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Investment Management During the COVID-19 Turmoil

Lawyers throughout Greater Boston are demonstrating once again their talent for creatively addressing new and threatening challenges. It takes resources of all types to address the needs of clients and communities impacted by the COVID-19 pandemic. The Boston Bar Foundation provides financial and organizational support to fuel the work of experienced legal service providers and innovative projects. That support relies on the stewardship of the BBF’s financial resources and investment policies, even amidst the recent market turmoil.

The BBF’s financial strength has developed with generous support from generations of lawyers who value the support that stable financial resources provide to visionary legal services and projects. The BBF’s endowment (which approaches $5 million), IOLTA grants, and annual support from lawyers, firms, and other local enterprises finance the BBF’s support of local organizations, including its annual $1+ million grants program. Recent market shifts are being monitored carefully, consistently with the BBF’s mission to continue to be a source of reliable financial support.

Mindful that decades of stewardship contributed to the growth of the BBF’s endowment and other invested funds, the BBF’s leadership considers a long-term view in evaluating its investment strategy. The BBF’s Investment Committee oversees the investment of a portfolio approaching $7 million. The BBF’s investment advisor is Commonfund, an independent asset manager focused on non-profit organizations. Commonfund selects asset managers for $25 billion under its management, including the BBF’s equity and bond funds. The Investment Committee and Commonfund work together to seek a total return commensurate with the prudent investment management of similarly situated private, charitable endowment and foundation funds, in compliance with the standards of the Uniform Prudent Management of Institutional Funds Act and the BBF’s investment policy statement.

During the recent market disturbances, the BBF’s investment portfolio remained within a few percentage points of its 65%/35% target ratio for equity and fixed income investments. In late March, the Investment Committee met in special session with BBF leadership and Commonfund to discuss market conditions and to evaluate its approach. (Ordinarily, the Investment Committee meets quarterly.) Consistent with the approach taken by many other similar foundations, and with significant input from Commonfund and BBF leadership, the Investment Committee found that the BBF’s portfolio was positioned appropriately between equity and fixed income investments, and that no re-allocation was needed.

The BBF’s investment portfolio, like others of similar charitable organizations, fluctuates in value. The BBF’s spending policy takes into account the BBF’s liquidity needs and its long-term investment goals. Short-term market changes have minimal impact on the funds available to fund BBF’s operations and granting programs, because annual drawdowns are based on the portfolio value over a number of previous years. The BBF encourages and expects that its long- term growth will depend both on the foresight of past generations as well as the generosity of the lawyers of today and tomorrow. In the coming weeks and months, the Investment Committee expects to continue to monitor the market carefully and to work with Commonfund and BBF leadership to position the BBF’s investments so that they can continue to provide a resource for funding the legal services and projects that will help our region address the pandemic and its impact on our communities.

The members of the BBF Investment Committee are past and present members of the BBF Board of Trustees and other supporters of the BBF’s mission: John Clymer, John McManmon (Windhaven Strategies), John Donovan (Ropes & Gray LLP), Thomas Gallitano (Conn Kavanaugh Rosenthal Peisch & Ford, LLP), Deborah Manus (Nutter, McLennan & Fish LLP), Edward Seksay (Rockland Trust), Leiha Macauley (Day Pitney LLP), Suma Nair (Goulston & Storrs, P.C.), and Andrew Strehle (Brown Rudnick LLP).

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