EFTA01851906.pdf

Individually Managed Fund Agreement ‘ ..,S)ILICON VALLEY community foundation- Silicon Valley Community Foundation offers donors the opportunity to recommend investment managers or firms to manage donated assets through its Individually Managed Fund policy ("IMF"). Recommended Individually Managed Fund investment manager or firm: Primary Contact Name: Firm Name: Address: Phone: Email: Investment performance will be monitored quarterly by the community foundation's investment consultant, investment committee and staff. The community foundation may replace the investment manager at its sole discretion, any time and for any reason, including, but not limited to i) personnel or organizational changes at the investment manager, substandard performance, excessive fees, iv) deviation from the terms of the IMF policy, or v) conflicts of interest or questionable ethical behavior. Before terminating a manager, appropriate due diligence will occur. The fund advisor(s) will be notified before or after termination depending on circumstances. Investment performance, volatility and expenses of the assets managed by the recommended investment manager may not be comparable with investment options of the same investment objective offered by the community foundation. In addition to the regularly scheduled support fees, as detailed in the fund agreement, the community foundation charges the following fees to lisr1Fs: • One time set-up fee of $1,000 • Annual investment oversight fee of: Fund Balance Investment Oversight Fee $2.5 million and above 0.05% $1.0 to below $2.5 million 1.00% Under $1 million (for 6 Assets transferred to investment pools at the consecutive months) community foundation Name of Fund: ❑ New Fund ❑ Existing Fund # Fund Advisor Signature Date EFTA R1_00248319 EFTA01851906  i ) ,,SILICON VALLEY community foundation- Individually Managed Funds Policy Introduction Silicon Valley Community Foundation is pleased to provide donors the option of a customized investment approach by recommending a preferred investment advisor of their choice. This approach allows donors and their investment advisors to maintain their professional relationships while furthering the donor's philanthropic goals. Minimums Fund size minimums vary based on the make-up of the investment portfolio. For portfolios holding traditional assets such as publicly traded equity and fixed-income securities, mutual funds and exchange traded funds, the minimum fund size is $3 million. Inclusion of alternative investments such as private equity and hedge funds will be considered on a case-by-case basis for a minimum fund size of $10 million. Approval Process The community foundation will work with the recommended advisor to establish an asset allocation that is a Iriate to the donor's • antmakin s and time horizon ent s The investment committee generally meets quarterly. Every effort will be made to evaluate proposals in a timely manner, however, evaluation and approval may take up to three months to complete. The advisor's proposed investment strategy should address the following points: • Qualifications and credentials of the advisor, team and firm. • Advisor's investment philosophy, approach and rebalancing process. • Proposed target asset allocation, policy ranges and performance benchmark. • Proposed investments for each asset class, including expenses, historical performance and proposed performance benchmarks. • Fees charged by the advisor and in total for the portfolio. • Sample investment management and custodial agreements. Fees Silicon Valley Community Foundation assesses support fees to cover the cost of administration and to continue its important work in our community. Fees provide the necessary resources to operate efficiently and effectively, ensuring fiscal responsibility in grant due diligence, donor and nonprofit education, research and other activities. A one-time setup fee of $1,000 is required to cover expenses associated with investment advisor due diligence and establishing new investment accounts. Each fund is charged 0.05% for investment oversight to help defray the cost of administration. Funds with balances below $2.5 million will be assessed a 1% investment oversight fee. One-twelfth of support and investment oversight fees are assessed monthly based on average fund balance. Please refer to the current schedule of Support Fees for additional information. 