The Foundation's 2020, 2019 and 2018 audited financial statements are available for your review. The 2021 audited financial statements will be available in July 2022, and we expect future year-end audited financials to be available each July for the previous calendar year.
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, 2020. The 2019 Form 990-PF, 2019 Form 990-T, 2018 Form 990-PF and 2018 Form 990-T are also available. The 2021 Form 990-PF and 2021 Form 990-T will be available in November 2022.
Investment commentary for 2020
Investments and Audit
Global markets have been rising in recent years, creating better-than-expected returns for most foundations. That was especially true for 2020, despite the COVID-19 pandemic.
The Foundation's investment return for the one-year period ending December 31, 2020, including updated performance for its private investments, was 25.5%. The five- and ten-year investment returns ending December 31 were 16.3% and 12.3%, respectively. The Foundation's long-term investment objective is to generate a return in excess of the IRS minimum 5.0% payout requirement plus inflation. The Foundation has maintained sufficient investment liquidity to meet its operating needs and react to market conditions.
The Foundation's investment program is coordinated by an Investment Committee of the board, 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 filings.
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. The original targeted payout for 2021 from the smoothing formula was $49.8 million. The Foundation is intending to spend significantly more ($70+ million) in 2021 in response to racial injustice and COVID-19 community needs. Payout for 2020 was $50.4 million. The Foundation’s long-term payout strategy is to continue to meet or exceed the required IRS minimum 5.0% payout over time.
Our aim is to be a highly dependable and effective partner for Minnesota, North Dakota, South Dakota and the 23 Native nations that share the geography. We expect that our investment and payout policies will provide the steady funding required by our program strategies in 2021 and beyond.