[ORGANIZATION NAME]

Investment Policy Statement

[Month Year]

(Draft, Pending Board Approval)

Table of Contents

I. Background and Purpose

II. Investment Objectives

III. Distribution Requirements

IV. Governance: Roles and Responsibilities

V. Fiduciary Standards and Conflicts of Interest

VI. Asset Allocation and Manager Monitoring

VII. Adoption

Appendix A: Roles and Responsibilities (Detail)

Appendix B: Allowable and Non-Allowable Investments

Appendix C: Policy and Sub-Asset Class Allocation and Benchmarks

Appendix D: Mission-Related and ESG/DEI Screening Criteria (If Applicable)

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I. Background and Purpose

[Organization Name] (the “[Short Name]”) is a [one-line mission descriptor, e.g., 501(c)(3) public charity supporting ___]. The purpose of this Investment Policy Statement (“IPS”) is to establish guidelines for the ongoing oversight and management of [Short Name]’s investment assets (the “Fund”).

[If applicable: [Short Name] also maintains [name of affiliated pool, e.g., a Reserve Pool or donor-advised pool], which is governed by a separate investment policy. This IPS applies only to the Fund as defined above, and does not govern any pool of assets governed by a separate policy.]

The Fund’s investment portfolio consists of [assets with donor restrictions, both permanently endowed and restricted as to time or purpose, and assets without donor restrictions, a portion of which may be board-designated]. All investment assets are governed by the terms of this IPS. This IPS incorporates accountability standards used to monitor the portfolio’s investment program and to evaluate the contributions of the [Investment Consultant/Adviser] (the "[Investment Consultant/Adviser]").

This IPS provides guidelines to help achieve [Short Name]’s investment objectives, consistent with prudent management of investment assets in a fiduciary setting. This document governs the investments of the Fund and serves as a communication link between the [Board of Directors], the [Executive Committee], the [Investment Committee], [the Investment Team / Investment Staff, if applicable], and the [Investment Consultant/Adviser].

This IPS is not intended to be modified frequently, or in response to short-term market fluctuations. It will be reviewed [not less than annually] and amended, if appropriate, to reflect the investment objectives of the Board.

Specific purposes of this IPS include:

Assign and define responsibilities for all parties.

Establish a clear understanding of investment objectives.

Establish specific asset allocation guidelines and portfolio risk parameters.

Establish the basis for assessing investment performance.

Administer the portfolio in compliance with applicable fiduciary standards and laws governing nonprofit institutional funds.

Establish the appropriate time horizon for management of the investment assets.

II. Investment Objectives

The Fund’s investment time horizon is [perpetual], managed with a stated long-term time horizon of [X] years. The Committee has adopted a risk tolerance consistent with a [growth-oriented / moderate / conservative] institutional risk profile, appropriate to that time horizon and to [Short Name]’s ability to sustain program spending through a market downturn. The Committee recognizes that investment objectives may not be attained in every year, and that the Fund may produce significant over- or under-performance relative to the broader markets over shorter time periods; results are measured over rolling periods and full market cycles accordingly, rather than year to year.

A. Organizational Objective

The primary long-term investment objective of the Fund is to provide a net real return that supports the [Short Name] while preserving the purchasing power of the Fund. Accordingly, the Organizational Objective is to attain an average annual return (measured over rolling [ten]-year periods, net of all investment-related fees and expenses) not less than inflation (CPI) + [X]%.

B. Policy Objective

A secondary long-term investment objective is to attain an average annual return (measured over rolling [five]-year periods) equal to or greater than a market “Policy Benchmark” of [XX]% [Asset Class A] / [XX]% [Asset Class B], with [Index Name] as the [Asset Class A] benchmark and [Index Name] as the [Asset Class B] benchmark.

The Committee will evaluate the Organizational and Policy Objectives above over a full market cycle and over the rolling periods stated for each; neither objective is expected to be met in every individual year.

C. Mission-Related Objective [if applicable]

[If the [Short Name] has adopted diversity, ESG, faith-based, or other mission-related investment commitments: The Fund's investment program will additionally pursue [a stated mission-related objective, e.g., consideration of managers owned by women, minorities, or other underrepresented groups; exclusion of certain sectors; alignment with a stated faith tradition], with the same documented standing as the return and risk objectives above. The specific screens, tilts, or manager-diversity commitments implementing this objective are set out in Appendix D and will be reported on not less than annually.]

