No.:
Date Approved:
LEVEL 1 FOUNDATION POLICY:
PMIEF Board authors, approves and
monitors Rev No.: 1 Rev Date: 8 July 2008
POLICY TITLE:
PMIEF Investment PolicyPage: 1 of 14
RESPONSIBILITY OF:
PMIEF Treasurer

PREPARED BY: PMIEF Board; PMIEF/PMI Staff
APPROVED BY: PMIEF Board of Directors I. POLICY STATEMENT: In order to comply with Rules of the PMIEF Board 10.4.1.2 Investment Policy, this policy
provides the direction to the COO on the guidelines and parameters by which PMIEF will
protect its assets. Rule of the PMIEF Board 10.4.1.2 states “Investments shall be
managed in accordance with the Investment Policy approved by the PMIEF Board of
Directors.”
Background: Because the PMIEF Board of Directors and COO have been entrusted by
donors with the financial management of their donations for use for the purposes
designated by the donors and because some of those donations are intended to be
invested for applications by PMIEF without utilizing the principal, it was imperative that
PMIEF have an investment policy to guide the management of its assets.
II. PURPOSE: As stated in the detailed policy document included below, the purpose of theinvestment policy is to
a. Provide a clear statement of the investment policies and objectives for PMIEF
b. Define clearly the responsibilities of the PMIEF Board, the PMIEF COO, staff andadvisors.c. Provide an adequate basis for evaluating the investment performance of PMIEF.
III. DESIRED RESULTS/OBJECTIVES: They are described in the policy document below.
IV. DEFINITIONS: Please refer to the policy document below for this information.
V. POLICY DISSEMINATION: Internal: PMIEF Board, PMIEF COO, PMIEF and PMI Executive Staff as needed, PMIEF
and PMI finance and accounting staff as needed, PMIEF independent financial auditor as
needed, investment advisors External: None, unless requested by a donor.

V. SUPPORTING DOCUMENTATION: The following investment policy document: 6/20/082PMI EDUCATIONAL FOUNDATION INVESTMENT POLICY The PMI Educational Foundation (PMIEF or the Foundation) is a 501(c)(3) nonprofit corporation
whose purpose is to promote economic, educational, cultural, and social advancement through the
application, development, and promotion of project management concepts, theories, and life
skills. In order to fulfill its purpose, PMIEF requires sound financial management, including
prudent investment and oversight of its operating and reserve funds.This Investment Policy (Policy) has been adopted by the PMIEF Board of Directors (the Board) to
provide guidelines for the investment of funds held by the Foundation.
The investment guidelines and restrictions presented in this Policy serve as a framework to achieve
the investment objectives at a level of risk that the Board of Directors deems acceptable. PURPOSE
This policy is adopted in order that:1)There is clear statement of the investment policies and objectives of PMIEF.
2)Clear responsibilities are defined.3)PMIEF has an appropriate basis for evaluation of the investment performance for
invested funds on a regular and ongoing basis. PROCEDURES
Roles and Responsibilities
All funds held by the Foundation shall be invested in a manner that complies with all applicable
Federal and District of Columbia requirements applicable to the Foundation as currently
constituted, specifically including, but not limited to, any laws or regulations pertaining to the
maintenance of the Foundation's federal tax exemption under Section 501(c)(3) of the Internal
Revenue Code.

Management of PMIEF funds will be vested in the Board, Finance Committee and Staff as specified
in the following levels of responsibility:
A.Unless the Board delegates its authority, the Board will:1)Establish and approve all Foundation policies for investments.
2)Review the investment objectives, investment performance and asset allocation at least
annually and initiate corrective actions if goals are not being achieved.6/20/0833) Have responsibility to recommend termination of investment consultant if they aredissatisfied with performance.
B.The Finance Committee will facilitate:1)The monitoring of Policy implementation to ensure that investment decisions fulfill the
objectives of this Policy.
2)The consideration of any proposed revisions to this Policy and recommend any
appropriate action to the Board as necessary and appropriate.3)The reviewing of quarterly reports from Staff in order to monitor fund and investment
manager performance and annually assess investment rationale, target and actual asset
allocations.4)The consideration, at least annually, of investment-related issues deemed necessary and
appropriate to PMIEF’s mission.5)The assurance of consistency of above actions with Foundation’s mission.
C.Staff
The COO or his/her designated staff is authorized to implement the policies as approved by the
Board. Staff is authorized to utilize the services of an investment consultant and investment
managers to carry out this Policy, as approved by the Board. TheStaff will:1)Engage an investment consultant and evaluate the consultant’s performance.2)Review on an annual basis the target asset allocation and target investment return
objectives of the funds.3)Approve the use of investment managers, mutual funds and other investment vehicles
authorized by this Policy. The investment manager is responsible for making the
investment decisions (security selection and price decisions). The performance of the
investment manager will be reviewed quarterly as noted above in B (3).4)Review the performance of the investments, including investment fees and expenses,
and make changes, if and when necessary.5)Review investment decisions to ensure that they comply with the guidelines of this
Policy.6)Review statements for PMIEF’s funds on a monthly basis.6/20/0847)Provide to the Finance Committee an investment status report at least quarterly. Staff’s
report will include the quarterly report(s) provided by the investment consultant and/or
any supplemental information Staff deems appropriate.8)Review this Policy at least annually and present any recommended changes to the
Finance Committee.
D.Investment Consultant
It is anticipated that PMIEF will retain the services of an investment consultant. The investment
consultant is an objective, third-party advisor to assist the Foundation in managing the overall
investment process. The advisor will be responsible for supporting Staff through a disciplined
investment process to enable the Foundation to meet the desired objectives as set forth in this
policy.The consultant may be called upon to provide any or all of the following services:

