Growing Funds for the Good of the Community
Our donors have entrusted The Seattle Foundation to manage funds for the benefit of the community that we serve. As stewards of these funds, we exercise prudent investment practices that are oriented towards a “total return” approach to investing. This is a term that is used to describe the total change in fund value over a given time period resulting not only from interest and dividend income, but from capital appreciation as well. This approach allows the Foundation to capture a portion of the historically higher returns in the equity and equity-like markets. Our total return approach to investment management is consistent with the Uniform Prudent Management of Institutional Funds Act (UPMIFA), as implemented by Washington State.
As a prudent steward, The Seattle Foundation has three main priorities:
Maximize income, commensurate with the safety of principal.
Ensure capital growth.
Allocation of Assets
Because the Foundation's life continues indefinitely, it also has a very long time horizon with respect to its investments. This allows us to give up some liquidity in exchange for higher returns. Also, the size of the portfolio allows us to gain access to nontraditional investments. Since 1999, The Seattle Foundation has been gradually changing its asset allocation away from traditional marketable equities and bonds into a variety of other, less liquid, types of investments, including private equity, hedged equity, multi-strategy hedge funds, real estate and real return strategies (see chart, below). The value of this diversification is made evident when you note that the best performing asset class varies. Given that performance cannot be predicted, the Foundation portfolio relies on its exposure to a variety of asset classes to benefit from the best returns.