SIEF Investment Strategies
Updated: Sep 25
Hello to all who call Shenandoah, Iowa, home. It has been almost six months since my last column, and oh my, have our environment and our world changed! Fortunately, I am not writing an update about the coronavirus, but I do want to share a couple of updates about our Shenandoah Iowa Education Foundation.
First, as all of you know by now, we have hired our first executive director, Jamie Burdorf. It is a privilege having Jamie join us and help lead our foundation board to new and exciting strategies to enhance the educational opportunities for our students and teachers. She is absolutely an awesome person who is full of energy and has many great ideas for us to consider. If you have not had the opportunity to meet Jamie yet, I hope you will soon.
Second, speaking of enhancing educational opportunities, we all know that our board’s mission is to raise funds to create an endowment that can be used for generations to come in sustaining and improving our Shenandoah Community Schools.
As you read in my column earlier this year, we received a significant gift of $250,000 from an anonymous donor at the end of 2019. Our board has been studying how best to invest not only that gift, but all the other contributions from many of you who have invested in our foundation. Those other contributions include our “Family Challenge,” our $100 Club, and one-time gifts.
After COVID-19 hit in March, we were all a little nervous about how much we should be placing in a longer-term investment fund and how much cash should retain to meet foundation expenses for annual scholarships, grants and operational costs. At the present time we have just under $400,000 that we can use for both a longer-term investment and for operating expenses.
One of the safe rules of investing is to make sure a foundation such as ours has enough cash to operate for at least one year, paying all expenses, if the market turns down like it has in 2020. Thus, the foundation wouldn’t have to “sell” any of its longer term investments and take a loss on them. So, to make a long story short, it is safest to keep enough cash to operate for a year and invest the rest in a longer-term investment.
As I write now, our foundation’s board has approved investing $300,000 of our current holdings into mutual funds that are geared toward generating dividend income.
Since the board approved that, we have done additional work on our annual budget to determine our annual needs to cover operating expenses. And we’ve received additional donations to the foundation. So, I predict we will invest another $50,000 into our longer-term investment very soon. We have the ability to continue to add to this investment at any time, like when the foundation receives additional contributions.
Obviously, the dividends on these investments can also help support our scholarships, grants, and operating expenses. We can also re-invest the dividends and continue to build our long-term investments.
Our board members all agreed we need to be conservative and safe with our investment decisions. We also want to invest where the costs of investing are low. Of course, we know that we need to take a little risk with our initial investment to gain a decent return, but we can’t afford too much risk. Our board also feels it is an important decision and step to move forward on investing the contributions you all have entrusted to us. And we feel it is important to let you know what we invest in, and why we are investing like we are.
Our endowment will continue to grow, our investments will continue to grow, and they will change over time as we learn how best to invest for the long-term success of our foundation. I want everyone to know we take your contributions seriously and appreciate your trust in our decisions.
If you have not joined us, I encourage you to make a contribution as we continue to make our Shenandoah schools even better!
On behalf of our foundation, we wish you all the very best. Stay safe. I will catch up with all of you on another column in the coming months. Be looking for a column from Jamie, too!
You can reach the foundation president by email right here: Corby.Fichter@fcsamerica.com.