St. Luke’s Investment Policy Statement

For Endowment Funds

April 2014

Table of Contents

Executive Summary

2

Purpose of Endowment

3

Scope of this Investment Policy

3

Purpose of this Investment Policy Statement

3

Definitions

3

Assignment of Responsibility

4

General Investment Principles

5

Investment Management Policy

6

Definition of Risk

6

Attitude toward Gifts

6

Spending Policy

6

Investment Objectives

7

Specific Investment Goals

7

Liquidity

7

Marketability of Assets

8

Investment Guidelines

8

Selection of Investment Managers

10

Performance Review and Evaluation

10

Investment Policy Review

10

 

Executive Summary

Type of Plan: Endowment

Current Assets: $2,417,414.08 as of 4/30/2014

Time Horizon: In perpetuity

Expected Return: 4.00% net of Inflation & fees

 

Risk Tolerance: Moderate



2014 Spending Policy: 4.00% of Trailing 3 Year

Avg Market Value

Asset Allocation:

Asset Class

Lower

Limit

Strategic Allocation

Upper

Limit

Domestic Large Cap & Mid Cap Equity

*Growth & Value Style

30%

45%

45%

Domestic Small Cap Equity

*Growth & Value Style

5%

10%

15%

International & Emerging Market Equity

5%

15%

15%

US Fixed Income

20%

25%

50%

Alternative Investments

5%

5%

10%

Cash & Equivalents

0%

0%

10%



Evaluation Benchmark: Total return to exceed the performance of a policy index based upon the strategic asset allocation of the endowment to various broad asset classes. Specifically, the policy index will be a weighted index comprised of:

50% Russell 3000

20% MSCI Eafe Index ex US Stock

20% Barclays Capital Intermediate Government/Credit Bond index.

10% GSCI Commodity Index

0% 30 day US Treasury bill



Statement of Investment Policy, Objectives and Guidelines

Cathedral Church of St Luke Endowment



I. PURPOSE OF ENDOWMENT

The Endowment exists to support the mission of the Cathedral Church of St. Luke “to restore all people in unity with God and each other in Jesus Christ”. In order to accomplish this purpose the Endowment balances the requirement to fund current needs and provide long term financial stability in order to serve future generations of worshippers and members of the Cathedral family. Portions of the Endowment may be designated to specific needs including, but not limited to, outreach, music and building upkeep. (See Appendix A )

II. SCOPE OF THIS INVESTMENT POLICY

This statement of investment policy reflects the investment policy, objectives and constraints of the entire endowment.

III. PURPOSE OF THIS INVESTMENT POLICY STATEMENT

The Investment Committee of the Cathedral Church of St. Luke sets forth this statement of investment policy in order to:

  1. Define and assign the responsibilities of all involved parties.

  2. Establish a clear understanding for all involved parties of the investment goals and objectives of the Endowment’s assets.

  3. Offer guidance and limitations to Investment Managers regarding the investment of the Endowment.

  4. Establish a basis for evaluating investment results.

  5. Manage Endowment assets according to prudent standards as established in common trust law.

  6. Establish the relevant investment time horizon for which the Endowment assets will be managed.

In general, the purpose of this statement is to outline a philosophy and attitude, which will guide the investment management of the assets toward the desired results. It is intended to be sufficiently specific to be meaningful, yet flexible enough to be practical.

IV. DEFINITIONS

  1. Endowment” An endowment is a permanent fund of property or money established to benefit an institution. It has a specific purpose defined for which the income derived from the money or property is to be applied. In an endowment fund, the principal is inveted and a portion of the investment earnings (principal growth and dividend and interest income) is spent. The rest of the earnings are directed back into the fund so that the endowment grows over time. In this manner, the endowment becomes a perpetual source of funding for whatever the donor wishes to achieve. Therefore, the use of the Endowment or portions thereof may be permanently restricted or unrestricted.

  2. Investment Committeeshall refer to the governing board established to administer the Endowment as specified by applicable ordinance.

