In 1998, Direct Relief’s Board of Directors established a Board-Restricted Investment Fund (BRIF) to help secure the organization’s financial future and provide a reserve for future operations. The BRIF, established with assets valued at $774,000, draws resources from Board-designated unrestricted bequests and gifts, and returns on portfolio assets.
In October 2006, the Direct Relief Foundation was formed and incorporated in the State of California as a separate, wholly controlled, supporting organization of Direct Relief. Effective April 1, 2007, assets in the BRIF were transferred to the Foundation. The Foundation’s investments are managed by SEI Private Trust Company, an investment firm under the direction of the Foundation’s Investment Committee, which meets quarterly and oversees investment policy and performance.
The Board has adopted investment and spending policies for the BRIF assets that attempt to provide a predictable stream of funding to Direct Relief while seeking to maintain the purchasing power of these assets. Under this policy, as approved by the Trustees of the Foundation, the BRIF assets are invested in a manner that is intended to produce results that provide a reasonable balance between the quest for growth and the need to protect principal. The Foundation expects its BRIF funds, over time, to provide an average rate of return of approximately five percent annually. Actual returns in any given year may vary from this amount.
The Foundation, to satisfy its long-term rate-of-return objectives, relies on a total return strategy in which investment returns are achieved through both capital appreciation (realized and unrealized) and current yield (interest and dividends). The organization targets a diversified asset allocation balanced between equity and fixed income investments to achieve its short-term spending needs as well as long-term objectives within prudent risk constraints.
The Foundation has a policy of appropriating for distribution each year at least five percent of the assets of the BRIF. In some instances, the Board may decide to appropriate an amount greater than its stated policy if it is specifically deemed prudent to do so. For Fiscal Year 2020, the Foundation Trustees approved a distribution of funds to pay for Direct Relief’s fundraising expenses and the salary of the President and CEO. Upon a majority vote by the Board, the BRIF may also be utilized to meet other general operational costs, extraordinary capital expenses, and advance emergency relief funding as determined by the President and CEO.