Finances

The Fannie E. Rippel Foundation has a total return objective (for income plus capital appreciation, less fees) of 10% per year, over any three-year investment horizon. This objective was established to maintain and conservatively grow the real purchasing power of the Foundation’s investments without restricting the regular spending of the Foundation. The basis of this return objective is 5% spending, plus 3% inflation and 2% real growth, all of which helps to protect and moderately grow the corpus of the Foundation’s assets.

With that return objective in mind, the Foundation and its investment advisor, Jeffrey Slocum & Associates, established an investment structure that is similar to that of large foundations and endowments. The overall portfolio strategy and asset allocation is expected to produce less volatile returns regardless of the prevailing financial market environment. To accomplish this, the portfolio emphasizes alternative or “absolute return” oriented investment managers and de-emphasizes traditional investments, such as stocks and bonds. During “typical” economic times, such a portfolio is expected to preserve capital while providing a reasonable rate of return relative to the overall stock market. The returns associated with this structure are likely to differ from traditional investments, with lower than average market returns when market performance peaks and higher than average market returns when the market is down.

Since inception, the corpus of the Foundation has grown three to four times. The Foundation’s 990-PF is available online at GuideStar’s Web site: www.guidestar.org.