How portfolio rebalancing works

With the Foundation Source DAF platform, client donor-advised fund investment portfolios are automatically rebalanced in two instances:

• Rebalancing when client activity occurs

• Rebalancing for alignment with target allocation

This means, as their PCA, you do not need to worry about actively monitoring the individual assets in a client's donor-advised fund account portfolio. You also do not need to manually raise cash to fund client grantmaking efforts.

Instead, you can focus on what matters - making appreciated asset contributions on behalf of clients, selecting the portfolio that best serves your clients giving strategy, sharing meaningful giving opportunities, and more.

Rebalancing when client activity occurs

Every time an action occurs on a client account, their account balance will automatically rebalance to ensure sufficient cash is available and their target allocation is met. This includes:

• When a contribution is made or on their behalf: when additional balance is added to a client's Invested account, the new funds will be used to purchase stocks that are underweight relative to the target allocation, bringing the portfolio more in line to target.

• When you or your client requests one or more grant(s): when you or your client requests one or more grant(s) to charity, investments are liquidated automatically to fund the grant(s) and ensure target allocation is maintained. The priority is to sell stocks that are overweight relative to target, so that each grant brings the fund closer toward its target allocation. If liquidation is in progress for one grant and your client makes an additional grant request, the rebalance activity will be adjusted to avoid unnecessary buy/sell transactions.

• When are sent: when a client sends a portion of their balance via a virtual gift card, investments are liquidated automatically to fund the gift card amount and ensure target allocation is maintained. The priority is to sell stocks that are overweight relative to target.

Rebalancing for alignment with target allocation

If no activity has occurred over a period of 30 days on a client's account, there is still a chance that fluctuations in stock values have migrated your client's portfolio away from target. To accommodate this scenario, the account will automatically rebalance to bring it back in alignment with your desired allocations.