12.06.12 Page 1 of 10 EFTA_R1_00246320 EFTA01851907 Fund Balance Minimums Funds with balances under $1 million for six consecutive months will be transferred to the investment pools offered by the community foundation. Responsibilities All assets are under the sole control of the community foundation. As such, all investment decisions must be made by the community foundation. Investment performance will be reviewed quarterly by the community foundation's staff and investment committee. The investment advisor may be replaced at any time and for any reason, including but not limited to deviation from the terms of this policy, ethical or legal violations, performance which does not meet or exceed established benchmarks over a period of time, excessive fees or key staff changes. Investment Advisor Responsibilities The fund's investment advisor and underlying investment managers are held to the same high standards the community foundation employs for all its investment managers: 1. Following the Prudent Investors guidelines that arc widely used in the investment management industry. These include but are not limited to fiduciary standards described in the Uniform Prudent Investor Act (UPIA), the Uniformed Prudent Management of Institutional Funds Act (UPMIFA) and the Global Investment Performance Standards (GIPS) that are promulgated by the Investment Performance Council of the CFA Institute. 2. As fiduciaries, all managers are expected to uphold the highest ethical standards and to carry out their investment responsibilities in order to promote the best interest of Silicon Valley Community Foundation. 3. Immediately reporting any findings against the firm or its principals, either by the SEC or any other regulatory authority. In addition, any lawsuits brought against the firm or its principals related to the firm's business activities should also be immediately reported to the community foundation. 4. Preparing quarterly written statements, including actions taken in the portfolio and expected changes in the portfolio. 5. Directing proxies to the community foundation or its delegate as instructed. If left to the manager, all proxies should be voted to increase shareholder value unless directed by the community foundation to do otherwise. 6. Attending meetings with the community foundation staff, its consultant and investment committee as needed. 7. Adhering to the investment strategy and policy for which the advisor was hired. 8. Executing all transactions in the best interests of its clients. This usually involves obtaining the best net realized price for a purchase or a sale. It also includes using commissions to obtain research or other services that arc expected to enhance both the investment process and the returns. 12.06.12 Page 2 of 10 EFTA_R1_00246321 EFTA01851908 9. Immediately communicating all pertinent changes to the community foundation. This includes, but is not limited to: • Changes in personnel involved in the community foundation's relationship • Changes in ownership • Changes in senior investment professionals' responsibilities • Changes in investment style or process • Similar significant changes at underlying investment managers Performance Reporting The community foundation will compute and evaluate investment performance on a time weighted basis, net of fees, against the two benchmarks indicated in Appendix A. The investment advisor will independently report performance at least quarterly, on a time weighted basis and net of fees, against the same or similarly constructed benchmarks. Advisor Acknowledgement The undersigned investment advisor(s) to the fund at Silicon Valley Community Foundation acknowledges receipt and agreement with this policy and its appendices. Investment Advisor Date Investment Advisor Date 12.06.12 Page 3 of 10 EFTA_R1_00248322 EFTA01851909 Appendix A — Investment Guidelines Asset Allocation The community foundation believes asset allocation and regular rebalancing arc primary driven of consistent performance and that individually managed funds should follow an asset allocation strategy that is largely identical to that of other funds of similar size, time horizon, spending policy and risk profile. Investment advisors will propose an investment strategy that is appropriate to the size of the fund and aligned with the donor's philanthropic goals. The proposed strategy will employ a diversified mix of asset classes and investment styles. Portfolios will be monitored for consistent application of the investment strategy. Advisors are encouraged to use a format similar to the example below for proposing the investment strategy and allocation, the details of which will vary based on fund size, donor objectives and advisor strategy. Example Proposal Format Asset Class Investment Benchmark Allocation Target Range Fee Structure Total Fixed Income $ 3,000,000 30% 20-40% U.S. name benchmark $ 2,000,000 20% 15-40% mngd acct 0.80% Global name benchmark $ 1.000.000 10% 0-20% mutual hind 0.92% U.S. Equities $ 4,700,000 47% 4040% Large Cap name benchmark $ 2,500,000 25% 20-30% mngd acct 1.00% Mid Cap name