Peer Comparisons

The Committee will additionally assess performance of the Fund versus comparable institutional portfolios (gross and/or net of fees, as available). Such peer comparisons will focus on portfolios of similar size and similar asset allocation over comparable time periods.

III. Distribution Requirements

Distributions from the Fund are a Board-level decision, informed by the investment analysis described in this IPS. The Board will annually determine a maximum spending rate based on the needs of [Short Name] and periodic analyses undertaken by the [Investment Consultant/Adviser] at the direction of the Committee, consistent with the asset allocation established in Section VI. [Short Name] has a total return distribution policy, meaning that withdrawals are funded from both income and appreciation of investment assets.

The annual distribution rate, once determined by the Board, will be applied to the average of the market values of the Fund as of the end of the preceding [12–20] quarters, a smoothing methodology intended to minimize the impact of short-term market swings on the distribution amount. As of the adoption of this Policy, the distribution rate as defined above is established as up to and not to exceed [4.0–5.0]% annually. Additional provisions the Board has adopted with respect to distributions, if any, are set out in Appendix A.

Endowment Funds with Deficiencies

The Board intends to retain in perpetuity the original value of permanently endowed gifts. The Board acknowledges that the fair value of such funds may from time to time fall below their original value. Spending from such “underwater” funds is permissible under UPMIFA, subject to the Board’s prudent determination that such spending would be in the best interests of the [Short Name] and is not expected to permanently impair the original value of endowed gifts.

IV. Governance: Roles and Responsibilities

Clear definition of responsibility, authority, and accountability is critical to effective fiduciary oversight. Accordingly, this IPS defines the following roles for the parties responsible for the design, execution, and monitoring of the Fund. Each party named below is charged with carrying out this policy consistent with [Short Name]’s mission and any values-based investment goals it has adopted. Greater detail is provided in Appendix A.

A. Board of Directors (the “Board”)

The Board retains fiduciary responsibility for the prudent oversight of the Fund. It may delegate various Fund-related responsibilities to the [Executive Committee], the Investment Committee, and/or other qualified parties when in [Short Name]’s best interests.

B. [Executive Committee] (include only if this layer exists at your organization)

Directs and manages the affairs of the organization between meetings of the Board. Authorities include reviewing and approving the IPS; reviewing and approving Committee-recommended Adviser/Consultant and Custodian engagements; and reviewing Committee reports related to the Fund investment program.

C. Investment Committee (the “Committee”)

Responsible for the design, oversight, and implementation of [Short Name]’s investment activities. The Committee is responsible for creating and maintaining the IPS, selecting and engaging an [Investment Consultant/Adviser] and Custodian (subject to [Executive Committee / Board] approval), and monitoring the activities of the [Investment Consultant/Adviser].

D. Investment Consultant / Adviser

The [Investment Consultant/Adviser] assists the [Staff Liaison] and the Committee with their responsibilities under this IPS. [If discretionary:] It will recommend for Committee approval a detailed Portfolio Asset Allocation and will have discretion regarding day-to-day implementation of this Allocation consistent with this IPS, with specific limits on discretion applying to investments in private, illiquid, and proprietary funds.

[If non-discretionary:] It will recommend a detailed Portfolio Asset Allocation and specific Investment Managers / Funds for Committee approval, and will implement Committee-approved decisions.

In either case, the [Investment Consultant/Adviser] will monitor the Fund’s Investment Managers / Funds and complete due diligence on them on an ongoing basis, monitor compliance with this IPS, and perform other tasks as appropriate and consistent with this IPS or as otherwise directed by the Committee.

E. Investment Managers / Funds

The Investment Managers (including mutual funds and commingled investment pools and/or vehicles) selected by the [Investment Consultant/Adviser] will have discretion to purchase, sell, or hold the specific securities used to meet the investment objectives of their designated portfolios, and will, where applicable, act in accordance with prudent person principles with respect to the Fund’s assets, adhere to the investment strategy for which they were selected, and immediately report to the [Investment Consultant/Adviser] any finding against the firm or its principals by the SEC or any other regulatory authority.