1)Recommend to Staff an asset allocation mix for the Funds.
2)Recommend to Staff specific investment managers or investment vehicles.
3)Ensure that Staff receives monthly statements.4)Prepare and distribute quarterly reports to the Staff analyzing investment performance of
the Fund.5)Review this Policy at least annually and present to the Staff any recommended changes
for presentation to the Finance Committee for their further action.6)Be available to confer with the Staff, Finance Committee and/or the Board as necessary.7)Be available to meet with the Board (or its designee) on an annual basis to review the
financial markets, portfolio structure, investment performance, this Policy, investment
strategies, and other subjects that may be of interest and benefit to PMIEF’s portfolios.
E. Investment Managers
It is anticipated that PMIEF will seek the services of investment managers to manage all or a portion
of the Fund. The investment manager is responsible for timely investment of both principal and
income, settlements of transactions, and providing liquidity as directed by Staff. The investment
manager shall exercise full investment discretion with regards to buying, managing, and selling
assets held in the Portfolios. Such managers shall be SEC registered investment advisors and/or
mutual fund managers (both herein referred to as "Investment Managers”). Any investment
manager hired and given discretionary authority over assets in any part of the Foundation's portfolio
will be subject to the guidelines in this Policy. 6/20/085 OPERATING FUND
Purpose

The purpose of the Operating Fund is to provide supplemental cash to meet the needs of
PMIEF’s general operations within the approved budget.
Investment Objectives

The investment objectives of the Operating Fund are:1)Liquidity2)Preservation of capital3)Maximization of income consistent with the above
Investment Goals 1)The Operating Fund’s total return, net of investment expenses, should meet
or exceed the U.S. 90-day Treasury Bill Index.INVESTMENT GUIDELINES
Maturity

The average maturity of all investments in the Operating Fund shall be limited to a maximum of 12
months.
Credit Quality

The average credit quality of the portfolio shall be “A” or higher.

Reporting

Staff will maintain monthly reports to include a schedule of investments, interest income for the
period and year-to-date, and current yield. These reports will be provided to the Finance
Committee upon request. Staff will also prepare quarterly reports for the Finance Committee’s
review of fund performance.
Income from Operating Fund
Income from the Operating Fund shall remain in the Operating Fund and be available to support
PMIEF operations during the course of the year.6/20/086PERMISSIBLE INVESTMENTS
Staff shall be authorized to invest the Operating Fund as follows:1)Federally insured Certificates of Deposit not to exceed federally insured amounts unless the
bank is rated at least “A” by Fitch Ratings2)Money market funds3)Checking accounts in federally insured banks and savings & loans not to exceed federally
insured amounts unless the bank is rated at least “A” by Fitch Ratings4)U.S. government and agency issues5)Commercial paper rated A2/P2 or higher6)Repurchase agreements (in conjunction with bank sweep accounts collateralized by U.S.
government obligations)6/20/087GENERAL FUND
Purpose

The PMIEF General Fund is an unrestricted fund with the purpose for providing a source of
funding for board-approved programs and the general operations of the Foundation.
Investment Objectives

