NARGS Investment Policy

NORTH AMERICAN ROCK GARDEN SOCIETY INVESTMENT POLICY

Introduction

This statement of investment policy has been adopted by the Board of Directors of the North American Rock Garden Society to provide guidelines for the management of the Society’s financial resources.

NARGS should manage its finances in a manner that supports its core mission:

13031. cultivation, conservation, and knowledge of rock garden plants, their value, habits and geographical distribution

1. in good design and construction of rock gardens
1000. and exhibitions
7048334. exploration and introduction of new species and forms

8573135. of history and literature on the subject

373385425937373. between members and groups with the resultant mutual exchange of experience and knowledge.

Authority

The ultimate authority for this policy rests with the NARGS Board of Directors and the policy is administered by the AdCom which is responsible for matters related to budgeting and investing in consultation with the Investment Committee. Changes to this policy may be recommended by the Investment Committee and presented to the AdCom.  Final approval is required by the NARGS Board of Directors.

Day-to-day responsibility for managing the Society’s finances is vested in the Treasurer who is responsible for the Society's accounts; to see that all authorized financial obligations are met in an appropriate fashion; to keep records of receipts and expenses; to render accounting to the Board of Directors as required.

The Investment Committee will consist of a Chairperson, chosen by the President, the NARGS Treasurer and a minimum of one and a maximum of three additional committee members nominated by the Chair and approved by the AdCom. The Committee will make recommendations that will meet the needs of NARGS in the near and far term. The Committee shall recommend investments, in compliance with the NARGS Investment Policy, and direct the NARGS Treasurer to make such investments. Trading authority in the investment accounts shall rest with the treasurer and/or another member of the investment committee nominated by the Committee chair. The Committee shall present an annual review of NARGS investments to the Board of Directors.

At times, the use of a financial advisor may be considered. Individuals who act in this capacity must be recommended and approved by the AdCom. Due diligence in the selection process must include investigation of any conflicts of interest between the advisor and any member of the Board of Directors.

Segregation of Funds

The Assets of NARGS will be segregated into two main pools, Operating Cash (Cash in Banks), and the Investments.  The Investment Funds shall be further divided into the Unrestricted Funds, and the Restricted Funds.

Operating Cash

The objective of Operating Cash is to provide for cash flow sufficient to cover the ongoing financial obligations of the Society.

Since its focus is short-term in nature, operating cash will utilize accounts that stress liquidity and preservation of principal. As such, the Treasurer shall be authorized to hold the NARGS Operating Cash in deposit accounts in U.S. federally insured banks or savings and loans, or money market and sweep accounts and certificates of deposit through a brokerage account, not to exceed federally insured amounts.

While Operating Cash is designed as a low-risk segment, it should be managed with the objective of minimizing the amount held in this inherently low-return segment, and maximizing the return on that idle cash.  The Treasurer shall be responsible for maintaining an adequate level of operating cash.

The Investments

The Investment Funds shall be managed with differing strategies, maturities, and limitations as described below.

The Unrestricted Funds

The objective of the Unrestricted Funds is to assure cash availability sufficient to meet the financial obligations of the Society.  Although the investment focus for these funds is longer-term in nature, investment of the Unrestricted Funds should utilize investments that stress reasonable liquidity and preservation of principal. The Investment Committee shall be responsible for selecting appropriate investments and instructing the NARGS Treasurer to invest available Unrestricted Funds using the following approved vehicles:

Allowable Assets:

1. Cash

2. Fixed Maturity Investments:

            Treasury bills

            Money market funds

            Certificates of deposit (Not to exceed FDIC Insured Limits)

            US government and agency securities

            Corporate notes and bonds (investment grade)

            Mortgage-backed bonds (US Government & Agency Only)

3. Mutual Funds:

            Common Stock Funds

            Bond Funds (invested in approved assets listed in #2 above)

            Diversified Asset Funds

            Balanced Asset Funds

Investment management of the assets shall be in accordance with the following guidelines:

Equities: up to 80%; Fixed Income: 10-70%; Cash or Cash equivalents: 10 to 50%

While the investment of Unrestricted Funds is also intended as a low to moderate risk segment, it should be managed with the objective of achieving stable returns over the longest period.

The Restricted Funds

The purpose of the NARGS Restricted Fund is to:

53796527. the safety of funds whose principal is restricted as to use
4842184001. earnings that support the stated purposes of each fund

The objective of the Restricted Funds is to maximize returns with high security of principal, and it is understood that the prohibition of spending of the principal may mean that investments that are less liquid and/or longer in maturity may be used in order to achieve higher returns.

The Investment Committee shall be responsible for selecting appropriate investments using the following approved vehicles:

Allowable Assets:

1. Cash

2. Fixed Maturity Investments:

            Treasury bills

            Money market funds  

            Certificates of deposit (not to exceed FDIC insured limits)

            US government and agency securities

            Corporate notes and bonds (investment grade)

            Mortgage-backed bonds (US Government & Agency Only)

3. Mutual Funds:

            Common Stock

            Bond Funds (invested in approved assets listed in #2 above)

            Diversified Asset Funds

            Balanced Asset Funds

The Board of Directors has directed the Investment Committee to choose instruments so that 70% of Restricted Funds will be invested in equities. In investing the restricted funds, the Investment Committee should choose instruments that will produce distributable income such as interest and dividends that can be used to fulfill the objective of the underlying endowments while protecting the capital.

Investment management of the assets shall be in accordance with the following guidelines:

Equities: 30-95%; Fixed Income: up to 70%; Cash or Cash equivalents: investment % at the discretion of the Investment Committee.

In investing the restricted funds, the Investment Committee should choose instruments that will produce distributable income such as interest and dividends that can be used to fulfill the objectives of the restricted funds while protecting the capital.

General Guidelines and Limitations

Maturities of holdings should be distributed so as to meet anticipated liquidity needs while avoiding concentrations at any particular time period.

While borrowing is generally prohibited, in a financial emergency, short-term borrowing against certificates of deposit may be allowed, providing that the costs of such borrowing are less than penalty costs for early withdrawal. If such borrowing is necessary, it must be approved by the Board of Directors.

An investment must be liquidated if the level of loss reaches 50%.

The following investments and investment activities are prohibited:

1.  Private placements

2.  Letter stock

3.  Derivatives

4.  Margin transactions

Reporting