benchmark $ 1,300,000 13% 10-20% mngd acet 1.00% Small Cap name benchmark $ 900.000 9% 5-15% mngd acct 1.00% Non-U.S. Equities $ 2,000,000 20% 10-30% Developed Markets name benchmark $ 1,500,000 15% 10-20% mngd acct 1.00% Emerging Markets name benchmark $ 500,000 5% 0-10% mutual hind 1.00% Altema0velOther $ 300,000 3% 0-5% strategy name name benchmark $ 300,000 3% ETF 0.75% name benchmark S 0% TOTAL $ 10,000,000 100% Total Expenses: 0.94% Performance Reporting The community foundation will compute and evaluate investment performance on a time weighted basis, net of fees, against a "market benchmark" that best approximates the portfolio's exposure to risk using a simple mix of stocks and bonds, and against a "composite benchmark" that is comprised of various indices weighted by the target allocation to each asset class represented in the portfolio. Investment advisors should use the table below to indicate proposed benchmark weightings. The investment advisor will independently report performance at least quarterly, on a time weighted basis and net of fees, against the same or similarly constructed benchmarks. The advisor may utilize additional benchmarks. 12.06.12 Page 4 of l0 EFTA_R1_00246323 EFTA01851910 Performance Benchmarks Investment advisors should use the following table to indicate the proposed benchmark weightings. 1. Market benchmark: % S&P 500 Index / % Barclays Capital U.S. Aggregate OR: % MSCI AWC / % Barclays Capital U.S. Aggregate 2. Composite benchmark (weighted by target asset allocation to each asset class): Asset Class $enchmark Equity U.S. Large Cap Equity S&P 500 U.S. Mid Cap Equity Russell Midcap U.S. Small Cap Equity Russell 2000 Foreign Developed Equity MSCI EAFE Emerging Markets Equity MSCI Emerging Markets Free Fixed Income U.S. Aggregate Bonds Barclays Capital U.S. Aggregate Global Bonds Citigroup World Government U.S. High Yield Bonds Merrill Lynch High Yield Master Treasury Inflation Protected Securities Barclays Capital U.S. Treasury: U.S. TIPS Intermediate Term Bonds Barclays Capital U.S. Aggregate Intermediate Short Tcrm Bonds Citigroup Govt./Credit 1-3 Year Alternatives/Other Cash Cash and Equivalents U.S. Treasury Bills 100% Total 12.06.12 Page 5 of 10 EFTA_R1_00246324 EFTA01851911 Appendix B - Investment Guidelines by Asset Class The community foundation has adopted the following guidelines and restrictions for each asset class as listed in Appendix A. The guidelines below apply to separate accounts managed by the advisor or by managers selected by the advisor to the extent that a particular asset class is included in the portfolio. For mutual funds and commingled funds, restrictions are established by the offering documents for each investment. I. Domestic Equity (Large/Mid/Small Capitalization) • The domestic equity portfolio will be diversified according to economic sector, industry, number of holdings and other investment characteristics. However, it is recognized that any actively managed portfolio will not be as diversified as the market. To produce overall diversification, equity managers will be selected to employ different management strategies, which together achieve the desired degree of diversification. • Domestic equity managers are permitted to hold up to 10 percent (10%) of the portfolio in American Depository Receipts ("ADRs") or foreign domiciled companies whose equity securities arc traded in U.S. markets. • No more than seven percent (7%) at cost or 10 percent (10%) at market of the manager's portfolio may be held in the securities of a single issuer. • The community foundation does not apply strict rules to define small, middle or large capitalization stocks. However, it is expected that the weighted average market capitalization of each managers' portfolio will be within 25 percent (25%) of their primary market benchmark. • Short selling of securities is prohibited. • Derivative instruments such as financial futures and options may not be used without the prior approval of the community foundation. • A manager may only deviate from these guidelines with the advance permission of the community foundation. 2. International Equity (Developed and Emerging) • The following definitions should be used to distinguish between developed and emerging markets securities: International Developed Equity Listed equity securities traded on developed non- U.S. markets. Developed markets are defined as those included in Morgan Stanley's SAFE index plus Canada. Emerging Markets Equity): Listed equity securities traded on emerging non-U.S. markets. Emerging markets are defined as any market not included in Morgan Stanley's EAFE index plus Canada. 