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City Transfers Charitable Fund Management to Local Non-Profit

Published on Monday, July 8, 2013 | 5:49 am
 

The City of Pasadena’s housing department has transferred the management of a $1.8 million charitable fund to a local non-profit in an effort to increase the fund’s earnings.

The city’s housing department has been running the Housing Endowment Fund since 1992, using its proceeds to donate $110,000 to $115,000 to different local non-profit social service organizations every year. It has handed over the fund’s management to the Pasadena Community Foundation, a local foundation which establishes and manages philanthropic funds, according to a report in the Pasadena Star-News.

William Huang, the city’s housing department director, told the newspaper the endowment fund was projected to run out of distributable funds in about one year, prompting the move.

The charitable funds were being invested by the city with severe restrictions limiting any sort of “high risk investments.” A change in strategy was needed to continue the annual distribution of money, Huang told the newspaper.

Any increase in income will help the city fill the gaps left by the 38-percent drop in federal Community Development Block Grants over the past three years, he added.

As a public agency, the city could only invest in “extremely conservative bonds” and cash, meaning “virtually no returns to use to do their annual grant-making,” Jennifer DeVoll, the Pasadena Community Foundation’s executive director, told the Star-News.

Devoll said Huang came up with the idea that if the city transferred the fund to Pasadena Community Foundation, it could take advantage of a more diverse portfolio which includes more risk but also more reward, the newspaper reported.

Partnering with a long-established local non-profit foundation, with its greater investment muscle and flexibility, seemed like a “great fit” for the newly named Pasadena Assistance Fund, Huang told the newspaper.

Devoll said the foundation has a “disciplined approach to investment and, candidly, how we spend,” and has averaged a 7 percent return over the past 10 years, the Star-News reported.

Devoll added that the foundation also has partnership with several local non-profit organizations, including the Pasadena Art Alliance and the Casita del Arroyo Foundation, allowing them to pool their charitable funds with the foundation’s portfolio.

The city will retain an advisory role, and will still direct the grant-making, Huang told the newspaper.

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