Nursing Home Five Star Analysis

Transcription

1 5 Star Analysis - Nursing Home Page 1 of 5 9/19/2016 Nursing Home Five Star Analysis Martha And Mary Health Service, Poulsbo, WA Extract Date: July 1, 2016 Overall 5 Star Rating: Previous Month: 3 Months Prior: Help (/r/n5-help/) Follow the sections below to see how your current rating is calculated and 2 scenarios that could possibly change your overall 5 star rating. Health Inspection 5 Star Rating: Previous Month: 3 Months Prior: Help (/r/n5-help/health-inspection/) The health inspection rating is based on number, scope and severity of deficiencies identified during the three most recent annual inspection surveys and from the most recent 36 months of complaint investigations. More than one revisit will have a negative impact on the score for a survey cycle. The total score from each survey cycle is weighted so that the more recent survey cycles have more impact on the overall total score as compared to the older survey cycles. Inspection Cycle Health Survey Date Count of Health Deficiencies Standard Immediate Jeopardy Severe Substandard QOC Administration Environmental Mistreatment Nutrition and Dietary Pharmacy Service Quality of Care Resident Assessment Resident Rights Number of Standard Health Deficiencies Scope and Severity of most Severe Standard Health Deficiency E G G Complaints Number of Complaint Health Deficiencies Scope and Severity of most Severe Complaint Health Deficiency D NONE D Total Number of Health Deficiencies Health Deficiency Score Number of Health Revisits Health Revisit Score Total Health Score Survey Weighting 1/2 1/3 1/6 Weighted Total Health Score Total Weighted Health Survey Score 69 View Cut Points (/r/n5-help/health-inspection/health-inspection-cut-points/) Use Quality Metrics ( MyLeadingAge username and password). to compare your adjusted deficiencies to your peers (login required using your

2 5 Star Analysis - Nursing Home Page 2 of 5 Staffing 5 Star Rating: Previous Month: 3 Months Prior: Help (/r/n5-help/staffing/) The number in the box where the blue (i.e. adjusted RN hours) and red (i.e. adjusted total nurse staff hours) lines intersect represents the numbers of stars this facility receives for staffing. The columns going from left to right represents the number of stars for total nurse staff hours. The rows going from top to bottom represent the number of stars for RN hours. Staffing matrix explanation <-- Lower Total nurse staff hours (RN, LPN, & CNA) Higher --> Current Gain Lose Remain RN Hours Total Nurse Staff Hours Interpretation This facility currently has a 5 star staffing rating of 5. The adjusted total nurse staff hours is close to a cut point. Due to being close to a cut point, there is potential to lose 1 star for the staffing rating. To see how a change in your resident mix or reported hours could change your staffing rating, use the Staffing Scenario Worksheet (?traction=r:n5.s&u=0e75fdc7-df1a b2e-a0256afec7e9&w=s). Use Quality Metrics ( to compare your adjusted staff hours to your peers (login required using your MyLeadingAge username and password). View Cut Points (/r/n5-help/staffing/staffing-cut-points/) 9/19/2016

