Investments
About
The overall investment goal of the EWU Foundation is to adhere to sound investment strategies in order to provide prudent stewardship of assets donors have entrusted for the benefit of Eastern Washington University. While there are many significant functions of the Foundation, perhaps none is more important than the stewardship of gifts.
Endowment Performance Summaries
Management Profile
About Northern Trust Institutional Investment Services
For more than a century, Northern Trust has worked hard building our legacy of outstanding service, expertise and integrity. From a Chicago-based bank founded in 1889, we now have more than 20 international locations and 19,000 employees globally. We serve the world’s most-sophisticated clients – from sovereign wealth funds and the wealthiest individuals and families, to the most-successful hedge funds and corporate brands.
Our guiding principles not only survived but thrived during the Great Depression, two world wars and the 2008 financial crisis. We burnished our reputation as a global leader delivering innovative investment management, asset and fund administration, fiduciary and banking solutions enabled by sophisticated, leading technology. And through it all, we continually laid a solid, forward-looking foundation on which future generations can continue growing and achieving greater.
As of June 30, 2022, Northern Trust Corporation had:
- $1.78 billion in quarterly revenues
- $10.7 trillion in assets under custody
- 15.7% return on average common equity
- $1.3 trillion in assets under management
Investment Committee Charter
The Investment Committee (“Committee”) of the Board of Directors (“Board”) of Eastern Washington University Foundation (“the EWU Foundation”) has overall responsibility for the operation and administration of the Portfolio. The members of the Committee are fiduciaries of the Portfolio with respect to all responsibilities allocated to them. The member will discharge their duties solely on behalf of the EWU Foundation’s mission. The Investment Committee is established in the Bylaws as a standing Committee of the Board.
The membership of the Committee shall consist of at least three voting members, all of whom shall be members of the Board of Directors of the Foundation. The membership shall be comprised of a Committee Chair that is appointed by the Chair of the Board, a Vice Chair appointed by the Committee Chair and at least one other voting Director. All committee members shall be independent directors free from any relationship that, in the opinion of the Board, would interfere with his or her exercise of independent judgment as a member of the Committee. The Foundation Executive Director shall also serve on the committee in a non-voting ex-officio capacity. Members of the Committee shall serve at the pleasure of the Board and shall be appointed to, and removed from, the Committee by the Board. The Chair and members will serve terms pursuant to the established Foundation Bylaws.
The Committee shall hold regular meetings pursuant to a schedule issued by the Chair of the Directors and pursuant to the Foundation Bylaws. Special meetings of the committee may be held upon the call of the Committee Chair, Chair of the Directors, at any time that the attendance or consent of at least a majority of the committee can be obtained.
The Committee Chair shall prepare or approve an agenda in advance of each meeting. The Committee Chair shall preside at all meetings. At the request of or in the absence of the Chair, the Vice Chair shall preside at meetings and otherwise fulfill the duties and obligations of the Chair. The Committee will cause to be kept adequate minutes of its proceedings, and shall present any findings, actions taken, activities or recommendations to the Board. Minutes shall be filed with the foundation records. Committee members will be furnished with copies of the minutes of each meeting and any action taken.
In accordance with the approved Bylaws, the Committee will be governed by the same rules regarding meetings, action without meetings, notice, waiver of notice, and quorum and voting requirements as are applicable to the Board. The Committee is authorized and empowered to adopt its own rules of procedure not inconsistent with (a) any provision hereof, (b) any provision of the Bylaws of the Foundation, or (c) the laws of the state of Washington. The Committee shall have the authority to delegate to subcommittees and to Foundation staff. A quorum shall consist of a majority of the members who are entitled to vote.
The Committee is charged by the Board with the responsibility to:
- Adhere to the Uniform Prudent Management of Institutional Funds Act (UPMIFA)
- Provide high level input on investment strategy and philosophy to the Foundation.
- Review and recommend for approval by the Board, investment policies and guidelines including investment objectives and long-term asset allocation targets.
- Select, monitor and replace investment managers.
- Monitor investment performance and regularly report performance to the Board.
- Review all fees incurred by or on behalf of the Portfolio for reasonableness.
- Evaluate investment performance of the fund based on a comparison of actual returns with the Foundation’s absolute return objective, and with such other benchmarks as the Board or Committee may select. The evaluation will take into account compliance with investment policies and guidelines.
- Maintain minutes of Committee meetings and regularly present reports to the Board regarding the performance of the Foundation’s investments and other matters to which the Committee has given consideration.
EWU Foundation Investment Committee Charter _ (11.9.2010) Board Adopted: 7.8.11 Page 3 - Annually, perform a self-assessment relative to the Committee’s purpose, duties, and responsibilities outlined herein, review and assess this Charter, and submit to the Foundation Executive Committee any recommended changes. After such review by the Executive Committee, recommend any changes to the Charter to the full board.
Frequently Asked Questions
An endowment is composed of donations made to the EWU Foundation with the understanding that the original value of the gift (the principal) will be invested and a portion of the investment earnings (the distribution) will be used to fund the philanthropic intent of the donor. An endowment fund provides program support every year, in perpetuity. The EWU Foundation Board of Directors annually reviews and approves the distribution rate with the dual goal of providing as much scholarship support as possible while allowing for perseveration and growth of the endowment.
The overwhelming majority of endowment funds are restricted to a specific purpose by the donor, such as student scholarships, an endowed professorship for a specific field, or to further an academic or recreational program. Other funds are unrestricted and can be used for the best use as determined by the EWU Foundation. The EWU Foundation honors restrictions on the use of the fund forever and has a legal requirement to do so.
An endowment fund’s value can change in one of four ways:
- Gifts to a fund will increase the principal,
- Gifts to a fund will initially increase the market value,
- Investment returns can increase or decrease market value, or
- Endowment distributions can decrease market value.
When the EWU Foundation receives an individual gift to an endowment, it is combined with other gifts/funds and managed by the EWU Foundation as a single pooled investment. The endowment pool is similar to a mutual fund where each individual fund is treated like an investor whose funds are combined with those of other investors. Income and appreciation are credited to each fund depending on the investment performance for the entire endowment. For example, if the return for the whole endowment is 8% in a year, then each individual fund also experiences a return of 8%. Of course, endowments started after the beginning of the year experience proportional returns.
The EWU Foundation manages the investment, with direct oversight by the EWU Foundation Investment Committee. The Investment Committee works with Northern Trust Institutional Investment Services to select asset allocations to create a well-diversified mix of assets that offers the best opportunity for maximum return with acceptable risk over time. Asset allocations (noted below) and actual returns are formally reviewed throughout each fiscal year.
| Asset Category | Long-Term Target | Long-Term Range |
|---|---|---|
| Domestic Equity | 55% | 45-65% |
| Developed/Emerging International | 10% | 5-15% |
| Core U.S. Investment Grade | 25% | 20-30% |
| High Yield | 5% | 5-10% |
| Inflation Protected | 5% | 5-10% |
| Cash | Less than 1% | 0-1% |
The EWU Foundation annually reviews the distribution which provides annual financial support for both the donor designation and the EWU Foundation.
This annual distribution amount is currently 6% of each endowment’s rolling average market value over the past three (3) years. This 6% is designated as follows: 4% disbursed for the selected designation and 2% toward the EWU Foundation management fee. Any earnings above 6% are reinvested into the respective account. This practice and percentage allocation are consistent with peer institutions across the country.
Additional questions or comments can be shared directly with Barb Richey, 102 Hargreaves Hall, 509.359.7430, or brichey@ewu.edu. We always welcome continued feedback and support. You can also learn more about the EWU Foundation on our overview page.
