Investment selection makes a big difference

When carefully selected, equities (stocks) perform well over the long-term, tending to grow in value - even more quickly when income is reinvested. An organization can invest in a well-diversified manner, then enjoy the fruits of its investment in the marketplace by claiming a portion of the increase in value (the capital gain) as income available for mission and ministry. With a Total Return-based Spending Policy in place, most investors see spendable income increase over time while their portfolios continue to grow. As the chart below illustrates, a diversified portfolio of well-chosen investments that includes equities can both protect an endowment against the effects of inflation and provide more money for ministry over the long term.

• Endowments can live for centuries
• Good stewardship claims a high priority
• Comparing Alternatives for Investment
• Investment selection makes a big difference
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