Investment Practice and Performance
Endowment gifts can be classified as True Endowments or Quasi Endowments. Both types of endowment gifts to San Diego State University are placed in the institution’s Pooled Endowment Fund for investment and oversight purposes. The Campanile Foundation Board of Directors has delegated decisions regarding the investment of the Campanile Foundation Endowment to the Finance & Investment Committee within a set of broad guidelines designed to preserve and augment the value of the endowment. The Board of Directors has adopted these broad investment objectives to preserve the long-range purchasing power of both the principle and income, providing intergenerational equity to both students and faculty.
The Board of Directors seeks investment returns through a diversified, professionally managed investment portfolio consistent with its approved Investment Policy Statement. To achieve its investment objective, the Campanile Foundation retains an independent investment consultant to provide ongoing evaluation of economic conditions, quarterly manager performance review, and to provide investment manager selection advice.
Investment managers are selected to pursue a specific portfolio management strategy. These firms are selected based on a number of factors, including the asset class in which they have expertise, the investment style they utilize, and historical performance. The Board sets the overall asset allocation targets and ranges through the Investment Policy Statement and the Finance & Investment Committee manages the portfolio within those parameters.
Overall investment performance and specific manager evaluations and reviews take place on a quarterly basis. The evaluation benchmark used for each manager is against the accepted benchmark for the asset class they have been given an allocation for, as well as, their performance within their peer group.
A major consideration in the management, investment, and evaluation of endowment funds is to ensure that The Campanile Foundation Board meets all of its fiduciary responsibilities to donors. This includes meeting all federal, state, and CSU regulations including the Uniform Prudent Management of Institutional Funds Act (UPMIFA).
The Board of Directors is responsible for determining the annual distribution rate of the Endowment Fund, which seeks to balance current income needs and long-term investment objectives. The distribution rate for the fiscal year 2018-19, is 4.0% of the three-year moving average of the market value. True endowment funds are set up by the donor to protect the principal in perpetuity. Only the earnings on the principal will be expended to meet the donor's philanthropic intent. Earnings will be based on the units held as of the end of the previous quarter. Should the market value of the true endowment in any quarter drop below the restricted/historical gift value, no spending distribution will be made in the following quarter. Quasi endowments are established to function as an endowment in that the principal is to be retained and invested to grow the funds; however, the entire principal and income may be spent at the discretion of the fund manager. Therefore, the quarterly distribution for a Quasi endowment differs from that of a True endowment in that the distribution is not limited to only available market value gains when the total market value of the endowment drops below the restricted/historical gift value.