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This page presents an overview of financial information about the Foundation.
Click here to view the PDF version (3MB) of the Foundation's 2007 audited financial statements.
Investment objective and highlights
The Foundation’s long-term investment objective is to generate an inflation-adjusted return in excess of the mandated minimum 5.0 percent payout. Performance against this objective was satisfactory in 2007, with a net investment return of 8.0 percent against the 5.0 percent payout requirement and 2.9 percent inflation rate. The net investment return for the 10-year period ending December 31, 2007, was 8.7 percent, with an average 2.6 percent inflation rate during that period.
The Foundation continually adjusts its investment strategy to improve returns and reduce volatility so that it consistently meets the grantmaking needs of Minnesota, North Dakota and South Dakota. The asset allocation targets as of December 31, 2007, are noted in the pie chart (below) and will be changing in 2008 to further diversify the portfolio. The changes will include more direct investments, in lieu of funds of funds, and increased exposure to market-neutral alternative investments and real assets.
Investment performance
The Foundation’s investments totaled $900 million as of December 31, 2007, including a large hedge fund redemption initiated on December 31 that was subsequently redeemed in cash in 2008. The Foundation’s net investment return for 2007 was 8.0 percent. International equities and the Foundation’s two hedge funds of funds drove the 2007 returns, offsetting below-average performance in U.S. equities. The fourth quarter 2007 decline in the financial markets offset stronger performance in the first three quarters of the year. As noted in the bar chart (below), the Foundation’s three-, five- and 10-year investment returns were 11.8 percent, 15.0 percent and 8.7 percent, respectively.
Grantmaking efficiency
The Foundation’s grantmaking efficiency, as measured by the ratio of grant-related operating expenses to total payout (as defined by the Internal Revenue Code), was 11.6 percent in 2007, in line with other private foundations of similar size. The new strategic initiatives for 2008 may increase the operating expense ratio as the Foundation focuses on new program development.
You can click on the following links to view the Foundation's most recent Form 990-PF, Return of Private Foundation and 990-T, Exempt Organization Business Income Tax Return, for the year ending November 30, 2006. The 2007 returns will be available later in the year.
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