Spring 2015

GIVING ADVICEA Resource for Professional Advisors

10 C

olum

bus B

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vard

, 8th

Flo

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artf

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CT

0610

6

860-

548-

1888

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eque

sted

Har

tfor

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unda

tion

for P

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Giv

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Putt

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phila

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into

act

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to c

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e la

stin

gso

lutio

ns th

at re

sult

in v

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uniti

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dvic

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ngad

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Pla

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esig

n Ce

nter

, a fr

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com

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sour

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s, vis

it ht

tp://w

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arn

mor

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artfo

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ound

atio

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appe

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s, an

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d yo

ur v

oice

at:

ww

w.tw

itter

.com

/har

tford

fdn

ww

w.fa

cebo

ok.co

m/h

artfo

rdfo

unda

tion

Understanding the Hartford Foundation’s

Investment Objectives

and Strategy

How does the investment performanceimpact the Foundation’s ability toprovide grants to the community?

The Foundation’s spending policy and investment strategyare designed to work together to preserve the inflation-adjusted value of the portfolio over a long time horizon. The Hartford Foundation aims to achieve investmentreturns that preserve the long-term purchasing power ofthe endowment after grants and administrative expenseshave been paid. We measure portfolio progress toward thisgoal by comparing it to the Consumer Price Index plus 5 %(CPI+5 %). The Consumer Price Index is a broad measure ofthe level of inflation and the 5% refers to the spending ratearound which our spending policy is designed.

From September 1996, when systematic measurementof the Foundation’s investment returns commenced,through December 2014, the Corporate Portfolio hasreturned 7.9 % per year, net of investment managementfees. The Trust Portfolio produced a net return of 7.4 %annualized over that period. These returns compare withthe aforementioned current purchasing power goal of 7.7 %per annum over the same timeframe.

IntervIew wItH AlIson GrAnGer, cHIeF Investment oFFIcer At tHe HArtFord FoundAtIon

How does the Hartford Foundationmanage its investments?The Hartford Foundation for Public Giving is the steward of a sizable endowment intendedto benefit the Greater Hartford community. The Foundation’s Board of Directors andInvestment Committee oversee the managementof the endowment. Our Investment Committeecurrently has seven members and is chaired byBoard member Bob Goldfarb. Our Board chair,Yvette Meléndez, also serves on the committee in an ex-officio capacity.each of our committee members resides in our region, possesses anunderstanding of the Foundation’s investment objectives and constraints,and contributes his or her own sophisticated knowledge and expertise inone or more aspects of the institutionalinvestment business. Our collective goal is topreserve the long-term purchasing power of theendowment, as well as to provide funds forcurrent grants and expenses, by achieving long-term investment results that exceed theFoundation’s spending policy plus the rate ofinflation.

In formulating our investment strategy, weconsider past and expected future performance ofavailable asset classes. To enable the Foundationto continue to achieve our long-term investmentgoal and minimize downward swings in theportfolio’s value, the Foundation’s investmentphilosophy emphasizes portfoliodiversification. The Foundation’s current assetstrategy for the Corporate Portfolio, for example,

includes a 62% allocation to equities, 28% to fixed income, and 10% to return-enhancing strategies which include, but are not limited to, private equity,venture capital and hedge funds. This asset allocation is determined by theFoundation’s Investment Committee and reviewed by the Board; it is subject toannual review. Investing on a global basis enables the Foundation to expand theinvestment opportunities available to it while also reducing the risk thatoverexposure to one particular market will impair investment results.

Outside investment professionals, selected and monitored by theInvestment Committee and the Trustee Bank, manage the endowment. We seekto hire investment management firms offering a team of highly-experiencedinvestment professionals with a coherent investment philosophy. Ourideal active investment manager specializes in a particular market segment,employs a disciplined investment process involving thorough proprietaryresearch, and thoughtfully limits the amount of client assets they manage to asize that enables them to consistently achieve superior long term investmentresults. The Foundation retains investment managers we believe are superior intheir ability to assess the risk assumed versus the investment return available inthe securities purchased and the portfolios constructed for the Foundation.