F. Custodian

The Custodian (or one or more sub-custodians) will maintain custody of securities and separately managed accounts, collect dividend and interest payments, redeem maturing securities, and effect receipt and delivery following purchases and sales of securities.

G. [Director of Finance & Administration / Staff Liaison]

[Other staff members that may be designated] will support the Committee in fulfilling its responsibilities as described herein, and will ensure the accurate recording and reporting of all activities of the Fund.

Other specialists may be employed by the Board and/or Committee to assist in meeting fiduciary responsibilities. Reasonable and customary expenses for such experts may be borne by the Fund as deemed appropriate and necessary and as directed by the Board and/or the Committee.

V. Fiduciary Standards and Conflicts of Interest

The Board will adhere to the provisions of [State]’s Uniform Prudent Management of Institutional Funds Act (“UPMIFA” – [Code Citation]) in managing the Fund’s investment assets. UPMIFA requires that institutions “act in good faith, with the care that an ordinarily prudent person in a like position would exercise under similar circumstances.” The following factors set out under UPMIFA will be considered in managing and investing the Fund:

General economic conditions.

The possible effect of inflation or deflation.

The expected tax consequences, if any, of investment decisions or strategies.

The role that each investment or course of action plays within the overall investment portfolio of the Fund.

The expected total return from income and the appreciation of investments.

Other resources of the institution.

The needs of the institution and the Fund to make distributions and to preserve capital.

An asset’s special relationship or value, if any, to the charitable purposes of the institution.

UPMIFA provides standards regarding appropriate and reasonable costs; verification of relevant facts; appropriate decision-making; diversification; disposition of property; and the duty of individuals to use their skills or expertise in managing institutional funds.

All investment decisions are to be based solely on the best interests of the Fund. Fiduciaries, including Committee members and the [Investment Consultant/Adviser], must provide full disclosure regarding any potential conflicts of interest, as described below.

The Fund’s investment program will emphasize total return: the aggregate return from capital appreciation and dividend and interest income. The following sections set out guidelines regarding investment objectives, asset allocation, spending, risk management, and related areas.

Conflicts of Interest

Conflicts of interest will be avoided by Committee members, the [Investment Consultant/Adviser], and all other parties playing a management, oversight, or advisory role with respect to the Fund. Circumstances that could create a real or perceived conflict are to be avoided, and where such conflicts exist, they shall be disclosed to the Committee. All parties to which this paragraph applies are bound by a duty of loyalty and care, and all decisions are to be made only in the best interests of the [Short Name] and the Fund.

VI. Asset Allocation and Manager Monitoring

The Committee recognizes that the strategic allocation of the Fund across asset and sub-asset categories, with varying degrees of risk and return, will be the most significant determinant of long-term investment performance. The Committee expects performance to vary widely over shorter periods of time but intends to change asset allocation only when changes in spending policy or significant changes in the capital markets warrant it.

A. Policy Asset Allocation

The Committee has approved a Policy Asset Allocation, the broad asset allocation guideline intended to reflect the strategic return objectives and risk tolerance described in Section II. The Policy Asset Allocation, together with the illustrative sub-asset class detail and benchmarks used to implement it, is set out in Appendix C and is reviewed by the Committee not less than annually.

B. Portfolio Asset Allocation

The “Portfolio Asset Allocation” is the [Investment Consultant/Adviser]-recommended, Committee-approved detailed allocation to sub-asset classes. It will be presented to the Committee for approval not less than annually, in conjunction with a presentation of the [Investment Consultant/Adviser]’s current capital market assumptions and forward estimated portfolio returns, and will remain in compliance with the Policy Asset Allocation. Allowable and prohibited investments are defined in Appendix B.

C. Implementation and Monitoring

Recognizing the Fund’s [perpetual] nature, the Committee may, at its discretion, consider recommendations by the [Investment Consultant/Adviser] to employ private and illiquid investments, subject to a maximum allocation established by the Committee. The [Investment Consultant/Adviser] is responsible for rebalancing the portfolio to stay within the approved ranges, no less frequently than [quarterly], and for selecting, monitoring, and, where warranted, replacing Investment Managers / Funds consistent with this IPS.

