You can also see the Foundation's most recent Form 990-PF, Return of Private Foundation and Form 990-T, Exempt Organization Business Income Tax Return, for the year ending December 31, 2016. The 2015 Form 990-PF, 2015 Form 990-T, 2014 Form 990-PF, and 2014 Form 990-T are also available. The 2017 Form 990-PF and 2016 Form 990-T will be available in December 2018.
Investment commentary for 2015
Investments and Audit
Global markets have been volatile over the recent few years, and notably in early 2016, creating a challenging investment environment from which to extract consistent returns over time.
The Foundation’s investment return in 2015 was 2.9 percent. The five- and 10-year investment returns were 8.3 percent and 6.0 percent, respectively. The Foundation’s long-term investment objective is to generate a real return in excess of the IRS minimum 5.0 percent payout requirement. The Foundation has maintained sufficient investment liquidity to meet its operating needs. The 2015 assets chart (in the slides below) summarizes investment asset values since 2005.
The Foundation’s investment program is coordinated by an Investment Committee of the Board comprised of three Board members and two non-Board members who have significant investment experience; a chief investment officer employed by the Foundation; and an outside independent investment advisory firm.
KPMG LLP serves as the independent auditors for the Foundation. The Foundation’s Finance and Audit Committee reviews the results of the audit examination and recommends to the Board for approval. The Finance and Audit Committee also reviews the related federal tax returns.
Payout (Qualifying Distributions as defined by IRS)
The Foundation’s payout policy utilizes a multiyear smoothing formula that softens the impact of volatile markets in determining its annual payout targets. Expected actual payout for 2015 is $42.0 million; target payout for 2016 is $43.5 million. The Foundation’s long term payout strategy is to continue to at least meet the required IRS minimum 5.0 percent payout over time.
The payments chart (in the slides below) gives payout by program area for 2016.
Our aim is to be a highly dependable and effective partner for Minnesota, North Dakota and South Dakota and the 23 tribal nations in the same geography. We expect that our investment and payout policies will provide the steady funding required by our program strategies in 2016 and beyond.