As of the end of 2014, the endowment assets were invested by 32professional investment management firms.

what happened to the Hartford Foundation’s investments in 2014?The U.S. equity marketscontinued to set new highsin 2014, resulting in adouble-digit gain andmarketing the sixth straightyear of positive returns. The S&P 500 rose 13.7%,outperforming small-capequity indices and thosemeasuring the performanceof international equities.The Barclays CapitalAggregate Bond Index,

a broad measure of the US bond market, gained 6% for the year, led by adecline in US Treasury yields. The Citi World Government Bond Index in dollar-hedged terms performed even better with a2014 return of 8.35%. This fall in yields, theopposite of what most analysts had forecastfor the year, came against the backdrop ofstable global growth but significantly lowerinflation than had been anticipated. Inunhedged terms, the index declined by -0.5%during the year.

After two years of strong absolute andrelative performance of the HartfordFoundation’s Corporate portfolio, 2014 was ayear of consolidation and one in which theweakness of foreign currencies impactedportfolio returns significantly. During 2014,the Corporate portfolio posted aninvestment return of 3.6%. The Trust portfolio advanced 3.5%. This compareswith the aforementioned rise of 13.7% in the S&P 500 index, declines of 4.9%and 2.2% in the MSCI eAFe index and MSCI emerging Market equity index,respectively, and an advance in the Barclays Capital Aggregate Bond Index of 6%.

MEMBERS OF THE HARTFORD FOUNDATION’S INVESTMENT COMMITTEE

Robert B. Goldfarb*, ChairDavid MarksYvette Meléndez*^JoAnn H. Price*David M. RothCynthia SteerJohn Wright

Investment Advisor:Michael Miller, Colonial Consulting, LLC

* MeMBeR OF BOARD OF DIReCTORS^ ex-OFFICIO

to discuss any of the topics covered in this issue or otherways charitable giving can help your clients, please contactdeborah rothstein, J.d., senior philanthropic servicesofficer at 860-548-1888 x1019 or drothstein@hfpg.org.

we advise you to seek your own legal advice in connectionwith gift and planning matters. the Hartford Foundation does not provide legal or tax advice.

our collective goal is topreserve the long-termpurchasing power of theendowment, as well as toprovide funds for currentgrants and expenses, byachieving long-terminvestment results thatexceed the Foundation’sspending policy plus therate of inflation.

IntervIew wItH AlIson GrAnGer, cHIeF Investment oFFIcer At tHe HArtFord FoundAtIon

How does the Hartford Foundationmanage its investments?The Hartford Foundation for Public Giving is the steward of a sizable endowment intendedto benefit the Greater Hartford community. The Foundation’s Board of Directors andInvestment Committee oversee the managementof the endowment. Our Investment Committeecurrently has seven members and is chaired byBoard member Bob Goldfarb. Our Board chair,Yvette Meléndez, also serves on the committee in an ex-officio capacity.each of our committee members resides in our region, possesses anunderstanding of the Foundation’s investment objectives and constraints,and contributes his or her own sophisticated knowledge and expertise inone or more aspects of the institutionalinvestment business. Our collective goal is topreserve the long-term purchasing power of theendowment, as well as to provide funds forcurrent grants and expenses, by achieving long-term investment results that exceed theFoundation’s spending policy plus the rate ofinflation.

In formulating our investment strategy, weconsider past and expected future performance ofavailable asset classes. To enable the Foundationto continue to achieve our long-term investmentgoal and minimize downward swings in theportfolio’s value, the Foundation’s investmentphilosophy emphasizes portfoliodiversification. The Foundation’s current assetstrategy for the Corporate Portfolio, for example,

includes a 62% allocation to equities, 28% to fixed income, and 10% to return-enhancing strategies which include, but are not limited to, private equity,venture capital and hedge funds. This asset allocation is determined by theFoundation’s Investment Committee and reviewed by the Board; it is subject toannual review. Investing on a global basis enables the Foundation to expand theinvestment opportunities available to it while also reducing the risk thatoverexposure to one particular market will impair investment results.

