Governance & Policy

Effective stewardship of assets is essential to Waco Foundation’s ability to fulfill its mission of building philanthropic funds in service to the community.

Governance of Investments

The Investment Committee of the Board of Trustees oversees Waco Foundation’s investments. This Committee consists of professionals trained in financial analysis and investment practices. It is the responsibility of the Committee to help the Board of Trustees ensure that Waco Foundation’s investments secure its future prosperity. The Committee’s goal is to ensure a steady stream of income to allow our discretionary funds to distribute 5% of the total fund balance each year without decreasing the purchasing power over time. This is achieved with a carefully designed, diverse asset allocation strategy which includes both active and passive investment management and a balanced approach to managing risk and return.

Waco Foundation’s investments are managed with the advice of Colonial Consulting, LLC; a firm hired in December of 2007 after an extensive national search. Colonial was ultimately chosen due to their extensive experience in managing other community foundations' assets. Colonial provides guidance in the selection and monitoring of Waco Foundation’s investments. Colonial is paid strictly on a fee basis, and does not receive any compensation from the managers with which the foundation invests its assets. Read Colonial Consulting's note to Waco Foundation donors about their organization's vision, mission and values.

Investment Committee members include:

  • Malcolm Duncan, Jr. - Chair
  • Sam Allison
  • Cara Chase
  • Kyle Deaver
  • David Dickson
  • Jim Haller
  • Bill Pakis
  • Tom Salome

Investment Fees

Waco Foundation charges funds up to 100 basis points (or 1%) annually (.25% community service fee and between 0.4% and 0.8% for investment fees).  One-fourth of this fee is charged quarterly, based on the fund’s quarter-ending market balance.  This charge does not support all of the costs of the investment and administration of the funds, so Waco Foundation subsidizes the fees and administration through its unrestricted fund.  These fees are supported with the intention of passing the potential earnings on to charitable causes in the community. 

The fees Waco Foundation pays for investment management are paid in different ways.  The fees charged by managers of traditional bonds and equities are generally a stated percentage of the assets that they manage. Waco Foundation is afforded “institutional rates” from these managers. Accordingly, the fees paid compare favorably to those paid by other investors.

Fees charged by managers of alternative asset classes (e.g., hedge funds, private equity funds and private real estate) typically consist of two elements. First, they charge a flat fee against the assets invested in their funds. Second, they are entitled to an incentive fee (a “carried interest”) that is earned based on performance of the investments. Fees charged by these managers are generally higher than those charged on traditional investments and increase when the manager performs well. The fees paid by Waco Foundation are comparable to those paid by other investors in these types of investments. Waco Foundation also incurs fees for the independent consultant and for securities custody services.

Overall, the total fees paid by Waco Foundation relating to the investment portfolio range from an effective rate of 5 to 142 basis points (i.e., .05% to 1.42%); the wide range in rates is related to whether or not the investment is actively managed or passively managed (passive investment managers charge much lower fees) and how much relative return the manager is expected to produce within its strategies.

Spending Policy

Waco Foundation has established a spending policy to simplify the process of grantmaking each cycle. This spending policy designates up to 5% of total assets, as determined on a 28-trailing quarter period, for grant making. This policy applies to both Waco Foundation’s Unrestricted Fund and other component funds that opt to define income in this manner.

Phone: 254-754-3404
Fax: 254-753-2887


1227 N. Valley Mills Drive
Suite 235
Waco, TX 76710

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