Community foundation among options for hospital proceeds

VALPARAISO — The Porter County Community Foundation handles funds for about 200 organizations, including the Boys and Girls Clubs of Porter County, The Caring Place and a wide array of county entities, including Memorial Opera House.

If the Board of Commissioners and the County Council decide to invest $100 million in hospital pro- ceeds with the foundation, the funds would go into aggressive investments to stay ahead of inflation and expenses, said Barb Young, the foundation’s president.

“If their goal is to preserve the principle into perpetuity, that’s what we do for all of our nonprofits,” she said.

While county officials have said they hope for a 5 percent return of $5 million, Young said that’s not a guarantee. With the endowment, any income stream would be over the long term.

Last year the foundation’s endowment generated a 20 percent return, but “in 2008, when the market collapsed, we had negative returns,” Young said, adding the foundation uses a 20-quarter average of fair market value in determining returns.

The foundation’s distribution policy is 5 percent, common for similar foundations across the country, she said. “It’s a distribution policy, not a rate of return.”

A consultant’s report offering options for how the county should invest the hospital proceeds gave the community foundation high marks, though it did mention that the council would not have control over how the money would be invested.

The foundation has the mechanisms in place to handle the money, if the council and commissioners want to take advantage of it, Young said.

“We have worked with the county in the past, but this is a much different situation,” she said.