The investment objectives of the Foundation are:1)Long-term growth of capital2)Preservation of purchasing power3)Preservation of capital
The objectives of the Fund should be pursued as a long-term goal designed to maximize the
returns without exposure to undue risk.
Recognizing that intermediate market fluctuations may cause variations in the Fund’s
performance, the expectations are to achieve the following objectives over a 3-5 year time
period. (For purposes of measuring performance, total return is defined as all dividends and
interest and both realized and unrealized gains and losses reduced by investment expenses and
fees.)
Investment Goals 1)The annual Target Investment Return for the Fund will be determined by the
Spending Policy as established by the Finance Committee. A spending
“rule” will be established to provide for the ongoing spending needs of the
Foundation while preserving the corpus of the fund.
2)The returns of each investment manager/vehicle will be evaluated against an
appropriate individual benchmark and peer group.INVESTMENT GUIDELINES
Risk Tolerance

The General Fund should be invested to minimize the likelihood of low negative total returns,
defined as a one-year return worse than -12%.
Diversification

No more than 5% (at market) of the General Fund may be invested in the securities of any one
issuer; no more than 20% (at market) of the General Fund may be invested in any one industry.
Exceptions to this requirement: securities issued by the U.S. Government, its agencies and
instrumentalities; federally insured certificates of deposit; mutual funds or exchange traded
funds.6/20/088
Maturity

The average weighted maturity of the fixed income portion of the General Fund will be 12 years or
less. The maximum maturity of any individual fixed income security will be 30 years or less.

Credit Quality

The average credit quality of the fixed income portion of the portfolio shall be “A” or higher.

Asset Allocation
The General Fund shall be invested in equities, fixed income securities, and cash and cash
equivalents. The proportion of the General Fund invested in each asset class should not be less or
more than the following percentages:
Asset Class Minimum Target Maximum Cash & Equivalents 0 5%15%Fixed Income 20% 30% 40%Equities 50% 60% 70%
Target Allocation

The investment consultant will present to Staff a recommended target asset allocation for the
General Fund. This target will be reviewed regularly, at least annually.
Rebalancing

In the event that the asset allocation of the General Fund is +/- 10% from the Target Allocation in
any asset class, the investments will be rebalanced to bring the allocation back inline with the target
allocation. The portfolio’s asset allocation will be monitored on a quarterly basis.

Reporting

The investment consultant will prepare a quarterly report to be distributed to the Finance Committee
containing a schedule of investments, the current asset allocation and investment performance
compared to the objectives of this Policy and to appropriate benchmarks and indices.6/20/089PERMISSIBLE INVESTMENTS
Cash & Equivalents
1)Federally insured Certificates of Deposit not to exceed federally insured amounts unless the
bank is rated at least “A” by Fitch Ratings2)Money market funds3)Checking accounts in federally insured banks and savings & loans not to exceed federally
insured amounts unless the bank is rated at least “A” by Fitch Ratings4)U.S. government and agency issues5)Commercial paper rated A2/P2 or higher6)Repurchase agreements (in conjunction with bank sweep accounts collateralized by U.S.
government obligations)
Fixed Income1)Senior, adjustable-rate U.S. bank notes.2)Foreign government or foreign corporate bonds (up to 20% of the market
value of the fund).3)High yield U.S. corporate bonds (up to 10% of the market value of the fund).4)Convertible U.S. corporate bonds (up to 10% of the market value of the
fund).5)Mutual funds or exchange traded funds investing in the above.
Equities1)Common stocks of U.S. corporations.
2)Common stocks of non-U.S. corporations (up to 25% of the market value of
fund)3)Preferred Stocks of U.S. corporations (up to 20% of the market value of the fund)4)Stocks of real estate investment trusts (REIT’s).5)Mutual funds or exchange traded funds investing in the above.6/20/0810ENDOWMENT FUND
Purpose

The PMIEF Endowment Fund is a restricted fund, with the purpose of providing a source of
funding for specific program activities of the Foundation, including scholarships, awards and
other board-approved programs.
Investment Objectives

The investment objectives of the Endowment Fund are:1)Preservation of capital2)Long-term growth of capital3)Preservation of purchasing power
The objectives of the Fund should be pursued as a long-term goal designed to maximize the
returns without exposure to undue risk.
Recognizing that intermediate market fluctuations may cause variations in the Fund’s
performance, the expectations are to achieve the following objectives over a 3-5 year time
period. (For purposes of measuring performance, total return is defined as all dividends and
interest and both realized and unrealized gains and losses reduced by investment expenses and
fees.)
Investment Goals 1)The annual Target Investment Return for the Fund will be determined by the
Spending Policy as established by the Finance Committee. A spending
“rule” will be established to provide for the ongoing spending needs of the
Foundation while preserving the corpus of the fund.2)The returns of each investment manager/vehicle will be evaluated against an
appropriate individual benchmark and peer group.INVESTMENT GUIDELINES
Risk Tolerance

The Endowment Fund should be invested to minimize the likelihood of low negative total
returns, defined as a one-year return worse than -10%.

