Investment Philosophy

The Benton County Foundation’s investment philosophy is built on the precepts of diversification, long-term strategic focus, and prudent risk management.

Professional diversification is the backbone of our investment philosophy. Diversification is the investment equivalent of making sure all your eggs are NOT in the same basket. Over the long-term, this common sense principal has both reduced investment risk and improved investment returns. Diversification is achieved by combining different types of investments, with complementary styles and characteristics, to form an efficient investment portfolio.

A long-term strategic focus is used to guide this diversification process. Certain patterns and performance levels become apparent over long periods of time. With these factors in mind, investments are combined in a manner that best positions the Foundation for investment success and long-term sustainability.

Prudent risk management is considered at all stages of the Foundation’s investment process. This is not a practice of avoiding risk, but of ensuring that the risks taken are appropriate. All facets of the Foundation’s investment strategy must meet this standard in order to be included as part of an employed investment approach.

The Benton County Foundation obtains the services of a professional investment management firm to assist in the allocation and investment decisions. Our investment portfolio is presently comprised of four different asset classes – including cash, bonds, stocks, and real estate – utilizing approximately 15 different investment styles. Generally, the portfolio seeks to maintain a target mix of 60 percent stocks and 40 percent bonds/cash, but this mix will vary depending on the current market conditions and the recipient of the funds. The Foundation’s investment strategy is implemented using professionally managed, low cost, no-load mutual funds.

Supported by this investment philosophy, the Benton County Foundation sets annual gifting amounts at levels that balance the current needs of beneficiaries with the ability to provide similar levels of support in the future after adjusting for inflation. The factors influencing the level of annual gifting include general market conditions and portfolio investment returns in addition to current and future beneficiary obligations.

— December 1, 2005

Investment recommendations are provided by Investment Management Consultants, Inc. located in Portland, Oregon.