Outside investment professionals, selected and monitored by theInvestment Committee and the Trustee Bank, manage the endowment. We seekto hire investment management firms offering a team of highly-experiencedinvestment professionals with a coherent investment philosophy. Ourideal active investment manager specializes in a particular market segment,employs a disciplined investment process involving thorough proprietaryresearch, and thoughtfully limits the amount of client assets they manage to asize that enables them to consistently achieve superior long term investmentresults. The Foundation retains investment managers we believe are superior intheir ability to assess the risk assumed versus the investment return available inthe securities purchased and the portfolios constructed for the Foundation.

As of the end of 2014, the endowment assets were invested by 32professional investment management firms.

what happened to the Hartford Foundation’s investments in 2014?The U.S. equity marketscontinued to set new highsin 2014, resulting in adouble-digit gain andmarketing the sixth straightyear of positive returns. The S&P 500 rose 13.7%,outperforming small-capequity indices and thosemeasuring the performanceof international equities.The Barclays CapitalAggregate Bond Index,

a broad measure of the US bond market, gained 6% for the year, led by adecline in US Treasury yields. The Citi World Government Bond Index in dollar-hedged terms performed even better with a2014 return of 8.35%. This fall in yields, theopposite of what most analysts had forecastfor the year, came against the backdrop ofstable global growth but significantly lowerinflation than had been anticipated. Inunhedged terms, the index declined by -0.5%during the year.

After two years of strong absolute andrelative performance of the HartfordFoundation’s Corporate portfolio, 2014 was ayear of consolidation and one in which theweakness of foreign currencies impactedportfolio returns significantly. During 2014,the Corporate portfolio posted aninvestment return of 3.6%. The Trust portfolio advanced 3.5%. This compareswith the aforementioned rise of 13.7% in the S&P 500 index, declines of 4.9%and 2.2% in the MSCI eAFe index and MSCI emerging Market equity index,respectively, and an advance in the Barclays Capital Aggregate Bond Index of 6%.

MEMBERS OF THE HARTFORD FOUNDATION’S INVESTMENT COMMITTEE

Robert B. Goldfarb*, ChairDavid MarksYvette Meléndez*^JoAnn H. Price*David M. RothCynthia SteerJohn Wright

Investment Advisor:Michael Miller, Colonial Consulting, LLC

* MeMBeR OF BOARD OF DIReCTORS^ ex-OFFICIO

to discuss any of the topics covered in this issue or otherways charitable giving can help your clients, please contactdeborah rothstein, J.d., senior philanthropic servicesofficer at 860-548-1888 x1019 or drothstein@hfpg.org.

we advise you to seek your own legal advice in connectionwith gift and planning matters. the Hartford Foundation does not provide legal or tax advice.

our collective goal is topreserve the long-termpurchasing power of theendowment, as well as toprovide funds for currentgrants and expenses, byachieving long-terminvestment results thatexceed the Foundation’sspending policy plus therate of inflation.

IntervIew wItH AlIson GrAnGer, cHIeF Investment oFFIcer At tHe HArtFord FoundAtIon

How does the Hartford Foundationmanage its investments?The Hartford Foundation for Public Giving is the steward of a sizable endowment intendedto benefit the Greater Hartford community. The Foundation’s Board of Directors andInvestment Committee oversee the managementof the endowment. Our Investment Committeecurrently has seven members and is chaired byBoard member Bob Goldfarb. Our Board chair,Yvette Meléndez, also serves on the committee in an ex-officio capacity.each of our committee members resides in our region, possesses anunderstanding of the Foundation’s investment objectives and constraints,and contributes his or her own sophisticated knowledge and expertise inone or more aspects of the institutionalinvestment business. Our collective goal is topreserve the long-term purchasing power of theendowment, as well as to provide funds forcurrent grants and expenses, by achieving long-term investment results that exceed theFoundation’s spending policy plus the rate ofinflation.

