Our Investment Policy

PURPOSE

The purpose of this Investment Policy is to provide a clear statement of the organization’s investment objective, to define the responsibilities of the Board of Directors, the CEO, and other parties involved in managing the organization’s investments, and to identify asset allocation guidelines and key criteria for decisions.

INVESTMENT ADVISOR

The organization does not currently require an investment advisor because of the amount of funds available for investment. The current policy is designed to carry minimal risk.  An investment advisor may be considered in the future.

INVESTMENT OBJECTIVE

Confluence Philanthropy’s mission is to transform the practice of investing by aligning capital with our community’s values of sustainability, equity, and justice. Confluence recognizes that all investments have an impact. We believe that investors should not compromise what matters to them in exchange for financial return. By aligning capital in all its forms with our values, we can build an economy that is sustainable and that takes care of people and the planet, together.

In alignment with our mission, the investment objective of Confluence Philanthropy is to preserve capital for future organizational growth and to continue to build an organizational reserve in the event of unexpected circumstances or shortfalls. to the extent possible we seek to align our investments and other financial decisions with our values and, within the context of our mission, seek competitive financial returns.

The organization will maintain a sufficient reserve, per our reserve policy, in a cash account, short-term money market funds, or other vehicles with comparable liquidity.

Confluence Philanthropy is a tax-exempt organization as described in section 501(c)(3) of the Internal Revenue Code. This tax-exempt status should be taken into consideration when making investment decisions.

OVERSIGHT

• The Board of Directors has ultimate responsibility for the investment and management of the organization’s investment assets. The Board approves the IPS and other relevant policies related to financial oversight. The board policies require the CEO to manage the organization’s investments in a manner consistent with these policies and the Finance Committee to provide oversight and make reocmmendations in a manner consistent with these policies.
• The CEO will appoint an Investment Advisory Committee comprised of Confluence members to provide investment guidance, while the Board of Directors will retain decision-making responsibility. The Investment Advisory Committee will meet at least once annually to review and make recommendations regarding investment decisions.
• The Finance Committee, with input from the Investment Advisory Committee, shall conduct an annual review of the organization’s investment assets to verify the existence and performance of the underlying assets. This process should flow in coordination with the annual independent audit of the organization’s financial statements.
• Any investment that is not expressly permitted under this policy must be formally reviewed and approved by the Board of Directors.

GENERAL INVESTMENT GUIDELINES

The portfolio is to be invested with the objective of preserving Confluence funds while seeking values-alignment.

• A cash account shall be maintained with a zero to very low risk tolerance to keep cash available for operating costs, tax obligations, and other expenses.

• It is also important to control costs of administering and managing the portfolio. Transactions shall be executed at reasonable cost, taking into consideration prevailing market conditions and services and research provided by the executing broker.
• Permitted investments include: Cash, including short-term money market funds, short-term bond funds, Treasury Bills, and Certificates of Deposit.

• Investments within the investment portfolio should be readily marketable.

ASSET ALLOCATION, RESTRICTIONS AND PERFORMANCE

Bank Accounts

The organization will maintain working capital of at least two months but no more than $250,000 per institution in one federally insured bank account, preferably at an institution with values that align with those of Confluence.

A secondary account has been established to maintain funds in excess of the working capital account. Funds in excess of $250,000 per institution should be moved to another entity insured by CDARS.

Secondary Account

Funds in excess of two months of working capital amount may be placed in a short-term money market account if the cash flow analysis indicates that they will not be needed during the investment period.

Should the organization accumulate funds in excess of the equivalent of six months of operating expenses in its bank accounts, cash account, and money market fund, the organization may invest funds in a short-term bond account after consulting with the Investment Advisory Committee and after a careful review of the organization’s cash flow.

Conditions and Restrictions

• The following transactions are prohibited: Purchase of non-negotiable securities, derivatives, high risk or junk bonds, private placements, precious metals, commodities, short sales, any margin transactions, straddles, warrants, options, life insurance contracts, leverage or letter stock.
• The investment portfolio should not be a blind pool; each investment must be available for review.
• Donor-restricted funds should be kept in a no risk to low-risk cash account unless permitted by the donor and Board of Directors.
• Confluence’s preference is for short-term fixed income options to be screened based on ESG and mission criteria, especially when financial returns are expected to be comparable.

Gifts of Securities

All gifts of marketable securities shall be liquidated upon receipt from a donor.

Performance

Since the organization’s funds are conservatively invested, investment performance is expected to be low.  Performance shall be reviewed semi-annually and reported to the Finance Committee by the CEO on a net of fees basis. 

IPS Review

The Board will review the portfolio and the Investment Policy Statement on an annual basis. Revisions to the Investment Policy Statement will be proposed by the Investment Committee.