3 5 Star Analysis - Nursing Home Page 3 of 5 Quality Measure 5 Star Rating: Previous Month: only updated quarterly 3 Months Prior: Help (/r/n5-help/quality-measures/) Quality Measure Rate Points Better Worse Interpretation Bottom Cut Point Top Cut Point Higher Rate is Better Successful community discharge (short-stay) Potential To Gain Points Increasing this QM rate by 0.4% or by approximately percentage points could result in gaining 10 points Functional Improvement (shortstay) Decreasing this QM rate by 4.4% or by approximately percentage points could result in losing 10 points Lower Rate is Better Moderate to Severe Pain (long-stay) Potential To Gain Points Decreasing this QM rate by 4.2% or by approximately percentage points could result in gaining 20 points ED Visits (short-stay) Potential To Gain Points Decreasing this QM rate by 3.3% or by approximately percentage points could result in gaining 10 points Physical Restraints (long-stay) Decreasing this QM rate by 100% or by approximately percentage points could result in gaining 40 points Antipsychotic Medications (shortstay) Decreasing this QM rate by 16% or by approximately percentage points could result in gaining 20 points Urinary Tract Infection (long-stay) Decreasing this QM rate by 14% or by approximately percentage points could result in gaining 20 points Injurious Falls (longstay) Decreasing this QM rate by 16.7% or by approximately percentage points could result in gaining 20 points High Risk Pressure Ulcers (long-stay) Increasing this QM rate by 21.8% or by approximately percentage points could result in losing 20 points ADL Decline (longstay) Increasing this QM rate by 7.5% or by approximately percentage points could result in losing 20 points New or Worsening Pressure Ulcers (short-stay) Increasing this QM rate by 24.2% or by approximately percentage points could result in losing 25 points Catheter (long-stay) Full points are currently being attained for this QM, but increasing this rate by 47% or by approximately percentage points could result in losing 20 points Note: The QM rates and points in this table have been rounded to either one, two, or three decimal places due to space constraints. However, the full QM value has been used to calculate facility scores and rankings. To view the full QM cut point tables, click here (/r/n5-help/quality-measures/quality-measure-cut-points/). 9/19/2016

4 5 Star Analysis - Nursing Home Page 4 of 5 Quality Measure Rate Points Better Worse Interpretation Bottom Cut Point Top Cut Point Mobility Decline (long-stay) Increasing this QM rate by 9% or by approximately percentage points could result in losing 10 points Antipsychotic Medications (longstay) Increasing this QM rate by 5.3% or by approximately percentage points could result in losing 20 points Moderate to Severe Pain (short-stay) Potential To Lose Points Increasing this QM rate by 1.4% or by approximately percentage points could result in losing 20 points Hospital readmission (short-stay) Potential To Lose Points Full points are currently being attained for this QM, but increasing this rate by 1.6% or by approximately 0.22 percentage points could result in losing 10 points Note: The QM rates and points in this table have been rounded to either one, two, or three decimal places due to space constraints. However, the full QM value has been used to calculate facility scores and rankings. To view the full QM cut point tables, click here (/r/n5-help/quality-measures/quality-measure-cut-points/). 9/19/2016

5 5 Star Analysis - Nursing Home Page 5 of 5 9/19/2016 Total Points Current Months Prior: 545 Gain 800 Lose 730 Gain and lose Current Gain points Lose points Gain and lose points Use Quality Metrics ( using your MyLeadingAge username and password). to compare your QMs to your peers or to see how your QMs are trending (login required View Cut Points (/r/n5-help/quality-measures/quality-measure-cut-points/) Overall 5 Star Rating: Previous Month: 3 Months Prior: Help (/r/n5-help/) Follow the steps below to see how your current rating is calculated and 2 scenarios could possibly change your overall 5 star rating. Step Instruction Current Likely to Gain Likely to Lose 1 Start with the health inspection five-star rating Add one star to the Step 1 result if staffing rating is four or five stars and greater than the health inspection rating; subtract one star if staffing is one star. The overall rating cannot be more than five stars or less than one star. 3 Add one star to the Step 2 result if quality measure rating is five stars; subtract one star if quality measure rating is one star. The overall rating cannot be more than five stars or less than one star. 4 If the health inspection rating is one star, then the overall quality rating cannot be upgraded by more than one star based on the staffing and quality measure ratings. 5 If the nursing home is a Special Focus Facility (SFF) that has not graduated, the maximum overall quality rating is three stars. This facilty is not a special focus facility NA NA NA Final Overall Star Rating Use Quality Metrics ( username and password). to compare your 5 Star Ratings to your peers (login required using your MyLeadingAge LeadingAge New York 2016; All Rights Reserved.