In formulating our investment strategy, weconsider past and expected future performance ofavailable asset classes. To enable the Foundationto continue to achieve our long-term investmentgoal and minimize downward swings in theportfolio’s value, the Foundation’s investmentphilosophy emphasizes portfoliodiversification. The Foundation’s current assetstrategy for the Corporate Portfolio, for example,

includes a 62% allocation to equities, 28% to fixed income, and 10% to return-enhancing strategies which include, but are not limited to, private equity,venture capital and hedge funds. This asset allocation is determined by theFoundation’s Investment Committee and reviewed by the Board; it is subject toannual review. Investing on a global basis enables the Foundation to expand theinvestment opportunities available to it while also reducing the risk thatoverexposure to one particular market will impair investment results.

Outside investment professionals, selected and monitored by theInvestment Committee and the Trustee Bank, manage the endowment. We seekto hire investment management firms offering a team of highly-experiencedinvestment professionals with a coherent investment philosophy. Ourideal active investment manager specializes in a particular market segment,employs a disciplined investment process involving thorough proprietaryresearch, and thoughtfully limits the amount of client assets they manage to asize that enables them to consistently achieve superior long term investmentresults. The Foundation retains investment managers we believe are superior intheir ability to assess the risk assumed versus the investment return available inthe securities purchased and the portfolios constructed for the Foundation.

As of the end of 2014, the endowment assets were invested by 32professional investment management firms.

what happened to the Hartford Foundation’s investments in 2014?The U.S. equity marketscontinued to set new highsin 2014, resulting in adouble-digit gain andmarketing the sixth straightyear of positive returns. The S&P 500 rose 13.7%,outperforming small-capequity indices and thosemeasuring the performanceof international equities.The Barclays CapitalAggregate Bond Index,

a broad measure of the US bond market, gained 6% for the year, led by adecline in US Treasury yields. The Citi World Government Bond Index in dollar-hedged terms performed even better with a2014 return of 8.35%. This fall in yields, theopposite of what most analysts had forecastfor the year, came against the backdrop ofstable global growth but significantly lowerinflation than had been anticipated. Inunhedged terms, the index declined by -0.5%during the year.

After two years of strong absolute andrelative performance of the HartfordFoundation’s Corporate portfolio, 2014 was ayear of consolidation and one in which theweakness of foreign currencies impactedportfolio returns significantly. During 2014,the Corporate portfolio posted aninvestment return of 3.6%. The Trust portfolio advanced 3.5%. This compareswith the aforementioned rise of 13.7% in the S&P 500 index, declines of 4.9%and 2.2% in the MSCI eAFe index and MSCI emerging Market equity index,respectively, and an advance in the Barclays Capital Aggregate Bond Index of 6%.

MEMBERS OF THE HARTFORD FOUNDATION’S INVESTMENT COMMITTEE

Robert B. Goldfarb*, ChairDavid MarksYvette Meléndez*^JoAnn H. Price*David M. RothCynthia SteerJohn Wright

Investment Advisor:Michael Miller, Colonial Consulting, LLC

* MeMBeR OF BOARD OF DIReCTORS^ ex-OFFICIO

to discuss any of the topics covered in this issue or otherways charitable giving can help your clients, please contactdeborah rothstein, J.d., senior philanthropic servicesofficer at 860-548-1888 x1019 or drothstein@hfpg.org.

we advise you to seek your own legal advice in connectionwith gift and planning matters. the Hartford Foundation does not provide legal or tax advice.

our collective goal is topreserve the long-termpurchasing power of theendowment, as well as toprovide funds for currentgrants and expenses, byachieving long-terminvestment results thatexceed the Foundation’sspending policy plus therate of inflation.

Spring 2015

GIVING ADVICEA Resource for Professional Advisors

10 C

olum

bus B

oule

vard

, 8th

Flo

orH

artf

ord,

CT

0610

6

860-

548-

1888

/ w

ww

.hfp

g.or

g

Non

pro

fitO

rgan

izatio

nU.

S. P

osta

gePA

IDH

artf

ord,

CT

Perm

it N

o. 10

17

Addr

ess S

ervi

ce R

eque

sted

Har

tfor

d Fo

unda

tion

for P

ublic

Giv

ing:

Putt

ing

phila

nthr

opy

into

act

ion

to c

reat

e la

stin

gso

lutio

ns th

at re

sult

in v

ibra

nt c

omm

uniti

es w

ithin

the

Grea

ter H

artfo

rd re

gion

.