12.06.12 Page 6 of 10 EFTA R1_00246325 EFTA01851912  • 'The portfolio will be diversified according to economic sector, industry, number of holdings and other investment characteristics. However, it is recognized that any actively managed portfolio will not be as diversified as the market. To produce overall diversification, equity managers will be selected to employ different management strategies, which together achieve the desired degree of diversification. • For managers who arc hired to invest in developed markets, securities within the portfolio must be held in a minimum of three countries at all times with no more than 30 percent (30%) of the portfolio to be held in emerging markets countries. For managers hired to invest in emerging markets, securities within the portfolio must be held in a minimum of three countries at all times. • No more than seven percent (7%) at cost or 10 percent (10%) at market of the portfolio may be held in the securities of a single issuer. • Short selling of securities is prohibited. • Currency exposure may be hedged back to the U.S. dollar. The decision to hedge is left to the manager's discretion. 3. Alternative Investments Alternative investments such as hedge funds, real estate, real assets and private equity will be considered on a case by case basis for funds of $10 million or more. 'These investments will be made via limited partnerships and commingled funds. Therefore, restrictions are established by the offering documents for each investment. Please refer to Exhibit C for hedge funds specifically. 4. U.S. Fixed Income • The duration of the portfolio should be within 25 percent (25%) of the duration of the manager's market benchmark. • The portfolio may invest in the following classes of fixed income securities: Bonds or notes issued by the U.S. Government or a U.S. Government Agency backed by the full faith and credit of the U.S. Government Mortgage-backed securities Corporate bonds issued in the U.S. and denominated in U.S. dollars Asset-backed securities Non-U.S. bonds or notes issued by either foreign governments or corporations, subject to limitations noted below. • Investment grade bond managers are expected to maintain an average quality rating for their portfolio that does not fall below an S&P rating of AA-. High yield bond managers are expected to maintain an average quality rating for their portfolio that does not fall below an S&P rating of B-. For securities not rated by S&P, classification by other major ratings 12.06.12 Page 7 of 10 EFTA_R1_00246326 EFTA01851913  agencies will be used. If securities are un-rated, the Foundation will assess risk and compliance with this policy based on the portfolio's strategy. For the purpose of calculating average quality ratings, securities issued or fully backed by the full faith and credit of the U.S. Government shall be considered AAA. • For investment grade managers, up to 20 percent (20%) of the portfolio's duration weight may be held in below investment grade securities. • Up to 25 percent (25%) of the portfolio's duration weight may be held in the securities of foreign issuers. It is expected that the preponderance of the currency exposure associated with these holdings will be hedged. • No more than five percent (5%) at market of the portfolio may be held in the securities of a single corporate issuer. This restriction does not apply to securities issued by the U.S. Government or a U.S. Government Agency backed by the full faith and credit of the U.S. Government. • Derivative instruments may be utilized by the manager in order to obtain more efficient exposure to a specific type of security. However, at no time may derivative instruments be used to leverage the portfolio. In addition, it is expected that a manager will have thoroughly tested the behavior of the derivative instrument under a variety of market conditions before purchasing the instrument for the portfolio. 5. Global Fixed Income • The duration of the portfolio should be within 25 percent (25%) of the duration of the manager's market benchmark. • The portfolio may invest in the following classes of fixed income securities issued by U.S. or non-U.S. entities: Government bonds or notes Mortgage-backed securities Corporate bonds issued in the U.S. and denominated in U.S. dollars Asset-backed securities • The manager is expected to maintain a weighted average quality rating for the portfolio that does not fall below an S&P rating of AA-. For securities not rated by S&P, classification by other major ratings agencies will be used. If securities are un-rated, the Foundation will assess risk and compliance with this policy based on the portfolio's strategy. For the purpose of calculating average quality ratings, securities issued or fully backed by the full faith and credit of the U.S. Government shall be considered AAA. • Up to 20 percent (20%) of the portfolio's duration weight may be held in below investment grade securities. • No more than five percent (5%) at market of the portfolio may be held in the securities of a single corporate issuer. 