Barrington Area Community Foundation

SCOPE OF THIS INVESTMENT POLICY

This statement of investment policy reflects the investment policy, objectives, and constraints of Barrington Area Community Foundation.

PURPOSE OF THIS INVESTMENT POLICY STATEMENT

Define and assign the responsibilities of all involved parties, including the Investment Committee (See Investment Policy Review section on the following page).

Establish an understanding of the investment goals and objectives of the assets.

Offer guidance and limitations to the Investment Manager(s) and any Investment Consultant regarding assets.

Establish a basis for evaluating investment results.

INVESTMENT MANAGEMENT POLICY

Preservation of Capital

Risk Aversion

Adherence to Investment Discipline

Manage the assets according to prudent investor standards of common law and applicable statutory authority.

The “Investment Horizon” over which the investment objectives will be managed is 10 years.

INVESTMENT OBJECTIVES

To generate a total return that will meet or exceed over the Investment Horizon the rate of inflation (as measured by the Consumer Price Index) by 5%.

To emphasize long-term growth of principal while avoiding excessive risk. Short-term volatility will be tolerated in as much as it is consistent with the volatility of a comparable market index.

To achieve long-term growth of cash flow from dividend and interest income.

ASSET ALLOCATION GUIDELINES

Asset Class

Minimum

Maximum

Equities

50%

70%

Fixed Income

25%

45%

Cash and Equivalents

5%

10%

GUIDELINES FOR FIXED INCOME INVESTMENTS AND CASH EQUIVALENTS

Investment grade bonds rated BBB (or equivalent) or better.

Commercial Paper rated A1 (or equivalent) or better. Money Market Funds selected shall contain securities whose credit rating at the absolute minimum would be rated investment grade by Standard and Poors, and/or Moody's.

SELECTION OF INVESTMENT MANAGERS

All managers must be registered investment advisors under the Investment Advisors Act of 1940 or a bank or insurance company.

INVESTMENT MANAGER PERFORMANCE REVIEW AND EVALUATION

Performance reports generated by the Investment Manager(s) and any Investment Consultant shall be compiled at least quarterly and communicated for review.

If an Investment Consultant is utilized, comprehensive qualitative and quantitative evaluations of the Investment Managers shall be compiled by the Investment Consultant and reviewed annually.

POLICY TOWARD GIFTS

Gifts of financial assets will be converted to cash upon receipt. Gifts of non-financial assets (i.e. real estate, artwork, jewelry, etc.) will require full board approval before being accepted.

INVESTMENT POLICY REVIEW

To assure continued relevance of the guidelines, objectives, financial status and capital markets expectations as established in this statement of investment policy, the Board of Directors plans to review investment policy at least annually. Specific guidelines and implementation of the foregoing Investment Policy Statement is the responsibility of the BACF Investment Committee.

INVESTMENT COMMITTEE MEMBERS

Investments of the Barrington Area Community Foundation are managed entirely by directors of the board from major positions in financial management, with well over 100 years of experience. Currently, no management fees are paid. The members of the Investment Committee are as follows:

                Gil Reich, chairman
                Jonathan Hamill, former chairman and director still serving on the Investment Committee
                David Hirsch
                Andrew Kelleher
                James Lancaster
                David Nelson