P.O. Box 612 Bel Air, MD 21014

Phone: 443.371.6062 cfharfordcounty.org

A copy of the current financial statement of the Community Foundation of Harford County is available by writing or calling at the address or telephone number above. Documents and information submitted under the Maryland Solicitations Act are also available, for the cost of postage and copies, from the Maryland Secretary of State, State House, Annapolis, MD 21401, or by calling 410.974.5534.

TO: Interested Investment Management Service Providers DATE: July 15, 2019 RE: Request for Proposals – Please respond by 4 p.m. EST on August 23, 2019 The Community Foundation of Harford County is requesting proposals for investment management services for the Foundation’s asset portfolio. Our Investment and Finance Committee is interested in learning about your firm, your services, and investment management style. BACKGROUND

The Community Foundation of Harford County, a 501(c)(3) nonprofit corporation founded in 2007 to promote and increase philanthropy by building and managing permanent endowments and gifts to meet the present and emerging needs of Harford County and its nonprofit community.

Donations to the Community Foundation of Harford County are used to support and enhance the quality of life in Harford County. Donors may contribute to a specific area of interest, to a specific fund, or to provide support for “best mission use.” The ability for multiple donors to aggregate donations for more impact is the very heart of community foundations, thus making a big difference with any contribution.

The Community Foundation of Harford County maintains well-diversified portfolios that are invested to preserve and enhance the value of these assets over time. The Community Foundation has assets approaching $2 million for which investment management services are being sought. The selected Investment Management Firm will manage the portfolios and advise the Investment and Finance Committee, on behalf of the CFHC Board of Directors, on asset allocation strategy and investment policy.

From our total assets we distribute approximately $100,000 annually in the form of grants to nonprofit organizations, scholarships to college-bound high school seniors and adult learners, and awards to provide direct services for individuals in our community.

Foundation funds are managed within a variety of component fund types, including unrestricted funds, field of interest funds, designated funds, donor-advised funds, agency funds, scholarship funds, and special projects funds.

The Community Foundation of Harford County applies its board-approved Spending Policy, currently 4% of the 12-month rolling average balance of each fund, to determine the amount available for distribution each year from its endowment funds. Additionally, the Foundation charges a quarterly administrative fee on each component fund held by CFHC at a rate determined by the fund type.

P.O. Box 612 Bel Air, MD 21014

Phone: 443.371.6062 cfharfordcounty.org

A copy of the current financial statement of the Community Foundation of Harford County is available by writing or calling at the address or telephone number above. Documents and information submitted under the Maryland Solicitations Act are also available, for the cost of postage and copies, from the Maryland Secretary of State, State House, Annapolis, MD 21401, or by calling 410.974.5534.

INVESTMENT PHILOSOPHY The Community Foundation of Harford County maintains a long-term horizon for the

majority of its investments. Our primary investment objective, as noted in the accompanying Investment Policy Statement, is to sustain the market value of assets net of spending and expenses, over a full market cycle.

CFHC seeks to: • Achieve a total return of 5% net of fees. • Obtain and maintain a level of programs and services through sufficient total return

that is reinvested and new funds that are added to keep pace with cost increases and program expansions.

• Maximum return within reasonable and prudent levels of risk. • Maintain an appropriate asset allocation based on total return policy that is

compatible with a flexible spending policy, while still having the potential to produce positive real returns.

Our Investment and Finance Committee maintains a macro view of the CFHC’s investment portfolio, focusing on risk tolerance and return expectations by working with the investment advisor to establish asset allocations and appropriate return benchmarks.

In addition to the accompanying Investment Policy Statement, the Foundation’s financial statements and tax filings are available upon request. For additional information, contact Rota L. Knott, CFHC executive director, at rknott@cfharfordcounty.org or 443-371-6062.

Investment Manager Request for Proposals

July 2019

Submission Process

The Request for Proposals (RFP) is available on the CFHC website at www.cfharfordcounty.org To be considered, one original proposal with signatures and one emailed copy of the complete

proposal must be submitted to CFHC by 4:00 p.m., August 23, 2019. Proposals may be mailed to P.O. Box 612, Bel Air, MD 21014, or dropped off during regular

business hours at 202 S. Main St., Bel Air, MD 21014. Emailed proposals must be sent torknott@cfharfordcounty.org

Who may apply? Any individual or firm that can successfully complete the application is eligible to apply. Applicants must be able to perform per the requirements of the CFHC Investment Policy and Spending Policy.

