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LACC Foundation Investment Policy

The foundation is a non-profit, tax-exempt 501(c)(3) corporation that was established in 1968. It is designated to

The LACC Foundation will accept donations, gifts, and contributions on behalf of Los Angeles City College. The funds acquired will be invested in a manner designed to preserve the capital thus obtained, and to provide the cash flow necessary for the LACC Foundation to provide assistance to the college.

The Board of Directors will have the final decision as to how the funds will be invested. To assist the Board, however, the Investment Committee will perform the necessary research, analysis, and decision making required. Periodically, the committee will recommend changes in the portfolio of agreed upon investment holdings. At the direction of the Board of Directors, the Investment policy may be revised, amended, or suspended.

When appropriate and necessary, the Investment Committee may recommend to the Board of Directors the employment of an investment manager to invest and manage the assets of the Foundation. The individual selected must be from a viable and sound financial organization, and have an appropriate record of financial management experience. The selection of the manager will conform to standards established by the Investment Committee, the objectives and philosophy of this policy statement, and such federal and state restrictions as may be relevant.

Investment Objectives:
All investment decisions made by the committee will be made by majority vote of the members. In order to guide the committee, the following shall be the principal goals and objectives of the committee:

Every effort will be made to seek a return on investment that will exceed the prevailing rate of inflation for the entire economy, as reported by the Bureau of Labor Statistics, and provide a real, noninflationary, return to the Foundation. With this in mind, the goal shall be a ten percent overall return. The Investment Committee will monitor the rformance of elements of the investment portfolio. A report on performance will be prepared for the Board of Directors each business quarter.
All investment decisions will be conservative. The principal concern will be the safety of any funds given to the Foundation. The committee will seek to approve only reasonable and prudent amounts of risk. Any attempt to engage in "market timing" will be avoided.
The allocation of funds among different types of investment assets will be governed by the need to balance the future needs of the Foundation with the cash flow required to carry out the programs approved by the Board of Directors.
Investment Guidelines:
The Investment Manager is given full discretion to act in accordance with the investment policy provided by the Foundation. These guidelines are subject to review from time to time and the Investment Manager should feel free to recommend appropriate changes to the Board of Directors for their consideration.
Cash equivalent securities are viewed as a viable alternative to equity or fixed income securities as a strategy for reducing portfolio volatility during unstable market conditions, depending upon the Investment Manager's view of the markets. However, any attempt to engage in "market timing" will be avoided.
The Foundation's portfolio may consist, in part, of corporate common stocks. Such securities should be from companies that are well managed, and with prospects for high earnings and market appreciation. Overall stock emphasis should be placed on stocks the Investment Manager believes are quality issues.
Stock investment in any one corporation should be limited to 5% of total equity assets under management.
No more than 25% in any industry should be invested.
The Foundation should not control more than 10% of the stock in any one company.
The maximum commitment to bonds for the overall assets of the portfolio is set at 60%. The foregoing limit is subject to periodic review and adjustments by the Investment Manager with Board of Directors approval.
The maximum remaining maturity on each bond is limited to 30 years.
There are no position limits or restrictions with respect to U.S. Government Treasury and Agency issues.
The Board of Directors prefers traditional stock investment, however, the Investment Manager is encouraged to discuss any alternatives that it believes to be worthy of consideration.
Restrictions:
In addition to the Fixed Income and Equity Guidelines, the Board of Directors has set forth the following restraints:

a) No direct investment in gold, other commodities, and collectibles.
b) No direct investment in real estate partnerships.
c) No short sales, trading on margin.
d) No options including puts or calls, unless they are covered options.

No Director of the Foundation shall act as the Investment Manager.
Communication and Reporting:
The Investment Manager is expected to provide quarterly reports detailing all asset information and performance results. Investment results will be evaluated and compared against appropriate indices. Any benchmarks are intended as targets only and not as assurance or guarantee of performance of any investment or of the portfolio. In addition to the required written and statistical information, the Investment Manager will be available to meet with the Board of Directors in person at least annually and more often, as appropriate.