12.06.12 Page 8 of 10 EFTA_R1_00246327 EFTA01851914  • Derivative instruments may be utilized by the manager in order to obtain more efficient exposure to a specific type of security. However, at no time may derivative instruments be used to leverage the portfolio. In addition, it is expected that a manager will have thoroughly tested the behavior of the derivative instrument under a variety of market conditions before purchasing the instrument for the portfolio. 6. Cash and Equivalents • A key objective for cash investments is to maintain price stability at all times although this is not guaranteed. • The weighted average maturity of the money market securities segment of the portfolio will generally be less than or equal to 90 days. Certificate of Deposits will be purchased using a laddered approach to maturities which could involve the use of longer maturities, although this portfolio will be structured to maintain adequate liquidity for the pool as a whole. • Within the money market securities segment, the portfolio will generally be invested in money market securities that are in the highest ratings categories for short-term instruments. Furthermore, the portfolio may invest in the following: ▪ Obligations of the U.S. Government (including its agencies and instrumentalities) Short-term corporate debt securities of domestic and foreign corporations ▪ Obligations of domestic and foreign commercial banks, savings banks, and savings and loan associations ▪ Commercial paper 12.06.12 Page 9 of 10 EFTA_R1_00246328 EFTA01851915 Appendix C - Alternative Investment Guidelines Alternative investments include private equity, real estate, commodities and hedge funds. In general, alternatives will only be considered if the investment in question is one that the community foundation would add to its own portfolio. Proposed investments in alternative asset classes will be considered on a case-by-case basis. Hedge Fund Guidelines • No more than 20 percent (20%) of the donor's fund may be invested in hedge funds. • Fees will not exceed 2% plus 20% of the profits for individual hedge funds. • Fees will not exceed 1%, inclusive of any expected carry, for hedge fund-of-funds. • The hedge fund portfolio must be sufficiently diversified. For example, a minimum of two fund- of-funds or four individual fund managers with different investment strategies is preferable. Proper diversification is also dependent on the size of the allocation within the overall portfolio with larger manager counts needed for larger allocation sizes. • Historical performance of the fund must be at least 200 basis points per annum ahead of the HFRI Fund of Funds Index over multiple time periods—five years minimum. • Fund-of-funds managers may not offer their own hedge funds, provide service of any kind to hedge fund managers in the portfolio, or accept compensation of any kind from hedge fund managers, thereby avoiding conflicts of interest. This restriction effectively eliminates most investment bank offered funds due to their prime brokerage businesses. • Fund managers must supply the community foundation with monthly statements summarizing performance, investments and activity. • Fund-of-funds will not use leverage at the fund-of-funds level. • Fund-of-funds managers will limit total assets to a reasonable level (e.g., under $5 billion). • Lockup periods will not exceed 12 months. 12.06.12 Page 10 of 10 EFTA_R1_00246329 EFTA01851916  Advised Fund Agreement Type of Fund Silicon Valley Community Foundation O Establish a New Fund O Donor Advised www.siliconvalleycf.org O Update Fund Information O Committee Advised O Memorial O Scholarship: O Donor Involved O Foundation Managed Name of Fund e.g.. Smith Family Fund a Eucalyptus Fund Primary Contact Information Additional Contact Information Role: (Select only one primary contact on this form. Check all that apply.) Role: iCoeck all that apply.) O Fund Advisor Individual has run advisory privileges over a fund. including O Fund Advisor Individual has lull advisory privileges over a fund. including want iecommendabons, investment recommendations, naming of successor grant recommendations, investment recommendations. naming of successor advisors and other lund adminstratico advisory privileges. advisors and other lund administration advisory privileges. ❑ Secondary Advisor Individual oas full advisoty pnvileges over grant recommendations out no other lund administration advisory privileges. O Fund Representative Individual has access to fund information Cul no athOSOly privileges Name 0Male 0 Female