Review Process The CFHC Investment and Finance Committee of will review the proposals in August, select 3-5 proposals for face-to-face presentations and notify the selected candidate(s). Face-to-face presentations will take place in September. The Investment and Finance Committee will make a recommendation to the CFHC Board of Trustees, and CFHC anticipates making a final decision inOctober.

Attachments Attached to this RFP is a copy of the CFHC Investment Policy. Please use this document to reference the CFHC asset allocation and requirements of a CFHC Investment Manager.

Questions Questions regarding the RFP download and selection process may be addressed to Rota L. Knott,

CFHC executive director, at rknott@cfharfordcounty.org or 443-371-6062. Those with questionsabout the content of the RFP will be advised to provide their best answer based on theirinterpretation of the questions posed within the RFP. No additional guidance will be provided.

Investment and Finance Committee members and CFHC Trustees should not be contacted directlyabout the RFP or selection process.

Investment Manager Request for

Proposals July 2019

Please respond to each question posed, keeping the questions in the order presented.

Contact Information: 1. Primary Contact Name:2. Firm Name:3. Firm Address:4. Firm Website (local and national, if applicable):5. Primary Contact Email:6. Please provide a company brochure or other resource materials.

Investment Manager/Firm Profile 1. Please provide a brief history of the firm, including past and current ownership.2. Please describe the future growth strategy of your firm.3. Please list your firm’s principals and their professional backgrounds (include length of time in the

investment industry and with your firm).4. Please list the professionals (name and title) who will be directly involved with our account,

describe their expertise and experience, and what their role(s) will be.5. Please describe the resources your firm provides.6. Please describe the current client mix (pension, endowment, etc.), including the number of

managed fund accounts, average account size, and total assets under management. If applicable,provide assets under management for both your national and local operation.

7. Please list your experience with foundation and/or nonprofit investments.8. Please provide three foundation and/or nonprofit references from your current client base.9. Is your organization a subsidiary, parent, or affiliate of any other firm? If so, please provide details.10. Please provide a copy of your firm’s Form ADV Part I and II.11. Why is your firm uniquely qualified to service our account?

Service Provisions

1. Are you willing and able to report investment performance in person to the Community Foundationof Harford County on a quarterly basis in a format provided by the Foundation?

2. How soon after the quarter’s end can you provide performance information?3. Please provide samples of your standard performance report. How much variation is available from

your standard report?4. Describe any potential conflicts of interest the firm may have in working with CFHC.

5. Investment Managers must be willing to assume a partnership role in relation to the continuingasset development activities of the Foundation. What can you offer the Foundation and its donors?

6. Do you have a succession plan? If so, please provide a copy.

Investment Strategies 1. Please describe your equity and fixed income management styles (individual securities or mutual

funds, active versus passive, etc.)2. Please provide quarterly performance results for a balanced portfolio, most closely aligned with the

Community Foundation of Harford County Investment Policy and Spending Policy, for the past oneyear, five years, ten years and lifetime of the portfolio.

3. Please describe your asset allocation process.4. Please describe your due diligence process.5. Will you be able to construct a portfolio consistent with the Foundation’s Investment Policy and

Spending Policy?

Fees

1. Please provide your investment fee structure. Include mutual fund fees, custodial fees and servicefees.

2. Please describe any other costs or expenses we might incur with your firm.3. Please provide an example of your fee disclosure.4. Please provide your fee structure on an investment portfolio of $2M.

Miscellaneous

1. If applicable, please identify any current or pending litigation in which your firm is involved.2. Please describe all complaints received by the Securities and Exchange Commission and the National

Association of Securities Dealers. Has your firm been involved in litigation within the last five yearsor is there any pending litigation arising out of your performance? If your answer is yes, fully explain.

3. Has your firm been investigated by any state or federal regulatory or law enforcement agency in thelast 10 years? If yes, please describe in detail the substance and results of each investigation.

4. Has your organization been a party to any lawsuit, including suits involving malfeasance orprofessional negligence, within the last ten years? If so, please describe the substance and results ofeach suit.

5. Please provide copies of reports/audits (SSAE and SOC) around the firm's data security protocols.6. Are you registered with the SEC or a state securities regulator as an investment adviser? If so, have

you provided all the disclosures required under those laws?7. Please provide copies of all applicable licenses.8. Please provide evidence of bonding/insurance.