Investment Managers, the [Investment Consultant/Adviser], and other service providers engaged by the Fund are monitored and evaluated on an ongoing basis using both quantitative and qualitative factors, assessed over full market cycles rather than short measurement periods or a fixed calendar. The [Investment Consultant/Adviser] will report to the Committee not less than [quarterly] on portfolio performance, risk, and positioning relative to the approved allocation, and will meet formally with the Committee not less than [quarterly].

VII. Adoption

To ensure continued relevance of the guidelines, objectives, and expectations expressed in this IPS, the Committee will review the IPS not less frequently than annually, making revisions as necessary. Committee-proposed amendments to this document require approval by the Board. It is not expected that short-term changes in the financial markets will require adjustments to this IPS; a proposed change prompted by recent performance rather than by a change in mission, time horizon, or financial circumstances should be tabled rather than adopted.

This Investment Policy Statement has been reviewed and approved by the Board and is agreed to and accepted:

[Investment Committee Chair] Date

[Treasurer / Staff Liaison] Date

[Board Chair] Date

Acknowledged:

[Adviser/Consultant Representative] Date

Appendix A: Roles and Responsibilities (Detail)

I. Investment Committee (the “Committee”)

The Investment Committee is responsible for recommending overall investment policies, monitoring investment performance, and recommending management contracts for approval by the Board. It is responsible for recommending the design, oversight, and implementation of the Fund’s investment activities, including:

Develop and maintain a comprehensive IPS.

Select, engage, and monitor a qualified [Investment Consultant/Adviser].

Define specific investment authorities to be granted to the [Investment Consultant/Adviser].

Review and approve the [Investment Consultant/Adviser]-recommended Portfolio Asset Allocation, amending if necessary.

Review, in advance of implementation, any investments in private, illiquid, or proprietary investments proposed by the [Investment Consultant/Adviser].

Select and engage a Custodian for safekeeping of the Fund's investments.

Review [Investment Consultant/Adviser] reports related to performance, Investment Managers / Funds, and Fund expenses.

Evaluate the [Investment Consultant/Adviser] on a periodic basis as established in this IPS.

Periodically report to the Board on matters related to the Fund's investments.

II. Investment Consultant / Adviser

Operating with [discretion / authority] over the funds for which authority has been delegated by the Board, the [Investment Consultant/Adviser] will:

Serve as a co-fiduciary with respect to all Fund-related investment matters.

Advise the Committee on issues pertaining to maintenance of the IPS.

Provide investment management services within the guidelines established in this IPS.

Recommend a Portfolio Asset Allocation that complies with the Policy Asset Allocation.

[If discretionary:] On an ongoing discretionary basis, select individual Investment Managers / Funds for inclusion in the portfolio, monitor their activities and performance, and prudently retain, terminate, or replace them.

[If non-discretionary:] Recommend individual Investment Managers / Funds for Committee approval, and monitor their activities and performance.

As appropriate, present to the Committee for review and approval recommendations regarding investment in private, illiquid, or proprietary investment vehicles.

Rebalance the portfolio no less frequently than [quarterly], taking care to stay within the Portfolio Allocations as approved by the Committee.

Provide an annual spending and capital market analysis to assist the Committee and the Board in establishing a spending rate for the year.

Inform the Committee of any changes in recommended investment strategy, changes in ownership, or other relevant changes.

Provide annually to the Committee a detailed analysis of total portfolio fees and expenses.

Meet [quarterly] with the Committee to review the Fund's investment results.

Provide [quarterly] reporting covering: economic and capital market commentary; Fund performance versus benchmarks; manager-level performance versus benchmarks and peers; performance attribution; a summary of activity and portfolio changes; asset allocation versus approved targets; a portfolio liquidity analysis; and data to any Committee-designated third-party performance review provider, in the form required.

III. Investment Managers

Investment Managers are expected to exercise discretion within the restrictions outlined in this Policy and their specific [Investment Consultant/Adviser]-approved mandate. Reporting to, and as directed by, the [Investment Consultant/Adviser], specific duties and responsibilities of the Investment Managers include:

Managing designated assets on a discretionary basis.

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

Communicating any major changes in investment strategy or other factors.

