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Investment philosophy and strategy for the Ford Foundation

1. What investment philosophy and strategy would be wise to best further the goals of the Ford Foundation?

2. Can Ford Foundation investment philosophy differ from that of a manager of a for-profit fund or from that of an individual investor? Explain.

3. Discuss such issues as:

? Attitudes towards risk

? Time horizons

? Market timing

? How your Ford Foundation investment philosophy might differ from that of a manager of a for-profit fund or from that of an individual investor.

4. Discuss any other issues facing those who manage the portfolios of major charitable foundations.

Solution Preview

The Ford Foundation is a New York City Based private foundation, which was incorporated in Michigan in the year 1936 by Henry and Edsel Ford. The current decline in the stock in stock and bond market caused a cut in the annual grant program for the Ford Foundation (Ford Foundation, 2010). For the effective investment philosophy, the board of trustee includes top business brains and a staff from internal and external sources, which helps in investment counsel. The investment philosophy of the business provides tax exempt status, which frees it from the capital gain factors. The current investment philosophy is the community investment philosophy. The investment in low income communities is beneficial for the organization as it expands the customer base, stabilize the workforce. It also helps to invest in corporate assets and build a strong relationship with the community.

In the current environment, every society is facing some critical issues related to the political, social and economic system. It requires the promotion of peace, sustainability of welfare and the welfare of human or community. The main objective or the goal of the foundation is to promote the integrity between the government, business sectors and nonprofit organization in order to meet the challenges. In order to accomplish the goals of foundation, the partnership with venture capital partners, who are community oriented, would be best investment philosophy for the foundation (Ford Foundation, 2010). The investment in the minority owned businesses and the promising inner city would also be the best investment philosophy for the Ford Foundation.

In order to accomplish the goals of the foundation the institutional endowment grant is designed in a manner, which helps to preserve and expand the purchasing power of the fund over the time. The partnership with the corporate would be wealth creating and for the welfare of communities. This investment philosophy attracts long term yield instead of the short term benefits (Sornette, 2006). All the investment policies and guidelines should be in written forms.

The investment philosophy of a manager for the for-profit fund has a great impact on the performance of the fund. The main objective of ...

Solution Summary

The investment philosophy and strategies for the Ford Foundation is examined