  3. Fiduciary”shall mean any individual or group of individuals that exercise discretionary authority or control over Endowment management or any authority or control over management, disposition or administration of the Endowment assets.

  4. Investment Managershall mean any individual or group of individuals employed to manage the investments of all or part of the Endowment assets.

  5. Securitiesshall refer to the marketable investment securities, which are defined as acceptable in this statement.

  6. Investment Horizonshall be the time period over which the investment objectives as set forth in this statement are expected to be met. The Investment Horizon for this Endowment is in perpetuity.

  7. Uniform Prudent Management of Institutional Funds Act (UPMIFA)” shall mean the statute enacted in 2009 that allows pooling of investments, a prudent or business care standard and authority to delegate investment authority. It permits a total return investment strategy.



V. ASSIGNMENT OF RESPONSIBILITY

Responsibility of the Investment Manager

Each Investment Manager must acknowledge in writing its acceptance of responsibility as a Fiduciary. Each Investment Manager will have full discretion to make all investment decisions for the assets placed under its jurisdiction, while observing and operating within all policies, guidelines, constraints and philosophies as outlined in this statement. Specific responsibilities of the Investment Manager(s) include:

  1. Discretionary investment management including decisions to buy, sell or hold individual securities and to alter asset allocation within the guidelines established in this statement.

  2. Reporting on a timely basis quarterly investment performance results.

  3. Communicating any major changes to economic outlook, investment strategy or any other factors, which affect implementation of investment process or the investment objective progress of the Endowment’s investment management.

  4. Informing the Investment Committee regarding any qualitative change to investment management organization. Examples, include changes in portfolio management personnel, ownership structure, investment philosophy, etc.

  5. Voting proxies, if requested by the Investment Committee, on behalf of the Endowment and communicating such voting records to the Investment Committee on a timely basis.

Responsibility of the Investment Committee

The Investment Committee role will be consistent with the investment objectives, policies guidelines and constraints as established in this statement. The Investment Committee will not reserve any control over investment decisions, with the exception of specific limitations described in this statement. Specific responsibilities of the Investment Committee include:

  1. Developing an investment policy that defines: investment time horizon, acceptable and prudent level of risk, expected target rate of return and asset classes consistent with the ability to implement and monitor an asset allocation strategy.

  2. Conducting investment manager searches.

  3. Providing “due diligence” or research on the Investment Manager(s)

  4. Monitoring the performance of the Investment Manager(s) to determine the progress towards the investment objectives.

  5. Communicating all matters of policy, manager research and manager performance to the Vestry of Cathedral Church of St Luke.

  6. Applying our “Principles for Responsible Investment Guided by Mission and the Millennium Development Goals” to incorporate social responsibility into investment analysis. (See Appendix B)

  7. To vote and record proxies that are aligned with our “Principles for Responsible Investment Guided by Mission and the Millennium Development Goals.

  8. Reviewing Endowment investment history, historical capital markets performance and the contents of this investment policy statement with any newly appointed members of the Investment Committee.

Responsibility of Custodian and other Specialists

The custodian will physically (or through agreement with a sub-custodian) maintain possession of securities owned by the Endowment, collect dividend and interest payments, redeem maturing securities, and effect receipt and delivery following purchases and sales. The custodian may also performregularaccounting of all assets owned, purchased or sold as well as movement of assets into and out of the Endowment accounts.

Additional specialists such as attorneys, auditors, actuaries, investment consultants and others may be employed by the Investment Committee to assist in meeting responsibilities and obligations to administer Endowment assets prudently. If such experts employed are also deemed to be fiduciaries, they must acknowledge such in writing. All expenses for such experts must be customary and reasonable and will be borne by the Endowment as deemed appropriate and necessary.

VI. GENERAL INVESTMENT PRINCIPLES

  1. Investment shall be made solely in the interest of the beneficiaries of the Endowment.

  2. The Endowment shall be invested with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in like capacity and familiar with such matters would use in the investment of a fund of like character and with like aims.

  3. Investment of the Endowment shall be so diversified as to minimize the risk of large losses, unless under the circumstances it is clearly prudent not to do so.

