South Plains College Foundation Investment Report

To download a copy of the SPC Foundation's Annual Investment Report, click on the appropriate link below.

Annual Investment Report, August 31, 2007 (MS Word Document)

South Plains College Foundation Investment and Spending Policy

Purpose

The South Plains College Foundation is a publicly-supported foundation whose purpose is to attract charitable contributions, prudently invest and administer foundation funds, and financially support the objectives of the Foundation.

The purposes of this Investment & Spending Policy are to:

1. Establish the philosophy and investment objectives for the Foundation, its Board of Directors, donors, grantees and investment managers.
2. Serve as the basis for assessing and monitoring the performance and progress of each investment manager.

Responsibilities

The Board of Directors of the South Plains College Foundation has, in addition to its other responsibilities, the responsibility for the following:

(a) Establishing overall financial objectives and the setting of investment policy, within the scope of their authority.
(b) Obtaining high quality investment management.
(c) Monitoring performance to see if the objectives are being met and if policy and guidelines are being followed.
(d) Recommending appropriate action if objectives are not being met or if policy and guidelines are not being followed.

The investment manager(s) will be responsible for determining the investment strategy and implementing security selection within the policy and guideline limitations.

Scope

This Investment Policy statement applies only to those assets for which the investment manager(s) and the Foundation have discretionary authority.  For other assets, the investment policies are continued within the individual donor agreements.

Investment Objectives

Investment Management Guidelines

Asset Allocation

It is expected that the investment portfolio will be well-diversified among equity securities, fixed-income securities and cash equivalents.  Consistent with the investment objectives previously defined, the following asset mix parameters have been determined:

          Equities may comprise 20% to 65% of assets.

Fixed-income securities (excluding cash reserves) should generally comprise 30% to 75% of total assets, but may be more or less depending on analysis of market conditions.

          Cash equivalents may comprise no more than 25% of total assets.

It is expected that the asset mix will be altered to either reduce market risk or optimize opportunities to capitalize on expected market movement.  The investment manager(s) will have discretion with regard to individual asset selection, although risk should be minimized through prudent diversification, both among individual assets and by asset class.

Philosophy - Equity Investments

A. The management policy to be followed should be disciplined and consistent.  It should accommodate all those events and occurrences considered reasonable and not contrary to the philosophy of the South Plains College Foundation, which is to invest funds at a prudent level of risk.

B.  Policies applying to equity investments:

C. The investment portfolio should be diversified as to equity holdings.

The purpose of this diversification is to provide reasonable assurances that no single security or class of securities will have a disproportionate impact on the total portfolio.  Diversification will also be achieved by using two or more managers whose styles and investment strategies are sufficiently distinctive to justify their employment.

Philosophy - Fixed Income Investments

A. Policies applying to fixed income securities:

Tax Considerations

The South Plains College Foundation is a 501(c)(3) corporation.  Therefore, tax-exempt securities are not appropriate.

Review Procedures

The investment manager(s) or their representative will meet with the Foundation Board of Directors at least annually for the purpose of evaluating the continuation of investment manager(s).  The evaluation of the manager(s) will focus on:

* Adherence to investment policies and guidelines.
* Appropriate communications and reporting to the SPC Foundation.
* Comparison of investment results against relevant market indices.
* Cost of investment manager services.
* The current market outlook.

Spending Policy

Based on the above-stated objectives, the current spending policy shall be expressed as a maximum of 5% of a three-year moving average of the market value of the Foundation.  Such a policy will allow for greater predictability of spendable income for budgeting purposes and for gradual, steady growth for the support of objectives by the investable assets.  In addition, this policy will minimize the probability of invading the principal over the long term.

Since there may occasionally be situations requiring a higher percentage of spending from investable assets, in order to assure the short-term economic viability of the objectives, the Finance Committee is authorized to increase the spending rate as necessary on a temporary basis.  Such an increase should not be undertaken without clearly justifiable cause and in no case shall exceed the 6% level without explicit approval of the Board of Directors since spending above this level results in an increasing probability of invasion of the principal value of investable assets in real terms.