Name 0 Male 0 Female Mailing Address 0 Home 0Business Mailing Address 0 Home 0 Business City State Zip City State Zip Business Phone Business Phone Home Phone Mobile Phone Home Phone Mobile Phone Email Address Email Address Company Name Company Name Title Title Date of Birth Date of Birth For Internal Use Only For Internal Use Only O Establishing Donor ❑ Establishing Donor O Founder O Founder Advised Fund Agreement page 1 of 4 EFTA_R1_00246330 EFTA01851917  Advised Fund Agreement Referral Information Referred to Silicon Valley Community Foundation by Professional Advisor's Company and Title Relationship Mailing Address ❑ Add my professional advisor as a fund representative. City State Zip Phone Email Donor Advised Fund Successor Election (Optional) Fund Advisors may create a succession plan for the fund by appointing a maximum of two successor advisors. Successor advisors assume the privilege to advise a fund only after all of the initial fund advisors are unwilling or unable to exercise their privilege to do so. Please refer to the Fund Terms and Conditions for additional information for eligibility requirements. ❑ I do not wish to name successor advisor(s). Successor Information Successor Information Name ❑ Male ❑ Female Name ❑ Male ❑ Female Mailing Address Mailing Address City State Zip City State Zip Home Phone Mobile Phone Home Phone Mobile Phone Date of Birth Date of Birth Preferred Email Address Preferred Email Address Relationship to Fund Advisor(s) Relationship to Fund Advisor(s) Questions? Contact the development department at [email protected] or call 650.450.5444. Advised Fund Agreement page 2 of 4 EFTA_R1_00246331 EFTA01851918  Advised Fund Agreement Fund Creation Investment Allocation Initial gift to establish a fund: $ Please refer to the attachments regarding investment pool information ❑ Check made payable to Silicon Valley Community Foundation and allocation. If you need additional information, please contact the community foundation. ❑ Securities (Please complete the Securities Transfer Letter) ❑ Publicly Traded ❑ Privately Held' ❑ Restricted' ❑ I have completed the Investment Allocation form. ❑ Wire' ❑ I would like to request an Individually Managed Fund and have completed the form. ❑ Other' Please describe the gift (interfund transfer, credit card, personal property, real estate, testamentary): Grantmaking Each grant made from an advised fund is mailed with a custom grant award letter. *Additional information will be required. Please contact the community Specify below how you would like the name(s) of the fund advisor(s) to appear in the custom grant award letter: foundation at 650.450.5444. Community Endowment Fund e.g.. Mr. and Mrs. Mark Smith. Jane and Mark Smith. The Smith Family The Community Endowment Fund is a permanent charitable resource ❑ Please make all grants from the fund anonymous. that grows through your support and provides invaluable funding to local nonprofit organizations. When you give to the endowment, you are Note: Anonymity can be customized on a grant by grant basis. helping to meet the needs of our community today and for years to come by supporting Santa Clara and San Mateo counties in perpetuity. Acknowledgement by Nonprofits ❑ I would like to make an additional gift to the Mail the community foundation receives for the fund will not be forwarded. However, organizations that have received grants may Community Endowment Fund: $ wish to send information to you directly. Please indicate your contact preference for the custom grant letter (select one): Total gift to the community foundation: ❑ Provide my home address. ❑ Provide my business address. ❑ Do not provide my address. Questions? Contact the development department at [email protected] or call 650.450.5444. Advised Fund Agreement page 3 of 4 EFTA_R1_00246332 EFTA01851919  Advised Fund Agreement Acknowledgement and Signatures I acknowledge that I have read the Silicon Valley Community Foundation Support Fees and Minimums and Fund Terms and Conditions and agree to the fees, terms and conditions described therein. I understand any contribution, once accepted by the community foundation's board of directors, represents an irrevocable gift to Silicon Valley Community Foundation. The community foundation's board of directors has variance power under IRS regulations, and this gift is not refundable to me. I hereby certify, to the best of my knowledge, all information presented in connection with this form is accurate, and I will notify Silicon Valley Community Foundation promptly of any changes. Signature Signature Print Name Print Name Date Date Silicon Valley Community Foundation Signature Authorized Signature Title Print Name Date Special Instructions Planned Gifts 0 I have remembered the community foundation in Please return this form to: my estate plans. Silicon Valley Community Foundation O I would like more information on how to include the Attention: Development Department community foundation in my estate plans. 