  4. The Investment Committee may employ one or more Investment Managers of varying styles and philosophies to attain the Endowment’s objectives.

  5. Cash is to be employed productively at all times, by investment in short term cash equivalents to provide safety, liquidity and return.

VII. INVESTMENT MANAGEMENT POLICY

  1. Preservation of Capital – Consistent with their respective investment styles and philosophies, investment managers should make reasonable efforts to preserve capital, understanding that losses may occur in individual securities.

  2. Risk Aversion – Understanding that risk is present in all types of securities and investment styles, the Investment Committee recognizes that risk is necessary to produce long term investment results that are sufficient to meet the Endowment’s objectives. However, the investment managers are to make reasonable efforts to control risk, and will be evaluated regularly to ensure that the risk assumed is commensurate with the given investment style and objectives.

  3. Adherence to Investment Discipline – Investment managers are expected to adhere to the investment management styles for which they were hired. Managers will be evaluated regularly for adherence to investment discipline.

VIII. DEFINITION OF RISK

The Investment Committee realizes that there are many ways to define risk. It believes that any person or organization involved in the process of managing the Cathedral Church of St Luke Endowment mustunderstand how it defines risk so that the assets are managed in a manner consistent with the Endowment’s objectives and investment strategy as designed in this statement of investment policy. In keeping with the Purpose of the Endowment, the Investment Committee defines unacceptable risk both as high volatility of investment returns from year to year and as permanent impairment of long term purchasing power. As such it seeks returns that fluctuate only moderately over time and also exceed inflation.



IX. ATTITUDE TOWARD GIFTS (See Appendix C Gift Acceptance Policy)

We recognize the importance of a well promoted endowment that regularly asks for gifts and makes it easy for parishioners to identify in their wills or direct specific gifts to. However, future giving (contributions) to this Endowment is expected to be inconsistent, and therefore unpredictable. As a result, the Investment Committee has set an investment strategy with the objective of maintaining purchasing power of Endowment assets before consideration of gifts. Accordingly, future giving will serve to increase purchasing power. (See Appendix D Timeline of Gifts). Therefore, expectations may be expressed by the following equation:

4.00% Spending + Inflation + Expenses = Maintain Purchasing Power

While Giving = Increase in Purchasing Power

X. SPENDING POLICY

This Endowment places highest emphasis on meeting its annual operations obligations. As such, the Investment Committee regards spending in dollar terms from year to year as relatively consistent and predictable. However, expected investment returns from “riskier” portfolios are not consistent and predictable. We understand that total return is not within our control so the absolute level of spending is likely to have the greatest impact on the endowment’s sustainability. This Endowment must have asset allocation monitored by the Investment Committee on a quarterly basis. The Investment Committee will set spending equal to a maximum of 4.00% of the total return of the endowment. The annual budget for Endowment spending will be calculated by multiplying the spending rate by the Endowment’s 12-month quarterly average value, net of investment advisory fees and administrative expenses.Distributions from the Endowment will be made as needed.

XI. INVESTMENT OBJECTIVES

In order to meet its needs, the investment strategy of the Cathedral Church of St Luke Endowment is to emphasize total return; that is, the aggregate return from capital appreciation and dividend and interest income.

  1. We have a long-term investment horizon and want to select classes of investment, which historically produce superior rates of return over long periods.

  2. We are less concerned about liquidity and short -term volatility.

  3. We have a total return orientation and are therefore less concerned about current income from our portfolios.

  4. As a Christian institution, we have socially responsible investing (“SRI”) policy and do not wish to lend financial support or backing to entities which do not meet our criteria for social responsibility.

Specifically, the primary objective in the investment management for Endowment assets shall be:

Long Term Growth of CapitalTo emphasize long-term growth of principal while avoiding excessive risk. Short-term volatility will be tolerated in as much as it is consistent with the volatility of a comparable market index.

XII. SPECIFIC INVESTMENT GOALS

Over the investment horizon established in this statement, it is the goal of the aggregate Endowment assets is to preserve the purchasing power of the Endowment portfolio over time, net of inflation, costs and withdrawals.

