The Foundation's endowment's objective is to achieve long-term rates of return that will exceed the IRS mandated annual distribution plus inflation. This return on our investments will come from long-term capital gains, but the endowment will also seek current income as a secondary objective in order to provide lower portfolio volatility for scholarships and grants. The Foundation's cash asset will be set aside to cover the charitable distribution for two years.
In order to outpace the required annual distribution plus inflation, significant market risk is required. In an effort to mitigate the risk, the Foundation investments are diversified among various asset classes. Investments are further diversified by investment style; both growth and value styles are utilized in the portfolio.