2440 West El Camino Real, Suite 300 Mountain View, California 94040-1498 Phone: 650.450.5444 I Fax: 650.450.5401 I [email protected] Questions? Contact the development department at [email protected] or call 650.450.5444. Updated June 2012 Advised Fund Agreement page 4 o14 EFTA_R1_00246333 EFTA01851920  Investment Allocation Silicon Valley Community Foundation www.siliconvalleycf.org Please indicate your recommended investment allocation below. Refer to the Investment Options information sheet for a detailed description of each investment pool. Name of Fund e.g.. Smith Family Fund or Eucalyptus Fund ❑ New Fund ❑ Existing Fund # You may allocate your contribution to one or more of the following five investment pools. The total must equal 100%. % Long-Term Growth For funds that will be invested seven or more years % Social Impact For funds that will be invested seven or more years % Balanced For funds that will be invested three to seven years % Short-Term For funds that will be distributed in one to three years % Capital Preservation For funds that will be distributed in one year or less 100% Total Future contributions will be invested according to the allocation specified above. Investment allocations can be changed through written instruction once per year or upon a significant change in charitable goals and time horizon for depleting the fund. Reallocations occur on the first business day of the month. Please contact the community foundation at [email protected] or 650.450.5444 if you have questions or need additional information. Fund Advisor Signature Date Updated June 2012 Investment Allocation EFTA R1_00248334 EFTA01851921  Investment Options Silicon Valley Community Foundation www.siliconvalleycf.org Silicon Valley Community Foundation offers a variety of investment options, each of which is designed to meet a range of philanthropic goals and time horizons. Each of our investment pools are carefully constructed and diversified across global investment opportunities to maximize return and minimize volatility. As stewards of over $2 billion in assets, our size provides access to world-class investment managers and alternative investment strategies only available to large institutional investors. Investments are monitored regularly by the community foundation's experienced investment committee, consultant and staff. As a fund advisor, you may allocate to one or more investment pools, and you may change the investment allocation once per year or upon a significant change in charitable goals and time horizon for depleting the fund. The community foundation will maintain your fund's investment allocation through regular monthly rebalancing. Long-Term Growth Diversified portfolio of global stocks, bonds and alternatives lime horizon 45% equity, 30% alternatives and 25% fixed income ?years or more 8% - 9% average annual expected return 0.85% - 0.95% estimated investment expense Social Impact Diversified portfolio of global stocks, bonds and alternatives time horizon from companies with strong financial and social records 'years or more 65% equity, 30% fixed income and 5% alternatives 7% - 8% average annual expected return 0.75% - 0.85% estimated investment expense Balanced Balanced portfolio of global stocks, bonds and alternatives time horizon 52% fixed income, 38% equity and 10% alternatives 3-7 years 6% - 7% average annual expected return 0.60% - 0.70% annual investment expense Short-Term Portfolio of short duration U.S. and global bonds time horizon 85% short-term bonds and 15% global bonds 1-3 yea's 2% - 3% average annual expected return 0.20% - 0.30% annual investment expense Capital Preservation Portfolio of liquid, short-term securities time horizon 100% money market securities FDIC insured bank CDs 1 year or less 0.50% - 1.50% average annual expected return 0.10% - 0.20% estimated investment expense Average annual expected returns are net of fees over full market cycles of seven years or more. Actual returns will fluctuate and may be negative from year to year for some pools. Alternative investments include hedge funds. private equity and real assets; they are included to enhance returns. dampen volatility and hedge against Inflation. Expenses include investment management. consulting, administration and custody. Expenses do not include those of managers within fundel.funds or the fund adninistialwe support fee charged by the community loondalion trnestment expenses are subject to change in response to poi dons changes. Investment Options page 1 of 2 EFTA_R1_002413335