To si

gn u

p fo

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ng A

dvic

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o to

w

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.hfp

g.org

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To a

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Pla

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Givi

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com

preh

ensiv

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sour

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s, vis

it ht

tp://w

ww

.hfp

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ect w

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artfo

rd F

ound

atio

nan

d ar

ea h

appe

ning

s, an

d ad

d yo

ur v

oice

at:

ww

w.tw

itter

.com

/har

tford

fdn

ww

w.fa

cebo

ok.co

m/h

artfo

rdfo

unda

tion

Understanding the Hartford Foundation’s

Investment Objectives

and Strategy

How does the investment performanceimpact the Foundation’s ability toprovide grants to the community?

The Foundation’s spending policy and investment strategyare designed to work together to preserve the inflation-adjusted value of the portfolio over a long time horizon. The Hartford Foundation aims to achieve investmentreturns that preserve the long-term purchasing power ofthe endowment after grants and administrative expenseshave been paid. We measure portfolio progress toward thisgoal by comparing it to the Consumer Price Index plus 5 %(CPI+5 %). The Consumer Price Index is a broad measure ofthe level of inflation and the 5% refers to the spending ratearound which our spending policy is designed.

From September 1996, when systematic measurementof the Foundation’s investment returns commenced,through December 2014, the Corporate Portfolio hasreturned 7.9 % per year, net of investment managementfees. The Trust Portfolio produced a net return of 7.4 %annualized over that period. These returns compare withthe aforementioned current purchasing power goal of 7.7 %per annum over the same timeframe.

Spring 2015

GIVING ADVICEA Resource for Professional Advisors

10 C

olum

bus B

oule

vard

, 8th

Flo

orH

artf

ord,

CT

0610

6

860-

548-

1888

/ w

ww

.hfp

g.or

g

Non

pro

fitO

rgan

izatio

nU.

S. P

osta

gePA

IDH

artf

ord,

CT

Perm

it N

o. 10

17

Addr

ess S

ervi

ce R

eque

sted

Har

tfor

d Fo

unda

tion

for P

ublic

Giv

ing:

Putt

ing

phila

nthr

opy

into

act

ion

to c

reat

e la

stin

gso

lutio

ns th

at re

sult

in v

ibra

nt c

omm

uniti

es w

ithin

the

Grea

ter H

artfo

rd re

gion

.

To si

gn u

p fo

r Givi

ng A

dvic

e, g

o to

w

ww

.hfp

g.org

/givi

ngad

vice.

To a

cces

s the

Pla

nned

Givi

ng D

esig

n Ce

nter

, a fr

ee,

com

preh

ensiv

e, o

nlin

e re

sour

ce fo

r pro

fess

iona

lad

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s, vis

it ht

tp://w

ww

.hfp

g.org

/pgd

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Conn

ect w

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s…Le

arn

mor

e ab

out t

he H

artfo

rd F

ound

atio

nan

d ar

ea h

appe

ning

s, an

d ad

d yo

ur v

oice

at:

ww

w.tw

itter

.com

/har

tford

fdn

ww

w.fa

cebo

ok.co

m/h

artfo

rdfo

unda

tion

Understanding the Hartford Foundation’s

Investment Objectives

and Strategy

How does the investment performanceimpact the Foundation’s ability toprovide grants to the community?

The Foundation’s spending policy and investment strategyare designed to work together to preserve the inflation-adjusted value of the portfolio over a long time horizon. The Hartford Foundation aims to achieve investmentreturns that preserve the long-term purchasing power ofthe endowment after grants and administrative expenseshave been paid. We measure portfolio progress toward thisgoal by comparing it to the Consumer Price Index plus 5 %(CPI+5 %). The Consumer Price Index is a broad measure ofthe level of inflation and the 5% refers to the spending ratearound which our spending policy is designed.

From September 1996, when systematic measurementof the Foundation’s investment returns commenced,through December 2014, the Corporate Portfolio hasreturned 7.9 % per year, net of investment managementfees. The Trust Portfolio produced a net return of 7.4 %annualized over that period. These returns compare withthe aforementioned current purchasing power goal of 7.7 %per annum over the same timeframe.