The investment goals above are the objectives of the aggregate Endowment, and are not meant to be imposed on each investment account (if more than one account is used). The goal of each investment manager, over the investment time horizon shall be to:

  1. Meet or exceed the market index or blended index, selected and agreed upon by the Investment Committee that most closely corresponds to the style of investment management.

  2. Display an overall level of risk in the portfolio consistent with the risk associated with the benchmark specified above

  3. Specific investment goals and constraints for each investment manager, if any, shall be incorporated as part of this statement of investment policy. Each manager shall receive a written statement outlining their specific goals and constraints as they differ from those objectives of the entire Endowment.

XIII. LIQUIDITY

To minimize the possibility of a loss occasioned by the sale of a security forced by the need to meet a required payment, the Investment Committee will periodically provide investment counsel with an estimate of expected net cash flow. The Investment Committee will notify the investment consultant in a timely manner, to allow sufficient time to build up necessary liquid reserves.

 

XIV. MARKETABILITY OF ASSETS

The Investment Committee requires that all of Endowment assets be invested in liquid securities, defined as securities that can be transacted quickly and efficiently for the Endowment, with minimal impact on market price.



XV. INVESTMENT GUIDELINES

ALLOWABLE ASSETS

  1. Cash Equivalents

  • Treasury Bills

  • Money Market Funds

  • Certificates of Deposit

  1. Fixed Income Securities

  • U.S. Government and Agency Securities

  • Corporate Notes and Bonds

  • Mortgage Backed Bonds

  • Preferred Stock

  • Fixed Income Securities of Foreign Governments and Corporations

  • Up to 5% in high yield bonds via an ETF or mutual fund.

  1. Equity Securities

  • Common Stocks

  • Convertible Notes and Bonds

  • Convertible Preferred Stocks

  • American Depository Receipts (ADRs) of Non US companies

  • Stocks of Non-US Companies (Ordinary shares)

  1. Mutual Funds

  • Mutual funds which invest in securities as allowed in this statement

  • ETF’s and indexes, which invest in securities as allowed in this statement.

  1. Other Alternative Assets

  • REITs

  • Hedge Fund of Funds

  • Commodities

Prohibited Assets

  1. Our SRI policy is that we will not purchase the securities of entities 51% or more of whose revenues are derived from the manufacture and sale of armaments, tobacco products, alcoholic beverages or the conduct of gaming enterprises. We also will not purchase the top 50 EPA toxic release emitter securities and will annually review securities overall environmental track record.The Investment Committee has responsibility for the interpretation of this policy and our investment managers will be made aware of it. (See Appendix B: Our Principles for Responsible Investing)

Prohibited Transactions

Prohibited transactions include, but are not limited to the following: Margin Transactions

Asset Allocation Guidelines

Investment management of the assets of the Endowment shall be in accordance with the following, tentative asset allocation guidelines. These guidelines may be modified as appropriate in consultation with Investment Managers.

  1. Aggregate Endowment Asset Allocation Guidelines (at market value)

Asset Class

Lower

Limit

Strategic Allocation

Upper

Limit

Domestic Large Cap & Mid Cap Equity

*Growth & Value Style

30%

45%

45%

Domestic Small Cap Equity

*Growth & Value Style

5%

10%

15%

International & Emerging Market Equity

5%

15%

15%

US Fixed Income

20%

25%

50%

Alternative Investments

5%

5%

10%

Cash & Equivalents

0%

0%

10%



Evaluation Benchmark: Total return to exceed the performance of a policy index based upon the strategic asset allocation of the Endowment to various broad asset classes. Specifically, the policy index will be a weighted index comprised of:

50% Russell 3000

20% MSCI Eafe Index ex US Stock

20% Barclays Capital Intermediate Government/Credit Bond index.

10% GSCI Commodity Index

0% 30 day US Treasury bill

This policy index will be modified to reflect future changes in asset allocation guidelines.

