Investment Strategy for the Bright Future Foundation

The Bright Future Foundation is a nonprofit organization established to support educational programs across underserved communities. As part of its mission, the foundation maintains an endowment fund designed to generate income for its operational costs and scholarship initiatives. Currently, the endowment is valued at $100 million with a target spending rate of 4% annually. The foundation's investment committee is evaluating its asset allocation strategy to ensure that the endowment's long-term growth aligns with both its spending requirements and its risk tolerance.

Given the foundation's obligation to provide consistent financial support while also growing the principal amount over time, the investment committee is considering various investment vehicles and strategies. They recognize that a well-structured investment policy is crucial.