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Investment Info

Our intention is to communicate the variety of ways in which a relationship with the Foundation can assist donors, and indeed greatly benefit them in their charitable giving endeavors.

We also address how ETF can support professional advisors and their clients at every step in the charitable giving process.

STEWARDSHIP OF RESOURCES/THE INVESTMENT COMMITTEE

East Tennessee Foundation is entrusted with the investment management of its funds and with carrying out the grantmaking wishes of its donors in the best interests of East Tennessee communities. Because the Foundation expects to operate in perpetuity, wise stewardship of the funds entrusted to it is essential to the Foundation's mission.

To that end, the Board of Directors has adopted an investment policy and appoints an Investment Committee to manage and make all decisions on the Foundation's investments. Members of the Investment Committee are chosen for their business and financial management experience and expertise. Current members are Charles M. Peccolo, Jr., Chair, Vice President and Treasurer, University of Tennessee; Joseph K. Ayres, Managing Director of Cumberland Securities; Michael C. Crabtree, President & CEO, IdleAire Technologies Corporation; A. David Martin, President of Martin & Co.

To ensure its accountability to donors, beneficiaries, and the region, East Tennessee Foundation seeks through its investment policy to maintain or increase the real value of the endowment principal and its distributions over the long-term while funding current needs at an appropriate level. To carry out this mission within the philosophy of the Foundation, the Investment Committee will establish investment objectives and strategies of equity, fixed income, cash and non-traditional investments as it determines appropriate. Because continued income from its funds is of utmost importance to the Foundation and the community, the Foundation's investment priorities are:

  1. Preservation of principal
  2. Moderate growth in principal to offset the effects of inflation
  3. Sufficient income commensurate with safety of principal and current program needs

The Investment Committee reviews the Foundation assets and the status of its investment accounts quarterly and makes such adjustments as it deems necessary to achieve the Foundation investment objectives. Specifically, the Investment Committee:

  1. Establishes target asset mix and spending plan consistent with investment objectives;
  2. Approves selection and dismissal of investment managers and investment alliance partners;
  3. Determines investment performance objectives and guidelines for each investment manager and investment alliance partner; and,
  4. Monitors investment performance in comparison to investment objectives as well as manager and alliance partner performance versus established benchmarks.

The Foundation has adopted a policy of investing endowment and other funds over which it has full investment discretion in commingled management accounts. This pooling of investments supports closer supervision of the investment portfolio and makes available to all eligible endowment and other funds regardless of size, the advantages of participation in a diversified portfolio of investments. The long-term commingled fund represents the major portion of the funds for long-term investment. Within the overall investment objectives, the investment performance goal for management of the long-term commingled fund is to provide better than average returns on investments over the longer term.

Currently, ETF's equity and alternative investments are with The Investment Fund for Foundations (TIFF). TIFF is a member-controlled, not-for-profit cooperative founded by a nationwide network of Foundations. The fixed income investments are with the PIMCO Total Return Fund. The target asset allocation among asset classes is 40% in U.S. equities, 15% in international equities, 25% in fixed income, 10% in an absolute return pool, and 10% in private investments.

INVESTMENT ALLIANCE PROGRAM - In 2003, the Foundation created the Investment Alliance Program for approved investment firms. The purpose of this program is to increase charitable giving in East Tennessee through a cooperative partnership between the Foundation and selected investment management firms.

Clients who wish to establish a charitable fund in excess of $250,000 are welcome to suggest to the Foundation's Investment Committee that the assets be managed by the investment firm or manager they prefer. The Foundation would then begin a formal business relationship with qualified Investment Alliance partners. Investment advisor-client relationships remain intact, and Alliance partners are able to add the charitable giving flexibility of Foundation expertise to the list of services they can provide their clients.

Additional information about the Foundation's investments with The Investment Fund for Foundations, PIMCO, and its Investment Alliance Partners, including a list of individual investment managers, investment manager expense ratios, and historical investment performance is available to the public. Please submit a written request to Carolyn Schwenn, Senior Vice President for Finance and Administration at the Foundation, in order to receive the above-mentioned information.

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