  1. The Investment Committee may employ investment managers whose investment disciplines require investment outside the established asset allocation guidelines. However, taken as a component of the aggregate Endowment, such disciplines must fit within the overall asset allocation guidelines established in this statement.

 

  1. In the event that the above aggregate asset allocation guidelines are violated, for reasons including but not limited to market price fluctuations, the Investment Committee will instruct the Investment Manager(s) to bring the portfolio(s) into compliance with these guidelines as promptly and prudently as possible.

 

Diversification for Investment Managers

The Investment Committee does not believe it is necessary or desirable that securities held in the Endowment represent a cross section of the economy. However, in order to achieve a prudent level of portfolio diversification, the securities of any one company or government agency should not exceed 10% of the total Endowment, and no more than 30% of the total Endowment should be invested in any one industry. Individual treasury securities may represent 40% of the total Endowment, while the total allocation to treasury bonds and notes may represent up to 100% of the Endowment’s aggregate bond position.

 

Guidelines for Fixed Income Investments and Cash Equivalents

 

  1. Endowment assets may be invested and retained in investment grade bonds rated BBB (or equivalent) or better.

  2. Up to 5% of the fixed income portfolio may be invested in high yield bonds assets if an etf or mutual fund.

  3. Fixed income maturity restrictions are as follows:

Maximum maturity for any single security is 10 years.

Weighted average portfolio maturity may not exceed 5 years.

  1. Money market funds selected shall contain securities whose credit rating at the absolute minimum would be rated investment grade by Standard & Poor’s and/or Moody’s.

 

XVI. SELECTION OF INVESTMENT MANAGERS

The Investment Committee’s selection recommendation to the Vestry must be based on prudent due diligence procedures. A qualifying Investment Manager must be a registered investment advisor under the Investment Advisors Act of 1940, or a bank or insurance company. The Vestry requires that each Investment Manager provide, in writing, acknowledgement of fiduciary responsibility to the Cathedral Church of St Luke.

 

XVII. PERFORMANCE REVIEW AND EVALUATION

Performance reports generated by the Investment Managers shall be compiled at least quarterly and communicated to the Investment Committee for review. The investment performance of total portfolio, as well as asset class components, will be measured against commonly accepted performance benchmarks. Consideration shall be given to the extent to which the investment results are consistent with the investment objectives, goals and guidelines as set forth in this statement. The Investment Committee intends to evaluate the portfolio(s) over at least a three-year period, but reserves the right to recommend that the Vestry terminate a manager for any reason including the following:

 

  1. Investment performance that is significantly less than anticipated given the discipline employed and the risk parameters established, or unacceptable justification of poor results.

  2. Failure to adhere to any aspect of this statement of investment policy, including communication and reporting requirements.

  3. Significant qualitative changes to the investment management organization.

Investment managers shall be reviewed regularly regarding performance, personnel, strategy, research capabilities, organizational and business matters and other qualitative factors that may impact their ability to achieve the desired investment results.

XVIII. INVESTMENT POLICY REVIEW

To assure continued relevance of the guidelines, objectives, financial status and capital markets expectations as established in this statement of investment policy, the Investment Committee plans to review investment policy at least annually.

This statement of investment policy was originally adopted on 21st September, 2011 by the Vestry of the Cathedral Church of St Luke and revisions passed by the Vestry on 21 May 2014.

APPENDIX A

According to the Treasurer’s records, updated annually, the 2013 designated purposes of Endowment spending are as follows.

