How We Invest Your Gifts

This is the broadest, most diversified, group of investments offered through the Community Foundation. This portfolio allocates capital across equities, fixed income and alternative asset classes (private equity, hedging strategies, real estate) while making use of both active and passive investment strategies.  The equity allocation is broken down to have dedicated exposure across capitalization (large, mid, small), style (core, value, growth) and domicile (U.S., developed international, emerging markets).  The corporate pool recognizes the importance of maintaining a prudent investment philosophy and utilizing a high conviction, disciplined and repeatable investment process to proactively manage risks and pursue opportunities.  This Pool is designed for long-term growth and generally for use in endowed funds.

Environmental, Social and Governance (ESG) investing refers to a set of standards for a company’s behavior used by socially conscious investors to screen potential investments. 

ESG investing is used to screen investments based on corporate policies and to encourage companies to act responsibly.  ESG investors seek to ensure the companies they fund are responsible stewards of the environment, good corporate citizens, and are led by accountable managers. 

At the Community Foundation, the ESG Pool is screened positively – this means that companies that are making improvements and/or leading in impact around environmental, social, and governance markers are included in the pool. This provides broadness in the investments that assists in long-term growth, and also means you could find, for example, a petroleum energy company that is making strides in renewable energy in the pool.

ENVIRONMENTAL issues may include corporate climate policies, energy use, waste, pollution, natural resource conservation, and treatment of animals.  Considerations may also include direct and indirect greenhouse gas emissions, management of toxic waste, and compliance with environmental regulations.  

SOCIAL aspects look at the company’s relationship with internal and external stakeholders.  Does it hold suppliers to its own ESG standards?  Does the company donate a percentage of its profits to the local community or encourage employees to volunteer?  What is a company’s Equal Opportunity Employment Policy?  Does their staff reflect diversity and inclusion?  Do workplace conditions reflect a high regard for employees’ health and safety?  Or does the company take unethical advantage of its customers?

GOVERNANCE standards ensure a company uses accurate and transparent accounting methods, pursues integrity and diversity in selecting its leadership, and is accountable to shareholders.  Some ESG investors may require assurances that companies avoid conflicts of interest in their choice of board members, don’t use political contributions to obtain preferential treatment, or engage in illegal conduct. 

While using these standards, the ESG Pool is still widely diversified in a similar manner as the Corporate Pool, but does not include alternative investments, and is designed for long-term growth and generally for use in endowed funds.

Enhanced Cash Pool is designed to preserve capital with minimal risk, while focusing on generating higher returns by investing in a combination of both money markets and high quality ultra-short bond funds.  The goal is to take advantage of the current interest rate environment and designed for non-endowed donor advised funds or funds that exist for shorter term investment horizons. This can include capital campaigns related to specific projects or capital that wants to be held in short term investments to maintain liquidity.

Impact Investing is the practice of seeking investments that specifically optimize a goal beyond just a financial return.  Impact investing is a general investment strategy that seeks to generate financial returns while also creating a positive social return. Impact investments typically earn a lower financial return and accomplish a specific social return such as supporting affordable housing, healthcare, or education access. An example would be investing a portion or entirety of your fund in a local, affordable housing project loan that pays a 4% financial return, lower than our other investment options are designed to return – and, your investment would help meet a critical need of housing in the community – the social return.

If this option is of interest, reach out to the Forever Lancaster Team for more information, as such opportunities are not always available.

For funds over $500,000, donors can choose to work with their investment advisor on managing the investment of your fund, under the guidance of our IPS (Investment Policy Statement) and Investment Committee.