Reporting qualitative changes in the investment management organization.

Voting all proxies in a manner consistent with the long-term interests and objectives of the Fund; documenting such activity accordingly.

On request, disclosing brokerage commissions, including those under any soft dollar or commission-sharing arrangements.

If mutual or commingled funds are used, the [Investment Consultant/Adviser] will ensure that the selection of such funds complies with the intent of this IPS.

IV. [Director of Finance & Administration / Staff Liaison]

The [Staff Liaison], and any other staff members assigned, will monitor [Investment Consultant/Adviser] activities to ensure the Fund is managed in compliance with this IPS and that sufficient funds are available to provide cash as needed. Specific responsibilities include:

Monitoring service providers and reporting material issues to the Committee.

Ensuring the accurate recording and reporting of all Fund activities, including reconciliation of custodial statements with reporting received from the [Investment Consultant/Adviser].

Keeping the Committee adequately informed as to the Fund's investment balances.

Maintaining all documentation and materials related to the Fund and to the [Investment Consultant/Adviser].

Ensuring the preparation of financial statements and managing / overseeing investment-related audit issues.

Coordinating with the Committee to establish spending plans.

Communicating the [Short Name]'s spending plans to the [Investment Consultant/Adviser] on a timely basis.

Coordinating meetings, presentations, and discussions as required.

Preparing, or causing to be prepared, the Committee's meeting agendas and related materials.

Other matters as may from time to time be directed by the Committee.

V. Committee Composition and Terms [Optional]

The Committee will consist of [three to five] members. Members will serve terms of [X] years, and terms will be staggered so that approximately [one-quarter to one-third] of the Committee turns over every [five] years. The Chair will rotate no less frequently than every [X] years. Committee membership is a fiduciary appointment made on the basis of relevant experience and is separate from any donor recognition the [Short Name] may extend.

VI. Distribution Requirements (Detail) [Optional]

[Optional guardrail: The calculated distribution will not increase or decrease by more than [X]% from the prior year’s distribution, regardless of the rate produced by the smoothing calculation above.]

[Optional inflation adjustment: The distribution rate may alternatively be calculated as the prior year’s distribution amount adjusted for [CPI / an agreed inflation measure], subject to the floor and ceiling above.]

[Optional glide path: Any Board-approved change to the target rate, averaging period, or guardrails described above will be phased in over [two to three] years rather than applied in a single year.]

[Optional borrowing provision: The Fund may borrow temporarily against its assets to bridge a funding shortfall, subject to a maximum of [X]% of Fund market value, a stated repayment period of [X] months, and Committee-approved reporting on any outstanding balance at each quarterly meeting.]

[Optional stress test: At least annually, in conjunction with the asset allocation review, the [Investment Consultant/Adviser] will test the spending policy described above against a range of market scenarios, including extended drawdowns and elevated inflation, to confirm it continues to hold up outside the base case.]

Appendix B: Allowable and Non-Allowable Investments

Fund assets will be invested in accordance with the objectives stated in this IPS, taking into account cash-flow targets, risk tolerance, time frames, liquidity needs, and other relevant factors. The [Investment Consultant/Adviser] shall have discretion, within Committee-approved limits, for implementing the Portfolio Asset Allocation, including selection of Investment Managers / Funds.

Diversification across and within asset classes is the primary means of avoiding undue risk of large losses over long time periods. Investments will be broadly diversified regarding geography, economic sector, industry, number of holdings, and other investment characteristics. Only institutional-quality securities are eligible for inclusion in the portfolio. No greater than [10]% of portfolio assets may be invested in the securities of any single issuer, with the exception of securities issued or guaranteed by the [U.S. / applicable national] government.

Allowable Investments

Equity Securities: Common Stocks, American Depositary Receipts of non-U.S. companies, Stocks of non-U.S. companies, and Mutual Funds and ETFs comprised of such securities. [If approved by the Committee, may also include Private Equity investments in the form of Private Funds or other Illiquid Investments.]

Fixed Income Securities: Government and Agency Securities, Corporate Notes and Bonds, Mortgage-Backed Bonds, Collateralized Mortgage Obligations, Mutual Funds, and ETFs. [If approved by the Committee, may also include Private Credit investments in the form of Private Funds or other Illiquid Investments.]