I attest that the information contained in this proposal is true and accurate to the best of my knowledge.

Signature ___________________________________ Date _______________________

POLICY: INVESTMENT POLICY STATEMENT

Approved: January 8, 2008

Reviewed and Approved:

Reviewed and Revised: September 3, 2013; April 8, 2019

I. DEFINITIONS PURPOSE The purpose of this Investment Policy Statement (IPS) is to assist the Community Foundation of Harford County (CFHC) in effectively supervising, monitoring, reporting and evaluating the management of CFHC assets consistent with IPS investment objectives. In keeping with CFHC bylaws, the board of directors has created an Investment Committee that will oversee the CFHC investment portfolio. The IPS will be reviewed at least annually by the Investment Committee who will make recommendations to the full board of directors regarding revisions. FIDUCIARY DUTY All members of the CFHC Investment Committee have a legal responsibly for wisely overseeing the investment of CFHC funds. In seeking to realize the investment objectives set forth in this IPS, CFHC Investment Committee members must exercise due diligence. Committee members are expected to take sufficient steps to inform themselves in making decisions, to act with the care, skill, and prudence of a reasonable person in like circumstances, and comply with the law and CFHC governing documents. All investment actions and decisions must be based solely in the interest of the CFHC. Fiduciaries must provide full and fair disclosure to the CFHC Board of Directors of all material facts regarding any potential conflicts of interests. DEFINITION OF DUTIES Foundation Board of Directors The CFHC Board of Directors has ultimate fiduciary responsibly for the investable assets of the foundation. As a fiduciary, the primary responsibilities of the foundation board are:

1. Prepare and maintain an investment policy statement to ensure appropriate policies governing the management of the portfolio are in place and implemented.

2. Prudently diversify accounts assets to meet an agreed upon risk/return profile. 3. Prudently select investment option. 4. Control and account for all investment, record keeping and administrative expenses

associated with the accounts.

Community Foundation of Harford County Investment Policy Statement Page 2 of 7

5. Monitor and supervise all service vendors and investment options. 6. Avoid prohibited transactions and conflicts of interest.

Investment Committee The Investment Committee is a committee comprised of representatives from the Board, staff, the community and the Investment Advisor. They are responsible for overseeing the management of Foundation assets and implementing the investment policy set forth in the Investment Policy Statement. They shall act solely in the best interest of the Foundation and in concert with the mission of the Foundation. They are authorized to engage the services of investment professionals. The Investment Committee’s responsibilities include:

1. Setting and revising investment policies that the Board must approve. 2. Ensure an annual review of the Investment Policy Statement is reported annually to the

Board. 3. Developing investment objectives, asset allocation strategies and performance

guidelines. 4. Selecting Investment Consultants, Advisors, Money Managers and/or Custodians. 5. Reviewing and evaluating investment results as least quarterly and approving changes

as needed. 6. Providing periodic performance reports to the Board, at least annually.

Investment Managers As distinguished from the Board or Investment Committee, who are responsible for managing the investment process, investment managers are co-fiduciaries responsible for making investment decisions (security selection and price decisions). The specific duties and responsibilities of each investment manager are:

1. Manage the assets under their supervision in accordance with the guidelines and objectives outlined in their respective Prospectus or Investment Agreement.

2. Exercise full investment discretion with regard to buying, managing, and selling assets held in the portfolios.

a. If managing a separate account (as opposed to a mutual fund or a commingled account), to seek approval from the Foundation prior to purchasing and/or implementing the following securities and transactions: Letter stock and other unregistered securities; commodities or other commodity contracts; and short sales or margin transactions.

b. Securities lending; pledging or hypothecating securities. c. Investments in the equity securities of any company with a record of less than

three years' continuous operation, including the operation of any predecessor. d. Investments for the purpose of exercising control of management.

4. Vote promptly all proxies and related actions in a manner consistent with the long-term interest and objectives of the Accounts as described in this IPS. Each investment manager shall keep detailed records of the voting of proxies and related actions and will comply with all applicable regulatory obligations.

Community Foundation of Harford County Investment Policy Statement Page 3 of 7

5. Communicate with the Foundation all significant changes pertaining to the fund it manages or the firm itself. Changes in ownership, organizational structure, financial condition, and professional staff are examples of changes to the firm in which the Foundation is interested.