 

Investment Policy Appendix B September 2010

The Five Marks of Mission of the World Wide Anglican Church

1. To proclaim the Good News of the Reign of God

2. To teach, baptize and nurture new believers

3. To respond to human need by loving service

4. To seek to transform unjust structures of society

5. And to strive to safeguard the integrity of creation and sustain and renew the life of the earth. 

The Millennium Development Goals

1. Eradicate extreme poverty and hunger

2. Achieve universal primary education

3. Promote gender equality and empower women

4. Reduce child mortality

5. Improve maternal health

6. Combat HIV/AIDS, malaria and other diseases.

7. Ensure environmental sustainability

8. Create a global partnership for development with targets for aid, trade and debt relief.

 

Saint Luke’s shares in the Episcopal Church’s mission “to restore all people in unity with God and each other in Jesus Christ”

Our principles for Responsible Investment Guided by Mission

and the Millennium Development Goals

As Episcopal investors, we have a duty to act in the best long term interests of our community’s mission, future goals and beneficiaries. We believe that Social Responsible Investing and environmental, social and corporate governance (ESG) issues can affect the performance of investment portfolios (to varying degrees across companies, sectors, regions, asset classes and through time).

We recognize that applying these principles may better align us as investors with the broader objectives of the Five Marks of Mission of the world wide Anglican church and the Millennium Development Goals.

Therefore we commit to the following:

1. Within our endowment, we will incorporate social responsibility and ESG issues into investment analysis and decision making processes.

Actions:

  • Address SRI in our endowment investment policy statement

  • Assess the capabilities of investment managers to incorporate SRI issues

2. We will be active owners and incorporate mission into our ownership policies and practices and seek appropriate disclosure on SRI issues on the entities in which we invest.

Possible Actions:

  • Exercise proxy voting rights

  • File shareholder resolutions consistent with long term considerations

  • Participate in collaborative engagement initiatives

  • Ask investment managers to undertake and report on SRI related issues and provide information from companies regarding adherence to SRI norms.

3. We will promote understanding of our SRI principles and weave SRI principles and values (ex. promoting health, dignity, respect for people and the environment) into the fabric of our Cathedral. Our work will be to help everyone at St. Luke’s see our investments not as a separate entity from Cathedral life but rather as another way in which we use our gifts and resources to serve God.

Possible Actions:

  • Include SRI requirements in requests for proposals (RFPs)

  • Align our investment policy with mission

  • Communicate to parishioners in “real language” through the year

  • Identify ways to increase transparency throughout the year

  • Forge new definitions of “values” and “returns”

  • Provide information that is not only technical and also human interest oriented.

 

5. We will work together to include all individuals, families and groups in the spirit of unity, possibility, growth and leadership as we pursue SRI policies and planning.

Possible Actions:

  • Support and share SRI learning opportunities information across committees/groups and to individual parishioners.

  • Support collaborative initiatives within the Episcopal/Anglican community

  • Endeavor to cast a broad net within the congregation

  • Inspire people with stories of advocacy and activism related to SR

6. We will report on our activities and progress towards implementing our SRI principles

Possible Actions:

  • Assign Investment Committee representative as Vestry liaison to SRI

**Principles are applied consistent with Fiduciary duty: Principles based on premise that SRI can affect investment performance and that appropriate consideration of issues to deliver risk adjusted returns in line with our investment policy expectations.



**Principles suggest a policy of engagement with companies rather than screening or avoiding stocks based on criteria.

Investment Policy Appendix C , June 2011

The Vestry of Cathedral Church of St. Luke,Portland, ME

GIFT ACCEPTANCE POLICY

Purpose

This Gift Acceptance Policy will provide guidelines to representatives of the Cathedral Church of St. Luke who may be involved in the acceptance of gifts, to outside advisors who may assist in the gift-planning process, and to prospective donors who may wish to make gifts to the Cathedral. This policy is intended only as a guide and allows for some flexibility on a case-by-case basis. The gift review process outlined here, however, is intended to be followed closely.

The Vestry, upon the advice of the Gift Review Committee, reserves the right to decline any gift that does not further the mission or goals of the parish. Also, any gifts that would create an administrative burden or cause the parish to incur excessive expenses may be declined.

The Gift Review Committee

The Gift Review Committee comprises of the Dean, Senior Warden, Treasurer, plus one additional parishioner appointed by the Dean. Any questions which may arise in the review and acceptance of gifts to the Cathedral will be referred to the Gift Review Committee.

Cash

1. All gifts by check shall be accepted by the Cathedral, regardless of amount.

2. Checks shall be made payable to the Cathedral Church of St. Luke. In no event shall a check be made payable to an individual who represents the Cathedral or the church in any capacity.

