Investment Management

Growing funds for the good of the community

Philanthropists entrust Seattle Foundation to steward funds in support of their grantmaking and for the benefit of the community.

In March 2020, Charity Navigator gave Seattle Foundation a four-star rating for “sound fiscal management and commitment to accountability and transparency.” We exercise prudent investment practices with a “total return” approach, meaning the total change in a fund’s value over a given time period based on interest and dividend income as well as capital appreciation. By using this approach to investment management, the Foundation is able to capture a portion of the historically higher returns in the equity and equity-like markets. It is Seattle Foundation policy to ensure all of our investments are consistent with Washington State’s Uniform Prudent Management of Institutional Funds Act (UPMIFA).

Seattle Foundation offers a number of investment pools to suit various priorities and grantmaking horizons.

• The Balanced Pool is managed as an “endowment” pool. The investment objective is to provide for annual distributions of 5% while maintaining the purchasing power of the principle. This pool serves philanthropists who have a longer-term grantmaking horizon—approximately seven to 15 years—and is designed to maximize total return while protecting principal.
• The Socially Responsible Pool serves philanthropists who favor screening investments against Environmental and Social Responsible criteria.
• The Intermediate-Term Pool is designed to for philanthropists with an intermediate grantmaking horizon between two and seven years, targeting capital preservation with some growth to match anticipated grantmaking. This pool utilizes both active and passive strategies in traditional, liquid asset classes.
• The Short-Term Pool is designed for philanthropists who intend to disperse their funds immediately, or within two to three years. The pool is managed to protect principle, while accepting available returns for no volatility risk. It does not, however, protect against inflation risk and therefore is subject to the risk of reduced purchasing power if grantmaking timeframes exceed the short term.
• The Index Pool is designed for philanthropists who prefer passive investing, which provides lower investment management costs. The pool includes entirely passive investments; as a result, it excludes the potential benefit of active management.
• The Growth Pool is designed for philanthropists who prefer taking more volatility risk through a greater percentage of equity exposure than our Balanced Pool offers. This pool uses both active and passive strategies, with the intent of producing higher longer-term returns. This pool does not invest in private investment or hedge funds.
  
  

View allocation and performance graphs for these pools.

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Allocation of Assets

Seattle Foundation has a long time-horizon with respect to our 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. The Foundation’s portfolio includes traditional equities and securities, private equity, hedged equity, multi-strategy hedge funds, real estate and real return strategies. 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.