6. Effect all transactions for the Portfolio subject "to best price and execution." If a manager utilizes brokerage from the Portfolio assets to effect "soft dollar" transactions, detailed records will be kept and communicated to the Foundation.

7. Use the same care, skill, prudence, and due diligence under the circumstances then prevailing that experienced investment professionals acting in a like capacity and fully familiar with such matters would use in like activities for like Portfolios with like aims in accordance and compliance with Uniform Prudent Investment Act and all applicable laws, rules, and regulations.

Custodian Custodians are responsible for the safekeeping of the Portfolio’s assets. The specific duties and responsibilities of the custodian are:

1. Maintain separate accounts by legal registration. 2. Value the holdings. 3. Collect all income and dividends owed to the Portfolio. 4. Settle all transactions (buy-sell orders) initiated by the Investment Manager. 5. Provide monthly reports that detail transactions, cash flows, securities held and their

current value, and change in value of each security and the overall portfolio since the previous report.

II. OBJECTIVES The performance objective is to sustain the market value of assets net of spending, and expenses, over a full market cycle (defined as a three to five year period) without undue exposure to risk. CFHC seeks to:

1. Achieve a total return of 5% net of fees. 2. Obtain and maintain a level of programs and services through sufficient total return that

is reinvested and new funds that are added to keep pace with cost increases and program expansions.

3. Maximize return within reasonable and prudent levels of risk. 4. Maintain an appropriate asset allocation based on a total return policy that is

compatible with a flexible spending policy, while still having the potential to produce positive real returns.

RISK TOLERANCES CFHC recognizes and acknowledges some risk must be assumed in order to achieve the long-term investment objectives of the portfolio. It further recognizes there are uncertainties and complexities associated with modern investment markets. In establishing the risk tolerances for this IPS, CFHC’s ability to withstand short and intermediate term variability was considered. CFHC’s prospects for the future, current financial condition and level of funding in the portfolio

Community Foundation of Harford County Investment Policy Statement Page 4 of 7 suggest collectively minimal interim fluctuations in market value and rates of return may be tolerated with the portfolio in order to achieve longer-term objectives. TIME HORIZON The investment guidelines for the portfolio are based upon an investment horizon of an indefinite number of years. STRATEGY The Portfolio is expected to endure into perpetuity and inflation is a key component in its Performance Objective. Therefore the long-term advantage of investing in equity securities outweighs their associated short-term volatility (risk). As a result, the majority of assets will be invested in equity or equity-like securities (alternative investments). Fixed income securities will be used to lower the short-term volatility of the portfolio and to provide income stability, especially during periods of weak or negative equity markets. Cash is not a strategic asset of the portfolio, but is a residual to the investment process and used to meet short-term liquidity needs. Deliberate management of the asset mix among classes of investments is both a necessary and desirable responsibility. In making asset allocation judgments, the Committee is not expected to seek to "time" subtle changes in financial markets, or to make frequent or minor adjustments. Instead, the Committee is expected to develop and adopt expressed guidelines for broad allocations on a long-term basis, in light of current and projected investment environments. In the allocation of assets, diversification of investments among asset classes that are not similarly affected by economic, political, or social developments is a highly desirable objective. The Committee’s general policy shall be to diversify investments within equity and fixed income securities, in addition to alternative investments so as to provide a balance that will enhance total return. REBALANCING In maintaining these asset allocation targets, the Portfolio will strive to remain within the allocation ranges with the intent of rebalancing to targets annually, more frequently if necessary. The appropriateness of this allocation will be reviewed annually. SPENDING POLICY FOR ENDOWED FUNDS

Spending for donor-advised funds will be in accordance with IRS requirements. Distributions from funds that are not donor-advised will be made in accordance with CFHC’s spending policy for endowed funds, which sets an annual spending rate that is based on the community foundation’s projection of return on investments and that takes into account inflation, the community foundation’s administrative fee and other fund expenses.

