Lamar Educational Awards Foundation
Investment Policy Statement “ As of August 1, 2010
The investment policy guidelines and objectives listed within this statement should serve as strict parameters to be followed by the Financial Sub-Committee of the Lamar Educational Awards Foundation as excess funds above the operating budget are available for investment.
Financial Sub-Committee Members:
The Foundation will elect five board members to serve on the Financial Sub-Committee to assist with the management of financial assets of the Foundation. Within these 5 committee members, the Financial Sub-Committee should include two members from the Executive Board. Each elected member will serve a term for one calendar year and then will have to be elected again to participate on the Financial Sub-Committee the following year. There are no maximum limits for participating on the Financial Sub-Committee. Every member of this Financial Sub-Committee must be a current member of the board of the Lamar Educational Awards Foundation and non-members cannot sit on the Financial Sub-Committee at any time.
This Statement serves as guidelines concerning specific investments the Sub-Committee will utilize to invest the Endowment funds of the Foundation. Within the Guidelines set out below, funds shall be invested prudently and conservatively, with the Primary Objective focused on safety and preservation of principal.The Secondary Objective will focus on income generation to assist in providing funds for the Foundation.
The Foundation shall attempt to maintain an approximate cash position equivalent to the previous year™s grant amounts gifted plus expenses incurred “ this equates to the amount of cash flow disbursed over the last year. The Sub-Committee will be responsible for communicating with the Executive Director of the Foundation to follow these requirements consistently. These funds should be kept within FDIC insured bank accounts, money market balances, or certificates of deposits maturing within 12 months.
The Sub-Committee will attempt to maximize the rate of return on Endowment funds not subject to the Liquidity requirements through the use of various types of conservative investments.
Approved investments available to be used for endowment funds include the following:
- FDIC-insured Certificates of Deposits
- U.S. Government Treasury Bills and Bonds
- Government Sponsored Agency Bonds that have a financial credit rating of AAA by independent rating agencies
- Fixed Annuities up to $100,000 per insurance company
- Taxable Municipal Bonds insured by the Permanent School Fund
- Individual Corporate Bonds that have a financial credit rating of AAA by independent rating agencies
Within these investments, the Sub-Committee is responsible for investing within the following strict guidelines:
- The Sub-Committee will monitor deposit amounts and CD™s invested at each individual bank to make sure balances held at these financial institutions comply with FDIC protection.Â Â If any balances at an individual bank are above the FDIC limits then the Sub-Committee will transfer assets to another financial institution to stay within current FDIC limits.
- Each individual investment at the date of purchase must be within 10 years to Maturity Date.
- The Sub Committee must keep at least 75% of the Endowment Funds not subject to Liquidity Requirements invested in Guaranteed FDIC-insured Certificates of Deposits or U.S. Government Treasury Bills and Bonds.
- The Sub-Committee is allowed to allocate up to 25% of the Endowment Funds not subject to Liquidity Requirements into non-guaranteed fixed income investments that include Government Sponsored Agency Bonds, Fixed Annuities up to $100,000 per insurance company, Taxable Municipal Bonds insured by the Permanent School Fund, or Individual Corporate Bonds that have a financial credit rating of AAA by independent rating agencies.
The Sub-Committee is Strictly Prohibited from investing any assets of the Foundation within any of the following investments or investment vehicles:
- Individual Equities or Stocks or any investment vehicle that includes equity (stock mutual funds, stock exchange-traded funds)
- Mutual Funds or Exchange Traded Funds “ this includes funds containing fixed income
- Hedge Funds / Private Equity Investments / Private Placements / Commodities
- Purchasing investments using Margin or borrowing funds to invest
- Non U.S. Dollar Denominated Fixed Income or Non-Guaranteed Fixed Income that has a financial credit rating below AAA from independent rating agencies.
Other Items of Interest:
The Foundation will at times receive donations from individuals with specific restrictions associated with that donation. These funds will be invested within a separate account not allocated to the Endowment funds or Liquidity Requirements. The investment policy for these particular restricted funds will be based upon the wishes of the Entity donating these specific funds.
Communication and Review:
The Sub-Committee will be responsible for presenting quarterly presentations to the Executive Board of the Foundation as a financial report.The Sub-Committee will also be responsible for submitting a new Investment Policy Statement to the Executive Board annually. Any recommendations as to changes should be submitted to the Executive Board of the Foundation for approval.