Diversification

No more than 5% (at market) of the Endowment Fund may be invested in the securities of any
one issuer; no more than 20% (at market) of the Endowment Fund may be invested in any one
industry.6/20/0811Exceptions to this requirement: securities issued by the U.S. Government, its agencies and
instrumentalities; federally insured certificates of deposit; mutual funds or exchange traded
funds.

Maturity

The average weighted maturity of the fixed income portion of the Endowment Fund will be 12
years or less. The maximum maturity of any individual fixed income security will be 30 years or
less.

Credit Quality

The average credit quality of the fixed income portion of the portfolio shall be “A” or higher.

Asset Allocation
The Endowment Fund shall be invested in equities, fixed income securities, and cash and cash
equivalents. The proportion of the Endowment Fund invested in each asset class should not be less
or more than the following percentages:
Asset Class Minimum Target Maximum Cash & Equivalents 0 5%15%Fixed Income 35% 45% 55%Equities 40% 50% 60%
Target Allocation

The investment consultant will present to Staff a recommended target asset allocation for the
Endowment Fund. This target will be reviewed regularly, at least annually.
Rebalancing

In the event that the asset allocation of the Endowment Fund is +/- 10% from the Target Allocation
in any asset class, the investments will be rebalanced to bring the allocation back inline with the
target allocation. The portfolio’s asset allocation will be monitored on a quarterly basis.

Reporting

The investment consultant will prepare a quarterly report to be distributed to the Finance Committee
containing a schedule of investments, the current asset allocation and investment performance
compared to the objectives of this Policy and to appropriate benchmarks and indices.PERMISSIBLE INVESTMENTS
Cash & Equivalents
6/20/08121)Federally insured Certificates of Deposit not to exceed federally insured amounts unless the
bank is rated at least “A” by Fitch Ratings2)Money market funds3)Checking accounts in federally insured banks and savings & loans not to exceed federally
insured amounts unless the bank is rated at least “A” by Fitch Ratings4)U.S. government and agency issues5)Commercial paper rated A2/P2 or higher6)Repurchase agreements (in conjunction with bank sweep accounts collateralized by U.S.
government obligations)
Fixed Income1)Senior, adjustable-rate U.S. bank notes.2)Foreign government or foreign corporate bonds (up to 20% of the market
value of the fund).3)High yield U.S. corporate bonds (up to 10% of the market value of the fund).4)Convertible U.S. corporate bonds (up to 10% of the market value of the
fund).5)Mutual funds or exchange traded funds investing in the above.
Equities1)Common stocks of U.S. corporations.2)Common stocks of non-U.S. corporations (up to 25% of the market value of
fund)3)Preferred Stocks of U.S. corporations (up to 20% of the market value of the fund)4)Stocks of real estate investment trusts (REIT’s).5)Mutual funds or exchange traded funds investing in the above.6/20/0813SPENDING POLICY
The PMI Educational Foundation recognizes that the establishment and consistent application of
a spending policy is essential to the long-term success of the Foundation and the performance of
its Operating, General & Endowment Funds (the Funds).
This spending policy is intended to establish reasonable and prudent spending from the Funds on an
annual basis to support the Foundation’s programs and general operations.
The Finance Committee will establish an annual Spending Rule, which will define the annual pay
out percentage for the Funds. Once the Spending Rule has been approved, Staff shall have
discretion as to the timing and method of withdrawal of the funds. The Spending Rule will be
calculated as a percentage of the average total market value of the Fund for the trailing three years
as of the end of the most recent calendar year. The Spending Rule will take into account projections
for:Total return on the Funds (including dividends, interest income,
realized and unrealized gains and losses, and investment expenses)Anticipated cash flows into or out of the Fund based on budgeted
forecastsEstimated rate of inflation
The Spending Rule, anticipated inflation, and investment expenses will determine the annual
Target Investment Return for each of the Funds. The PMIEF recognizes that from time to time
annual investment returns may fall short of the target investment return in effect. PMIEF also
recognizes that the Fund is invested in longer term securities and that PMIEF will measure
performance based on real rates of return over market cycle (3-5 year) time periods.
The Spending Rule for the Funds for the initial period (calendar year 2007) will be 5% of the
average market value of the Fund over the trailing three years. The current trailing three-year
average market value shall be deemed to be $17,500.
The initial calculation of the Target Investment Return is as follows: InitialSpendingRule5.0%Rate of inflation (estimated) 2.5%Investment expenses and fees (estimated) 0.8%TargetInvestmentReturn8.3%

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