Community Foundation of Harford County Investment Policy Statement Page 5 of 7 ASSET ALLOCATION POOLS

CFHC Pool ASSET CLASS TARGET ACCEPTABLE RANGE U.S. Equities 50% 30% - 70% Non U.S. Equities 15% 5% - 25%

TOTAL EQUITIES 65% 35% - 95%

Fixed Income 20% 10% - 30% Alternative Investments 10% 0% - 20% Cash Equivalents 5% 0% - 10%

TOTAL FIXED INCOME 35% 10% - 60%

Diversification: In order to achieve a prudent level of portfolio diversification, based on market value, the following restrictions apply: Fixed Income

1. With the following exception, Endowment Fund assets may be invested only in investment grade bonds rated BAA or higher and in cash equivalents rated A1/P1 or higher and in money market funds rated AAA (or if unrated, considered by the Manager to be equivalent to a AAA rating of quality). Up to 10% of the fixed income portfolio may be invested in bonds rated below investment grade, but no lower than B.

2. No more than 5% of the total portfolio shall be invested in any single security or in any single security or in securities of any single issuer, with the exception of securities of the U.S. Government and its agencies.

3. The weighted average duration of bonds shall not exceed 15 years. 4. The exception to items 1-3 immediately above will be the Foundation’s investment in

bond funds. Equities

1. No more than 25% of the equity portfolio may be invested in any single industry as defined by Standard & Poor’s.

2. No more than 5% of the total portfolio shall be invested equity securities of a single company, measured at cost, and never to exceed 10% of market value.

3. The exception to items 1 and 2 immediately above will be the Foundation’s investment in equity mutual funds.

Other Restrictions The investment manager may not:

1. Acquire any security subject to any restrictions on its sale or subject to any investment representation.

2. Use margin or otherwise borrow funds for the acquisition of any security.

Community Foundation of Harford County Investment Policy Statement Page 6 of 7 III. IMPLEMENTATION The Investment Committee can select investment managers, consultants, advisors, and/or mutual fund investments based on but not limited to the following criteria:

1. past total performance, 2. relative performance to industry benchmarks, 3. tenure and experience, and 4. volatility as determined by beta and standard deviation.

MANAGER PERFORMANCE OJECTIVES All investment returns shall be measured net of fees. Each investment manager, consultant, or advisor will be reviewed on an ongoing basis and evaluated upon the following criteria:

1. Ability to meet or exceed the median performance of a peer group of managers with similar styles of investing;

2. Ability to exceed the return of the appropriate benchmark index and, for equity managers, produce positive alpha (risk-adjusted return) within established volatility limits;

3. Adherence to the guidelines and objectives of this Investment Policy Statement; 4. Avoidance of regulatory actions against the firm, its principals or employees; and 5. Continuity of investment professionals.

IV. MONITORING AND REPORTING INVESTMENT MANAGERS Open communication between the investment managers, the Foundation and its consultant are critical to the success of the Foundation. The following shall be provided by the manager in its annual meeting with the Committee:

1. A written review of key investment decisions, investment performance and portfolio structure.

2. An organizational update, including a report on any and all changes in organizational structure, investment personnel and process and a list of new relationships or clients that have terminated their services.

3. A review of the managers understanding of investment guidelines and expectations and any suggestions to improve the policy or guidelines.

In addition, the following is required of each investment manager:

1. Quarterly performance within fifteen business days following each quarter end; 2. Immediate notification to the Foundation and its consultant of any exceptions to this

investment policy statement with a recommended plan of action to correct the violation; 3. Annual summary of proxy voting and soft dollar brokerage as defined in the respective

sections of this Investment Policy Statement; 4. Immediate notification of any litigation relative to the investment manager’s business; 5. Immediate notification of changes in the status of key personnel; and 6. Other reports or information as may reasonably be requested by the Foundation or its

consultant.

Community Foundation of Harford County Investment Policy Statement Page 7 of 7 CONSULTANT The Investment Consultant is responsible for assisting the Committee in all aspects of managing and overseeing the Foundation's investment portfolio. The consultant is expected to be the primary source of investment education and investment manager information. On an ongoing basis, the consultant will:

1. Provide the Committee with quarterly performance reports within 45 days following the end of the quarter;

2. Meet with the Committee quarterly, more frequently as needed; 3. Monitor the activities of each investment manager or investment fund; 4. Provide the Committee with an annual review of this Investment Policy Statement, including

an assessment of the Foundation's current asset allocation, spending policy and investment objectives; and

5. Supply the Committee with other reports or information as reasonably requested. V. ACKNOWLEDGEMENT A copy of this policy shall be provided to and made a part of the contract with all consultants, advisors, and managers. This investment policy has been adopted by the Board of Directors on January 8, 2008, and amended on September 3, 2013.