Investment Policy for AHCJ and Center for Excellence
The purpose of this policy is to ensure the day-to-day financial needs of the Association of Health Care Journalists (AHCJ) and the Center for Excellence in Health Care Journalism are met, while allowing the organizations to take advantage of opportunities to grow their assets. The underlying premise of this policy is to grow the organizations’ reserves in a responsible manner while respecting the principles of conflicts of interest to which they adhere.
The assets for AHCJ and the Center will be divided into two categories:
Operating Fund: Once a year, when figures from a given fiscal year are finalized, the executive director and treasurer will analyze available funds and set aside the equivalent of 18 months’ budget (based on expenses in the just completed year). At no point will this fund be allowed to dip below 12 months. The purpose of the Operating Fund is to provide sufficient cash to meet current financial obligations of the organizations in a timely manner. The objective of the Operating Fund is to preserve capital at no risk and a high level of liquidity. Restricted funds will not be counted toward the 18-month requirement; they will be governed by the agreements under which the funds were accepted.
Long Term Reserve Fund: The purpose of the Long Term Reserve Fund is to maximize growth. The Long Term Reserve Fund includes assets in excess of the Operating Fund and that is specifically designated by the Board of Directors for long term investment. The objective of the Long Term Reserve Fund is to achieve appreciable growth without jeopardizing the organizations’ core assets, at a minimum level of liquidity.
Note: As per earlier adopted policy, the Board will not consider creating an endowment until assets in both funds combined exceed three times the projected annual budget.
Prohibitions: No investments shall be made:
- in individual companies
- in mutual funds or other investment vehicles whose purpose is to invest exclusively or primarily in health care products and services, drugs or devices, or tobacco or alcohol products.
- in limited partnerships
- in derivative instruments
- in currency products
Operating Fund: Operating funds must be available for current fiscal year expenses and should be easily accessed and kept in cash and cash equivalents or highly liquid, low risk investments such as a federally insured bank account, government obligated money market accounts, certificates of deposit and notes issued by commercial banks, or taxable municipal bonds. The operating fund shall be managed by the Executive Director and fiscal officer, with reports to the board. The executive director, at his or her discretion, may seek advice from an investment advisor. If he or she chooses to do so, the procedures outlined below shall be followed.
Money placed into the Long Term Reserve Fund can be invested by the Executive Director and fiscal officer following the guidelines above, but it is anticipated that from time to time the services of a registered investment advisor may be sought to manage the Long Term Reserve portions of the organizations’ funds. The following procedure shall be followed to engage a new or replace a current registered investment advisor. The same procedure shall apply for both individually managed accounts and mutual funds (with the exception of money market mutual funds, government bonds, and certificates of deposit).
- The Finance Committee will recommend the hiring or replacing of an investment advisor to the Board of Directors.
- The Finance Committee will review the candidate(s) and make a recommendation to the Board of Directors, which shall have the final approval.
As a matter of good business practice, the Finance Committee will solicit competitive bids from investment managers every three years. The executive director and any member of the board or the Finance Committee shall disclose any relationship with any bidder and should recuse himself/herself from the selection process entirely.
The investment manager(s) is charged with designing, recommending and implementing an appropriate asset allocation plan consistent with the investment objectives, time horizon, risk profile, guidelines and constraints outlined in this policy. He or she will also give, at a minimum, quarterly reports to the Executive Director and Treasurer, as well as keep those officers advised of any material changes that could affect the organizations’ investments. The executive director will ensure any agreement with a financial advisor has a termination clause.
This policy will be re-evaluated twelve months after it is enacted.
Enacted April 2012 / Re-confirmed April 2013