Investment Policy: Rules Governing the Use and Investment of Betterment Funds

Policy Approve By
Dr. Dean O. Stenehjem, Superintendent
Policy Date (original policy date)
Policy Prepared By
Mary Sarate, Director of Business and Finance and Dean Stenehjem, Superintendent with review by WSSB Board of Trustees
Policy Category


WSSB Betterment Funds were established to assist in meeting unmet needs of blind and visually impaired (BVI) students in regards to personal care, educational, social/emotional, recreational and other needs as deemed appropriate as presented by school administration with review and advice by the Board of Trustees. Betterment Funds were also established to help facilitate a financial tracking system for student generated fundraising activities, clubs, etc.

Betterment Funds are non-restricted unless donors designate a purpose for their gift(s), designated accounts are established for fundraising and tracking of budgeted accounts tied to various activities.

Betterment Funds were not established to supplant state obligations, however, in the case of an emergency situation Betterment Funds could be used to maintain necessary services until state funds can be secured.

Superintendent’s Responsibilities:  The superintendent is responsible for the management, investment and monitoring of these funds. Annually, the Director of Business and Finance will produce a report on spending, investments and account status. This will be presented to the Board of Trustees. WSSB’s Board of Trustees is an advisory board and does not have policy setting authority, but does provide an important role in providing direction to the superintendent and school. On a yearly basis the superintendent will provide information (either in person or written) to the Board of Trustees on the status of investment strategies being utilized for Invested Betterment Funds that have been established through gifts and donations to the WSSB.


Under the provisions of (RCW 72.40.22) the superintendent of the WSSB has the ability to raise and invest funds for the Betterment of BVI students.

Superintendent of the state school for the blind — Powers and duties.  (RCW 72.40.22)

(11) May receive gifts, grants, conveyances, devises, and bequests of real or personal property from whatever source, as may be made from time to time, in trust or otherwise, whenever the terms and conditions will aid in carrying out the programs of the school; sell, lease or exchange, invest, or expend the same or the proceeds, rents, profits, and income thereof except as limited by the terms and conditions thereof; and adopt rules to govern the receipt and expenditure of the proceeds, rents, profits, and income thereof.

Statement of Investment Objectives:

The primary objectives will be to achieve as high a level of Fund growth and income distribution as is possible without assuming excessive risk. Further, it is WSSB’s intent to diversify the Fund as much as possible.  Adequate diversification will control risk by insuring that normal market fluctuations will not seriously impact the Fund's overall value.

Asset Allocation:

The Fund should have an asset allocation strategy that will protect the Fund against inflation and promote growth.  The following guidelines are established to achieve this objective:

Asset Class Minimum Target Maximum
Growth Funds (aggressive) 0% 5% 7%
Growth 8% 13% 15%
Growth and Income 8% 15% 25%
International Equity 8% 15% 25%
Fixed Income [bonds/money market/ etc.] 30% 52% 60%
Aggressive Income [sub set of above] 0% 10% 15%
Totals: 100%    

It is recognized that economic and market conditions may cause the asset allocations to fluctuate within the allowable ranges.  The above percentages will be based on the market value of the Fund's assets.

Review Procedures:

The Board of Trustees shall review this Investment Policy annually to determine if modifications are necessary or desirable. Discussion regarding changes will occur with the superintendent and adjustments to the policy to safeguard funds to whatever level possible as markets changes and fluctuate.

Strategic Asset Class Rebalancing:

Market price changes will eventually move asset classes away from their target weights as listed above. These changes will require rebalancing the portfolios periodically to stay reasonably close to the approved targets. This process is normal and desirable, since the assets that have increased in value the most will be sold, and the lower priced assets will be bought. This is a form of dollar cost averaging, which results over time in a lower average cost for the portfolio as a whole. Because rebalancing incurs transactions costs and may be expensive, the goal is to rebalance only when necessary (weights outside the established ranges) and to rebalance only as much as necessary.

Guidelines for the rebalancing process are as follows:

The superintendent will review the actual allocations at least quarterly to determine if the asset allocations are consistent with the ranges established above. If the allocation for any asset class exceeds the established range at the end of a quarter, the superintendent may elect one of the following methods to rebalance:

  • to the closest edge of the range;
  • to a point between the closest edge of the range and the target (normally about halfway);
  • to the target weight.

- The superintendent may elect to rebalance more frequently than quarterly if rapidly changing market conditions occur. This will be discussed with investment counselors and the board kept informed of changes.

- If available, the superintendent will employ normal cash flows to assist in the rebalancing effort.  Withdrawals will normally come out of the over-weighted asset classes, and contributions will normally go into the under-weighted asset classes.  A significant withdrawal or contribution could cause a rebalancing all the way to the target weights.

- On occasion, WSSB may withdraw funds to cover the cost of needed expenses which are not covered by state appropriations. This withdrawal will be noted and explained to the board during quarterly meeting.