Diversifying Assets: Investments not traditionally recognized as cash or cash equivalent, a mutual fund, exchange-traded fund, separately managed account or commingled fund, or private fund / illiquid investment representing allocations to equities, fixed income, or cash, or an individual stock, ADR, or bond listed on a recognized securities exchange. Examples may include business development corporation securities, hedge funds, private real estate, and real assets.

Cash Equivalents: Treasury Bills, Money Market Funds, Commercial Paper, Banker's Acceptances, Repurchase Agreements, and Certificates of Deposit.

Recognizing the Fund's [perpetual] nature and the potential merits of Private Funds and/or Illiquid Investments, the Committee may, at its discretion, consider recommendations by the [Investment Consultant/Adviser] to employ such investments. The maximum allocation to Private and Illiquid Funds will be established by the Committee.

Non-Allowable Investments / Transactions

The Committee may define certain non-allowable investments, categories of investments, and/or non-allowable transactions. [Sample: direct commodity futures speculation, uncovered options, securities-based margin borrowing for leverage. List your organization's specific restrictions here, whether risk-based, mission-based, or values-based.] While non-allowable investments will be explicitly prohibited within separately managed accounts, the Committee recognizes that disallowance of such investments in pooled vehicles, such as mutual funds, may not be practicable.

Appendix C: Policy and Sub-Asset Class Allocation and Benchmarks

The “Policy Asset Allocation” is the Committee-established broad asset allocation guideline, intended to reflect the strategic return objectives and risk tolerances the Committee deems appropriate for prudently pursuing the Fund’s Organizational Objective. The Committee has approved the following Policy Asset Allocation:

Illustrative Sub-Asset Class Detail

(ILLUSTRATIVE ONLY: sample figures; replace with your Committee-approved targets)

To be prepared by the [Investment Consultant/Adviser] for review, revision, and approval by the Investment Committee.

Appendix D: Mission-Related and ESG/DEI Screening Criteria (If Applicable)

[Include this appendix only if the Committee has adopted a mission-related objective under Section II.C. Delete it entirely if not applicable; do not leave it in as a placeholder with no content, which reads as an unfulfilled commitment.]

A. Screens and Exclusions

[List any sectors, industries, or issuer categories the Fund will not hold, e.g., producers of X, and whether the restriction applies to separately managed accounts only or is also requested of commingled and pooled vehicles.]

B. Manager Diversity Commitment

[If applicable: The Adviser/Consultant will consider managers with meaningful ownership by women, minorities, or other underrepresented groups as part of its manager selection and monitoring process, and will report to the Committee not less than annually on the diversity composition of the manager roster and on sourcing activity undertaken during the period.]

C. Faith-Based or Values-Based Criteria [if applicable]

[List any faith-based or values-based investment criteria the Fund follows, and the source of that guidance, e.g., a denominational investment policy.]

The [Investment Consultant/Adviser] will report to the Committee not less than [annually] on adherence to the criteria set out in this appendix, using the same reporting cadence described in Section VI.

A Few Closing Notes

Nothing here replaces qualified legal, tax, or investment counsel, and using this template does not create an advisory relationship with Crewcial Partners. Delete every guidance box, confirm every bracketed field, and have counsel review the completed document before it goes to your board.

Tell us what's missing. If a section of this template did not fit your organization, or a question came up that this guide did not anticipate, we would like to hear about it.

A companion piece, Good Governance: A Practical Companion to the IPS, addresses committee composition and rotation, delegation, and review discipline, the governance practices that make an IPS like this one work in practice.

Educational Use Only. This template and all materials within it are published by Crewcial Partners LLC for informational and educational purposes only. Nothing herein constitutes investment, legal, or tax advice, a solicitation, or a recommendation to buy or sell any security, to adopt any particular investment strategy, or to apply any specific spending rate. Sample language, illustrative figures, and organization names are for demonstration only and are not recommendations for any specific institution. All investment decisions should be made in consultation with qualified financial, legal, and tax professionals. Crewcial Partners LLC is a registered investment adviser with the SEC; registration does not imply a certain level of skill or training. Past performance is not indicative of future results. All investments involve risk, including possible loss of principal.