Audits, investments and managing assets

We carefully manage our assets with three key goals in mind: 

  1. maximize grant dollars right now for current needs 
  2. limit the effects of the ups and downs of the market on our fundholders and nonprofits, and
  3. ensure that all endowments here will last forever.  

The community foundation's spending policy and asset investment assure that we accomplish these goals. 

Spending policy: we follow a consistent formula

Before the 1980s, many universities and foundations spent most of their endowment investment returns each year. If the market was good, so was their spending. If it was so-so, they had less to spend, and if the market was bearish, the institution suffered and/or ate into principal.

In the late 1980s, financial researchers, reviewing the equities market back before the Great Depression, discovered the "Spending Rule". 

The Spending Rule promises a steady flow of money to spend through good times and bad and growth in real dollars (e.g. taking inflation into account), assuming a balanced and well-invested portfolio.

To meet the Spending Rule, Hampton Roads Community Foundation restricts our annual distributions to 4-1/2% of a fund's average balance over the previous 12 trailing quarters. Additional investment returns are returned to the fund. Similarly, if investment returns fall below 4-1/2%, the fund can draw on the "rainy day" monies. 

The fundholder knows his or her fund will last forever, and that the grants will far outreach the original donation. Nonprofits can count on steady grants, especially during tough times, just when they need them most. Students and their families know their scholarships will be there for them. 

Investment is a key to our work and your goals

Our board of directors and its investment committee oversee our investments. 

The community foundation's dedicated investment manager is Spider Management CompanyLLC, a wholly-owned subsidiary of the University of Richmond. Twenty-four nonprofits co-invest assets with Spider Management.

Affiliating with Spider and the University of Richmond has two major advantages:

  1. ?Spider manages approximately $3.8 billion in assets and provides us access to a mature, well-diversified investment portfolio managed by a professional staff with an excellent performance record.
  2. The University of Richmond's endowment investment return has historically ranked in the top quartile of its peers, according to the National Association of College and University Business Officers.

For information about our investment program, contact Tim McCarthy, chief financial officer, at (757) 622-7951 or tmccarthy@hamptonroadscf.org.

Financial and legal documents

Key numbers

The community foundation:

  • manages more than $308 million in assets
  • invests 96.6% of our portfolio with Spider Management
  • earned a net return of 1.55% for the year ended December 31, 2015 vs. the S&P 500, which lost 0.7%
  • had a low ratio (0.52%) of supporting expenses to average total net assets in 2015