The NAPPSA Endowment Fund is designed to create a steady guaranteed source of funding for running the programs, or operations of NAPPSA in a manner consistent with the stated mission of NAPPSA. The proceeds from the Endowment Fund may also be used for purposes specified by the donor(s) to the endowment. To maximize not only the short-term but also the long-term contributions to NAPPSA budgets, the NAPPSA Endowment Fund management is structured to optimize the three core pillars of the Endowment Matrix, namely:
- the fundraising strategy
- the spending strategy, and
- the investment strategy.
All of these are structured to fit the goals of the NAPPSA Endowment Fund and the needs of the NAPPSA organization and must be enforced via the governance and management structure of the endowment fund, as depicted in Figure 1. and will constantly be monitored by the NAPPSA Endowment Oversight Board.
The success of the NAPPSA Endowment Fund depends on our ability to raise funds to ensure its growth and sustainability. As conceived, the primary sources of inflows to the NAPPSA Endowment Fund include:
- NAPPSA B-2-B Rebate Earnings,
- Annual NAPPSA 5k Run/Walk
- Donations from NAPPSA members
- Donations from NAPPSA Endowment Partners and Sponsors.vinar dapibus leo.
The NAPPSA Endowment Oversight Board and the NAPPSA leadership continue to look for additional creative ways to source funds and sustain inflows to the NAPPSA Endowment Fund. The Endowment Board will also play a very vital role in driving the fundraising efforts to generate a steady inflow stream from the identified sources of inflows listed above.
The overall investment objective of the NAPPSA Endowment Fund is to maximize the return on invested assets while minimizing risk and expenses. This is done through prudent investing and planning, as well as through the maintenance of a diversified portfolio. This ensures that we preserve the long-term, real purchasing power of assets while providing a relatively predictable and growing stream of annual distributions in support of the institution. The Endowment Board recognizes that the strategic allocation of Portfolio assets across broadly defined financial asset and sub-asset categories with varying degrees of risk, return, and return correlation will be the most significant determinant of long-term investment returns and Portfolio asset value stability. Two key elements of our Asset Investment allocation policy are:
- NAPPSA Endowment Fund assets are managed as a balanced portfolio composed of two major components: an equity portion and a fixed income portion. The expected role of equity investments is to maximize the long-term real growth of Portfolio assets, while the role of fixed income investments is to generate current income, provide for more stable periodic returns, and provide some protection against a prolonged decline in the market value of equity investments.
- Cash investments will, under normal circumstances, only be considered as temporary Portfolio holdings and will be used for NAPPSA Endowment Fund liquidity needs or to facilitate a planned program of dollar-cost averaging into investments in equity and/or fixed income asset classes.
Outlined below are the long-term strategic asset allocation guidelines determined by the Endowment Oversight Board to be the most appropriate, given NAPPSA Endowment Fund’s long-term objectives and short-term constraints. Portfolio assets will, under normal circumstances, be allocated across broad asset and sub-asset classes in accordance with the following guidelines:
A clearly defined sustainable spending strategy is as important as thinking about the right investment strategy. How much an endowment distributes to the organization’s operating budget must be determined via a clearly stipulated spending rule. Details of our Spending Strategy is outlined in the Investment Policy Statement. Two key provisions of the Fund’s Spending Policy are:
- For the Purpose of making distributions, the NAPPSA Endowment Fund shall make use of a total-return-based spending policy, meaning that it will fund distributions from net investment income and net realized capital gains or dividends.
- The distribution of NAPPSA Endowment Fund assets will be permitted to the extent that such distributions do not exceed a level that would erode NAPPSA Fund’s real assets over time. The Endowment Board will seek to reduce the variability of annual Fund distributions by factoring past spending and Portfolio asset values into its current spending decisions. The Endowment Board will review its spending assumptions annually for the purpose of deciding whether any changes therein necessitate amending NAPPSA Endowment Fund’s spending policy, its target assets allocation, or both.
Our spending strategy also takes into account t the interest of those donors who want to be sure that their donations support the mission they gave the money for. So the NAPPSA Endowment Fund’s Annual Report is presented in a manner that clearly shows that all endowment donations dedicated to a specific purpose are utilized for the purpose specified by the donors.
The key to Success in the three key pillars of NAPPSA Endowment Fund—fundraising, investment, and spending strategy—are embedded in the governance structure of the endowment. The Endowment Oversight Board is the strategic body for oversight and accountability of the NAPPSA Endowment Fund. They work closely with Investment managers to set investment objectives and are responsible for setting the spending rules to ensure Fund’s sustainability. The Endowment Board will also be involved in driving the fundraising campaigns and generation of ideas on new fundraising channels.