Management and Stewardship of Funds
For generations members of the Jewish community have entrusted UJA-Federation of New York with assets intended for the permanent benefit of the Jewish people in New York, in Israel, and around the world. Whether funds are donated as a lifetime gift or a bequest, donors know that UJA-Federation will provide proper stewardship and management of charitable assets—as it has for nearly a century.
UJA-Federation’s Pooled Investment Account (PIA), with $886 million in assets as of June 30, 2016, includes more than 400 funds that donors have designated as permanent endowment funds or that UJA-Federation’s board of directors has elected to treat as endowment funds. The PIA is a pooled investment vehicle that gives each fund the benefit of diversification and investment management available only to a major endowment fund.
Each fund in the PIA participates proportionately in the PIA’s investment performance. The fund generates an annual distribution based on UJA-Federation’s total return spending policy* (currently 5 percent of the fund’s prior 12-quarter average net asset value). These distributions are used for the purposes specified by the donor at the time the gift is made or, in the case of unrestricted gifts, to support UJA-Federation’s general purposes.
*Unless otherwise restricted by the gift instrument pursuant to section 553(b) of New York Nonprofit Corporation Law, UJA-Federation may expend so much of an endowment fund as it deems prudent after considering the factors set forth in section 553(a) of such law, to the extent relevant. Those factors include UJA-Federation’s mission; general economic conditions, including the possible effect of inflation or deflation; the PIA’s investment policy and expected total return from income and appreciation; other available resources and the effect of expending them; consideration of alternatives to expenditure of the endowment fund; and the purpose, duration, and preservation of the endowment fund.
Management of Pooled Investment Account (PIA)
For an endowment fund to continue to provide resources for many years to come, it must be well managed from an investment perspective—with the goal of generating real growth over the long term and preserving capital as much as possible during difficult economic times.
The PIA is a diversified fund with more than 50 managers; the largest single allocation to any manager is approximately 7 percent of the portfolio, although most manager allocations are less than 5 percent. Currently, about 37 percent of the PIA is invested in various alternative investments, including hedge funds, and another 12 percent is invested in private equity and real estate funds. Manager selection is a multifaceted process. All managers are vetted against rigorous criteria, including the five “Ps”—people, philosophy, process, portfolio, and performance. The quality of the organization, the character of its people, and alignment of interest with investors are carefully evaluated before investing. Information concerning the PIA’s investment performance history is available upon request. Please note that past performance is not indicative of future results.
The PIA is overseen by an investment committee whose volunteer members include some of the leading investment professionals in New York. The committee determines the PIA’s asset-allocation policy in light of economic and market conditions and reviews and approves all individual manager selections. A strict conflict-of-interest policy prohibits committee members from managing funds for the PIA.
UJA-Federation’s Investment Office, led by a chief investment officer, provides full-time supervision of the PIA’s portfolio. The Investment Office, supported by two specialist consultants, conducts due diligence reviews of both prospective and existing managers, recommends changes in the overall asset-allocation strategy to the Investment Committee, and proposes new managers and changes in allocations to existing managers. UJA-Federation uses an independent consultant to compute the PIA portfolio’s value on a monthly basis.
Stewardship of Endowment Funds
UJA-Federation has a breadth of vision—geographic and programmatic—that provides endowment donors with the assurance that the funds they have established will be well used for the purposes they intend, now and for generations to come. UJA-Federation’s planning staff is widely acknowledged to be the finest in the North American Jewish community. It is responsible for identifying and developing programs to be supported not only in New York but also in Israel, the former Soviet Union, and other Jewish communities around the world.
The planning staff has three principal functions:
- Identifying pressing challenges and significant opportunities facing Jewish communities in New York, in Israel, and around the world in order to care for those in need, inspire a passion for Jewish life and learning, and strengthen the Jewish people.
- Determining which organizations are best suited to respond to challenges, embrace opportunities, and allocate appropriate resources.
- Overseeing and evaluating the work of those organizations to ensure that they are delivering on their commitments.
For more information about UJA-Federation of New York’s Endowment and Pooled Investment Account, please contact Bill Samers at firstname.lastname@example.org or 212.836.1247.
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