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Investment Management Guidelines

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All Souls Church, Unitarian
Attachment B: INVESTMENT MANAGEMENT GUIDELINES
Recommended by the Investment Committee to the Board of Trustees, 20 April 2008
A. General
1. This document describes the rules by which the All Souls Church (ASC) Endowment is to be managed. These Endowment Investment Management Guidelines have been adopted by and may only be amended by the ASC Board of Trustees. The Board of Trustees takes all actions regarding the investment and distribution of the Endowment based upon analysis and recommendations provided by the Investment Committee. The Investment Committee conducts its analysis and makes its recommendations in keeping with these guidelines and the committee’s Terms of Reference.
2. The purposes of the ASC Endowment, in order of importance, are:
a) Provide a long-term investment vehicle that will grow in value and can be used by ASC for the
designated purposes of the various endowment funds ,
b) Provide current income that contributes to the annual operating revenues of the church, and
c) Allow the church to demonstrate its ethical values through investment choices and practices
including: community investing, investment manager selection, positive and negative stock
selection, and shareholder action.
3. Objective and Performance Target The Endowment shall be invested with the objective of maximizing return with moderate risk while subject to any Socially Responsible Investment (SRI) constraints that are imposed.
Investments shall be made in full accordance with the law. To ensure that the principal increases, the endowment’s expected annual rate of return should match or preferably exceed the annual return of the Standard and Poor’s 500 Index. This should ensure that over a period of years the return will exceed the rate of inflation, as measured by the Bureau of Labor Statistics’ consumer price index.
B. Selection Procedure, Criteria and Length of Appointment of Investment
Managers
1. Investment Managers (managers) will be selected and appointed for a period of three years at the end of which their performance will be reviewed following which they will either be extended for a further three years or asked to participate in a competitive process for appointment for a possible further three years.
2. The selection process will be conducted by the Investment Committee who will recommend to the Board of
Trustees appointment of a new manager or reappointment of a previous manager based on the results of a proposal and interview.
3. The proposal to be submitted by the prospective managers will cover the following four points:
· the manager’s investment philosophy including the manager’s approach to socially responsive
investing.

· the manager’s proposed asset allocation strategy, if any, (i) in terms of the relative shares of equities and fixed income investments and the shares between different sectors and domestic and international; and/or (ii) the characteristics of mutual funds which would be used.
· information on past performance of funds managed
· fees
4. The proposal will also take into account that ASC annually withdraws a portion of its investments to support the current expenses of the church. This withdrawal is typically on the order of five percent of the portfolio value. The proposal shall commit the manager to implement an investment strategy that maintains sufficient liquidity to support annual withdrawals of this magnitude.
5. In addition, the proposal will confirm that the manager shall maintain a contingency plan describing how it would respond to extraordinary or emergency withdrawals in excess of this magnitude.
6. The minimum portfolio to be assigned to a manager will be one million dollars.
C Investment Management – Appointment and Reporting
1. The manager will receive a letter of appointment signed by the Chair of the Board of Trustees. The appointment letter will attach the proposal and will give both ASC and the manager the right to terminate the appointment with three months notice.
2. On at least a quarterly frequency, each manager shall provide a Portfolio Report including:
a) performance for the period with total return after fees,
b) most recent list of ASC’s portfolio holdings, and
c) asset allocation breakout.
3. Within one month of each calendar year end, each manager shall provide an Annual Investment Summary of their performance as managers and on the performance of the account. The manager shall meet with the ASC Investment Committee to discuss the report. At a minimum, the report shall include:
a) Financial Performance – the return achieved on the portfolio and any related information
b) Relationship Summary – Summary of original investment agreement including guidelines we
provided, original amount invested, subsequent investments and guideline revisions.
c) Customer Service Report: Summary of the manager’s adherence to agreed upon reporting,
responsiveness to requests including any resulting from ASC’s research, or purchases or sales
requests resulting from review of socially responsible investment criteria.
d) Organization Update: Changes in management, mergers, or other business changes that should
be considered in assessing the ASC’s option to continue or discontinue the relationship.
e) Recommendations: Manager’s views as to progress toward goals and manager’s
recommendations as to improvements in policy and procedures.
4. From time to time, ASC may instruct a manager in any one of the following three SRI criteria. Any such SRI constraint, including the amount and nature of the investments involved, shall be negotiated in advance with the manager to ensure the feasibility of implementation and consistency with the other portions of the portfolio under the manager’s control.
a) Shareholder Advocacy – ASC use the opportunity of its stock ownership to exercise its rights of
corporate democracy, to vote shares, submit shareholder proposals, and attend corporate
meetings. The manager shall support ASC in the exercise of these rights.
b) Positive Investment Screening – ASC may deliver to the manager a list of specific companies or
securities in which the manager shall be required to invest. The manager shall agree to invest
the minimum amount necessary to give ASC voting rights at the Company’s annual shareholder
meeting. Any investment above that amount shall be at the manager’s discretion. Any such list
shall supersede entirely any previously issued Positive Investment Screening list given to the
manager. The list may indicate a time period over which the investment constraint applies; if no
time period is indicated, the constraint shall be presumed to apply for the indefinite future.
c) Negative Stock Screening – ASC may deliver to managers who invest in individual stocks a list
of specific companies or securities in which the manager shall be forbidden to invest. Any such
list shall supersede entirely any previously issued Negative Investment Screening list given to the
manager. The list may indicate a time period over which the investment constraint applies; if no
time period is indicated, the constraint shall be presumed to apply for the indefinite future.
5. From time to time, ASC may impose additional portfolio restrictions derived from terms and conditions imposed by specific bequests to ASC. The manager shall diligently enforce such bequest constraints. Any such bequest constraint shall be discussed and agreed in advance with the manager to ensure the feasibility of implementation and consistency with the other portions of the portfolio under the manager’s control.