Publicly Traded Securities

1. Readily marketable securities, such as those traded on a stock exchange, can be accepted by the Cathedral.

2. For gift crediting and accounting purposes, the value of the gift of securities is the mean of the high and low prices on the date of the gift.

3. A gift of securities to the Cathedral normally would be liquidated immediately. However, if the form or designation of the gift allows the possibility that it will be directed to the Endowment Fund, a decision regarding the liquidation of the securities will be deferred until that determination is made. If the funds are to be directed to the Endowment Fund, the certificates will be given to the Fund’s investment manager who then will act on the Endowment Board’s decision whether to sell or hold the securities, which decision will be made on portfolio considerations.

Closely Held Securities

1. Non-publicly traded securities may be accepted after consultation with the Gift Review Committee

2. Priorto acceptance, the Gift Review Committee will explore methods and timing of liquidation of the securities through redemption or sale. The Gift Review Committee will try to determine:

a) an estimate of fair market value

b) any restrictions on transfer

c) whether and when an initial public offering might be anticipated

3. No commitment for repurchase of closely held securities shall be made prior to completion of the gift of the securities.

Real Estate

1. Any gift of real estate must be reviewed by the Gift Review Committee.

2. The donor normally is responsible for obtaining and paying for an appraisal of the property. The appraisal will be performed by an independent and professional agent.

3. The appraisal must be based upon a personal visitation and internal inspection of the property by the appraiser. Also, whenever possible, it must show documented valuation of comparable properties located in the same area.

4. The formal appraisal should contain photographs of the property, the tax map number, the assessed value, the current asking price, a legal description of the property, the zoning status, and complete information regarding all mortgages, liens, litigation, or title disputes.

5. The Cathedral reserves the right to require an environmental assessment of any potential real estate gift.

6. The property must be transferred to the Cathedral prior to any formal offer or contract for purchase being made.

7. The donor may be asked to pay for all or a portion of the following:

a) maintenance costs

b) real estate taxes

c) insurance

d) real estate broker’s commission and other costs of sale

3) appraisal costs

8. For gift crediting and accounting purposes, the value of the gift is the appraised value of the real estate; however, this value may be reduced by costs of maintenance, insurance, real estate taxes, broker’s commission, and other expenses of sale.

Life Insurance

1. A gift of a life insurance policy must be referred to the Gift Review Committee.

2. The Vestry will accept a life insurance policy as a gift.

3. If the gift is a paid-up policy, the value for gift crediting and accounting purposes is the policy’s replacement cost.

4. If the policy is partially paid up, the value for gift crediting and accounting purposes is the policy’s cash surrender value. (Note: For IRS purposes, the donor’s charitable income tax deduction is equal to the interpolated terminal reserve, which is an amount slightly in excess of the cash surrender value.)

Tangible Personal Property

1. Any gift of tangible personal property shall be referred to the Gift Review Committee prior to acceptance.

2. A gift of jewelry, artwork, collections, equipment, and software shall be assessed for its value to the Cathedral, which may be realized either by being sold or by being used in connection with the Cathedral’s exempt purpose.

3. Depending upon the anticipated value of the gift, a qualified outside appraiser may be asked to determine its value.

4. The Cathedral shall adhere to all IRS requirements relating to disposing of gifts of tangible personal property and will provide appropriate forms to the donor and IRS.

Deferred Gifts

1. The Cathedral encourages deferred gifts in its favor through any of a variety of vehicles:

a) charitable gift annuity (or deferred gift annuity)

b) pooled income fund

c) charitable remainder trust

d) charitable lead trust

e) bequest

f) retained life estate

2. Cathedral (or its agent) shall not act as an executor (personal representative) for a donor’s estate. A member of the parish staff serving as personal representative for a member of the parish does so in a personal capacity, and not as an agent of the parish.

