Foundation fund and identified as unrestricted funds.
The Foundation Fund’s time horizon is long-term. The Operations Reserve Fund and the Programs Fund are both maintained to cover short-term (2-3 years) needs for the individual fund’s respective coverage area.
RATE OF RETURN
The goals of the Foundation Fund’s investment objectives are to support the operations of the organization, to provide for current scholarship needs and to maintain real purchasing power. Capital values will fluctuate over shorter periods of time and a “higher return” means assuming more risk. While markets and investments can and will go down for sustained periods, asset diversification and allocation to match economic and market conditions increases the likelihood of a positive rate of return.
The goals of the Operations Reserve Fund and the Programs Reserve Fund investment objectives are the same. First, they provide a source of reserve funds for the Fund’s associated coverage area. Although neither are anticipated to be used in any given year, both should maintain adequate levels of liquidity to provide the necessary level of distributions for the associated coverage area. Accordingly, the second investment objective for these funds is to achieve low-volatility at a low risk while still providing for modest appreciation of assets.
The Foundation’s spending policy and investment strategy are designed to work together to preserve the inflation adjusted value of the endowment portfolio over time. The CBC Foundation Board of Directors has adopted a spending policy of at least .5%, but no more than 5% of the fair market value of the endowment pool.
Endowments are intended to be held in perpetuity; therefore spending typically comes from accumulated earnings from investment performance. Spending from new endowments cannot occur immediately unless the donor specifies a certain amount as non-endowment and available for immediate appropriation. Generally, spending will not begin on an endowment for at least a 12-month period to allow for earnings accumulation.
In the event an endowment falls underwater the Foundation will suspend spending from that project. In periods of exceptional growth, the surplus earnings allocated to an endowment are based on each projects’ prorated share of the total investment pool. Earnings in excess of spending and administrative fee are added to the endowment project balance. This “real growth” provides a cushion to fund spending and fees during times of poor market performance.
Funds Functioning as Endowments (FFE) will have available for expenditure each year until all funds are expended. The Foundation staff will evaluate the status of each FFE and make recommendations for distribution. In no case will the recommendation exceed 25% of the total FFE pool available in any given year.
The Foundation will assess a fee on new endowments of 5% of the value. The Foundation will also assess a fee of 1.5% on the value of the Foundation Fund as of the end of the fiscal year (June 30) and distributed in four equal quarterly payments to the Operations bank account on July 15, October 15, January 15, and April 15.
Operations Reserve Fund and Programs Reserve Fund
These two funds are established as reserves. As such, it is not anticipated that these funds will provide any distributions in most years. However, when the Foundation determines it prudent to withhold or reduce the distributions from the Foundation Fund, then the Foundation may additionally direct that operations funding and programmatic funding be supplemented through the applicable Operations Reserve Fund or Programs Reserve Fund.
ASSET ALLOCATION STRATEGY
The Foundation’s portfolio risk, return, and liquidity posture are, in large part, a function of the asset classes held. In an effort to maximize rate of return, the Foundation will invest in a variety of asset classes.
Portfolios are not limited to, but may include the following primary and sub-asset classes.
US Large Capitalization Stocks; S&P 500 TR
US Middle Capitalization Stocks; S&P 400 TR
US Small Capitalization Stocks; S&P 600 TR
International Large Capitalization Stocks; MSCI EAFE NR
International Middle Capitalization Stocks; MSCI EAFE NR
International Small Capitalization Stocks; MSCI EAFE NR
Emerging Market Large Capitalization Stocks; MSCI EM NR
Emerging Market Middle Capitalization Stocks; MSCI EM NR
Emerging Market Small Capitalization Stocks; MSCI EM NR
Publicly Traded Real Estate Investment Trusts; S&P US REIT TR
Fixed Income Investments
US Corporate Bonds; BbgBarc US 1-5Year Corp Bond Index
US Government Bonds; BbgBarc US 1-5 Govt Bond Index
Global Bonds; FTSE WGBI 1-5 NR
Inflation Protected Bonds; BbgBarc US 0-5 Year TIPS Index
Mortgage Backed Securities ; BbgBarc US MBS Float Adj
Certificates of Deposit; US Treasury Bill (Applicable Term)
Tax-free Municipal Bonds; BbgBarc Municipal Bond Index
Stable Value Funds; US Treasury 3 Month Bill
Money Markets; US Treasury 3 Month Bill
The Foundation Board prohibits the following assets and transactions unless prior authorization has been granted by the finance committee.
Real Estate Investments (Non-marketable)
ASSET CLASS TARGET
Asset classes are approved within the following ranges. The Investment Advisor shall provide a target to be reviewed annually and approved by the Investment and Finance Committee.
Min - 40%
Max - 70%
Min - 30%
Max - 60%
Cash and Equivalents
Min - 0%
Max - 10%
OPERATIONS RESERVE FUND and PROGRAMS RESERVE FUND
Min - 20%
Max - 50%
Min - 50%
Max - 80%
Cash and Equivalents
Min - 0%
Max - 10%
Rebalancing occurs when market conditions cause the actual asset mix to change from the target percentages. The Investment Advisor shall provide a rebalancing policy which the Investment and Finance Committee will approve.
Review, Measurement, and Reporting
The Foundation shall evaluate the portfolio against relevant benchmarks. All portfolio holdings shall be compared to their equivalent benchmarks for monitoring performance on an ongoing basis.
The Foundation will immediately notify the Investment Advisor of any material changes in the financial situation that could affect risk tolerance, time horizon, liquidity needs, income needs or return requirements.
The Investment and Finance Committee will review the Investment Policy Statement annually. Following full-board approval, the Investment Policy Statement will be provided to the Investment Advisor with the current policy superseding all previous Investment Policy Statements.
The Investment Policy Statement has been read and approved by the Columbia Basin College Foundation Board of Directors on May 18, 2023.