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FIRST CONGREGATIONAL CHURCH FOUNDATION

STATEMENT OF INVESTMENT POLICY

The purpose of this policy is to establish guidelines for the investment and management of funds held in The Endowment Fund and The Capital Improvements Fund of the First Congregational Church Foundation. The goals and objectives of the respective funds are stated. Investment guidelines applicable to both funds follow. These goals, objectives and guidelines shall be reviewed at least annually by The Foundation Board.

ENDOWMENT FUND

The Endowment Fund is a perpetual fund with the income being used for the operation of the Church or as otherwise directed by the congregation. The corpus may be used to fund emergency needs of the Church, as approved by the Congregation.

Investment Goal

The investment goal of the Endowment Fund is to provide sufficient growth in market value to neutralize the affect of inflation over time, while supplementing the Church's annual income.

Investment Objectives

1. To maximize total return (definition - the sum of growth/appreciation and income) by selecting those investments which provide the best rate of return consistent with the guidelines described below.
2. To provide growth in the assets of the fund.

CAPITAL IMPROVEMENTS FUND

The income from the Capital Improvements Fund may be used to fund major improvements to the Church's physical plant or otherwise as the Congregation directs. The corpus may be used to fund any needs of the Church as budgeted or for special needs, as approved by the Congregation on an annual basis.

Investment Goal

The investment goal of the Capital Improvements Fund is to maximize income while preserving principal.

Investment Objectives

1. To maintain adequate liquidity (definition - salable within 5 business days) to meet reasonably foreseeable needs.
2. To maintain at least 70% of the fund in fixed income securities.

INVESTMENT GUIDELINES

The following Investment Guidelines are broad in nature and are applicable to either the Endowment Fund or the Capital Improvements Fund. They are designed to establish quality, maturity and distribution standards for the Church's investments.

Fixed Income Securities

Fixed income securities will be used to minimize risk and provide a consistent flow of income.

1. The quality rating should be a minimum of Moody's and/or Standard and Poor's "A" or the equivalent. Certificates of Deposit shall be federally insured. The amount held in any one institution should not exceed the limit of deposit insurance provided for each depositor.
2. Maximum weighted-average maturity of the fixed income portfolio will not exceed 8 years.
3. Individual issue limitations for fixed income securities shall be:
   1. No restriction on percentage of book value of bond portfolio invested in obligations of the U.S. Government and securities guaranteed with respect to principal and interest by the U.S. Government and U.S. Government Agency issues.
   2. Maximum of 10% of book value of fixed income portfolio may be invested in the securities of any one issuer.
   3. Maximum purchase of 10% of any one issue, except securities issued by the U.S. Government and securities guaranteed with respect to payment of principal and interest by the U.S. Government.

Equity Securities

Equity issues, common stocks and convertible securities may be included in the portfolio primarily to provide potential longer-term capital growth and appreciation with current income as secondary.

1. Only securities found on the New York Stock Exchange, the American Stock Exchange or NASDAQ may be bought. The quality rating of stocks shall be the equivalent of "B" or better as rated by Value Line or equivalent. No more than 10% of the equity portfolio shall be in "B" rated issues.
   The following factors should be considered:
   • Quality of company management
   • Balance sheet of company
   • Expected high and consistent return on equity Favorable trends of earnings and/or dividend growth
2. No more than 10% of the total equity portfolio of any fund shall be invested in any one issuer's securities. If the rising value of an issue causes the security to exceed the 10% limitation, it will not be necessary to sell except that approval of the Foundation Board shall be required to retain appreciated market value of am equity commitment in excess of 20% of the total equity portfolio.

Mutual Funds

Mutual Funds may be included to further the investment objectives stated above.

1. Investment in mutual funds should follow all the guidelines stated for equity issues.
2. A maximum of 15% of mutual funds may be invested in global funds traded on domestic markets.

Other Considerations

1. All investments shall be in taxable securities.
2. Investment of assets shall be made solely in the interest of The First Congregational Church Foundation.
3. No securities shall be purchased which are subject to restrictions on resale.
4. No purchase shall be made on margin or with borrowed funds
5. The use of options, futures, derivatives and commodities shall be expressly prohibited with respect to Foundation assets. No securities shall be loaned
6. Non-cash gifts can be liquidated or retained at the discretion of The Foundation Board.
7. The composition and performance of the Funds will be reviewed quarterly by The Foundation Board and reported to the Trustees.
8. The Foundation Board shall report at least annually to the Congregation.

The Investment Manager

The investment manager shall submit monthly reports on the status of all investments and review investment performance with the Foundation Board at least semi-annually.