3. Cathedral (or its agent) shall not act as trustee of a charitable remainder trust.

4. When appropriate, the Cathedral may invite prospective donors to consider the gift vehicles offered by the Episcopal Church Foundation (specifically, charitable remainder trusts, charitable gift annuities, and the pooled income fund) as well as its investment services.

5. When donors are provided planned gift illustrations or form documents, these will be provided free of charge. For any planned-gift-related documents, materials, illustrations, letters, or other correspondence, the following disclaimer should be included:

We strongly urge that you consult with your attorney, financial and/or

tax advisor to review and approve this information provided you without

charge or obligation. This information in no way constitutes advice.

We will gladly work with your independent advisors to assist in any way.

6. All information obtained from or about donors/prospects shall be held in the strictest confidence by the Cathedral, its staff and volunteers. The name, amount, or conditions of any gift shall not be published without the express written or oral approval of the donor and/or beneficiary.

  1. The Cathedral will seek qualified professional counsel in the exploration and execution of all planned gift agreements. The parish recognizes the right of fair and just remuneration for professional services.



















Appendix D Timeline of Gifts St Luke Cathedral Endowment 2000 – 2013

 

12/31 Endowment Value

Actual $ Amount Withdrawn

Annual Gifts to Endowment

2000

$ 2,212,872.53

 

$ 3,550 gift for flowers

2001

$ 2,173,488*inc $95,000 borrowing

$ 108,000

 

2002

$ 1,815,000

$ 108,000

$ 3,550 Shaw gift for flowers

2003

$ 1,981,416

$ 111,200

 

2004

$ 2,311,379

 

$ 111,500

 

$182,000 gift reduced by 2001 borrowing and so net gift was $98,908. $15,000 gift for music

2005

$ 2,302,498.30

$ 105,000

$5,000 Brown gift for camp scholarships

2006

$ 2,524,728

$ 110,000

 

2007

$ 2,516,452

$ 122,608

 

2008

$ 1,484,700

$ 121,988

 

2009

$ 1,791,469

$ 112,557

 

2010

$ 1,853,845

$ 106,780

 

2011

$ 1,859,811.08

$ 89,271

$137,000 Elliott bequest

2012

$ 2,071,509.10

$ 78,408

$ 57,200 Elliott bequest

$ 20,000 Carver bequest

2013

$ 2,421,074.63

$ 80,340

 

Note: After 2007 the spending withdrawal from Hamlen Endowment fund reported separately: 2007 $5,735, 2008 $5,643, 2009 $4,938, 2010 $4,637, 2011 $4,269. Values do not include value and spending from Codman Trust managed by Trustees of Diocesan funds. The information contained herein has been obtained from sources believed to be reliable. A summary of source material provided to the Treasurer and Senior Warden and verified. The history summary provides information on endowment values, gifts, distributions, RFP requests and investment policy revisions. Sarah J. Halpin



Appendix E Proxy Voting Process for St Luke’s Endowment, April 2011

Previous investment managers voted proxies for us – we were not informed of their voting records. FL Putnam does not vote our proxies. Proxies are e-mailed to the Cathedral Treasurer.

Goal: To better align stock ownership practices with our mission and our

SRI Principles. To have a record of proxy reporting.

Recommend that proxy votes are recorded and shared at the Investment committee meeting and noted in the minutes so that information is accessible to Vestry and parishioners.

 General proxy guidelines are below:

  • Routine Items – vote for uncontested director or trustee nominees, changes in company name, and other procedural matters related to annual meetings.



  • Corporate Governance – vote for for charter and bylaw amendments proposed solely to conform with modern business practices or for purposes of simplification or to comply with what management's counsel interprets as applicable law.



  • Anti-Takeover Matters – proposals that require shareholder ratification of poison pills, and on a case-by-case basis on proposals to redeem a company's poison pill.



  • Mergers/Acquisitions and Corporate Restructurings – These probably do need to be discussed and examined on a case-by-case basis.



  • Shareholder Sponsored Resolutions - These probably do need to be discussed and examined on a case-by-case basis



  • Shareholder Rights – We would vote against proposals that may restrict shareholder rights.