6 Page 1 of 9 Policy 2: Board Self-Management Policies For purposes of these policies Martha & Mary and Board shall mean all of the Martha & Mary Corporations: Martha & Mary Lutheran Services (MMLS), Martha & Mary Health Services (MMHS), Martha & Mary Children s Services (MMCS), Ebenezer, and Martha & Mary Home and Community Services (MMHCS) unless otherwise stated. 2.0 Purpose - The purpose of the Board, on behalf of the Lutheran churches who are its Members and moral owners, and whose values it represents, is to: Determine the organization's mission and purpose (MMLS only) Select the Chief Executive Officer (CEO) (MMLS only) Support the Chief Executive Officer and review his or her performance (MMLS only) Ensure effective organizational planning Ensure adequate resources. Protect assets and provide financial oversight Determine and monitor the organization's programs and services Enhance the organization's public image Build a competent board and assess its own performance Ensure legal and ethical integrity 2.1. Governing Principles - The Board will govern with an emphasis on (1) outward vision rather than internal preoccupation, (2) encouragement of diversity in viewpoints, (3) strategic leadership more than administrative detail, (4) clear distinction of Board and CEO roles, (5) collective rather than individual decisions, (6) future rather than past or present, and (7) proactivity rather than reactivity Scope of Activities - All activities of the Board, its officers, committee(s) or members shall relate to the specific responsibilities of the Board as formally documented in policies Group Action - The Board, after deliberation, will speak with one voice. No individual Trustee may exercise such authority except as instructed by the Board Discipline The Board will enforce upon itself discipline necessary to govern with excellence and consistent with the Bylaws. Discipline will apply to: Attendance Absence from three consecutive or four regularly called board meetings in a rolling 12-month period shall result in a review of status as a trustee. (Revised June 2015) Adherence to governing principles Policy Review Any Trustee or the CEO may request that the President place on the Board s agenda a review of or a change of specific policies at any time. (Revised May 2011) Monitoring - The Board shall establish effective and regular ways of monitoring compliance with its Policies Board Meeting Evaluation At each meeting the board will monitor and discuss the board s own process and performance and will ensure the continuity of board values and Martha & Mary Board Policies Policy 2: Board Self-Management Rev: May 11; Feb 13; Aug 14; June 15; May 16

7 Page 2 of 9 improvements through board training and orientation. The Governance Committee is responsible for implementing this policy. (Revised May 2011) 2.2. Board Responsibilities The Board will carry out its Purpose by: Strengthening the link between the organization and its Members through communication with the delegates and pastors of the member churches Enhancing the organization s public image Developing written governing policies which, at the broadest level, address: Mission and purpose for M&M (MMLS only) Board Self-Management Policies: Specification of how the Board conceives, carries out, and monitors its own task Board-CEO Relationship: How power is delegated and its proper use monitored; the CEO s role, the Board s authority and accountability. (Revised August 2014) Board direction to the CEO: Constraints on CEO authority which establish the prudent and ethical boundaries within which all CEO activity and decisions must take place Evaluating the CEO s performance for the period of January 1 through December 31 each year Individual Trustee Responsibilities To successfully perform his/her responsibility, each individual member shall: Complete new trustee orientation and devote the time to stay informed of issues Become familiar with Martha & Mary s Bylaws and Policies Regularly attend and actively participate in all of the board s meetings. Notify the board president if an absence is anticipated Review materials provided in advance of board meetings and come prepared to participate in meetings When absent from a meeting, review minutes and results of the missed meeting Serve on board committees and task forces as requested Not speak for the board as a whole, unless specifically authorized Follow through on board-related commitments Respect the confidentiality appropriate to issues: In the normal course of business, a Trustee shall treat as confidential all matters involving M&M, including Board discussions, until there has been general disclosure or unless the information is a matter of public record or common knowledge The individual Trustee is not a spokesperson for M&M and thus disclosure to the public of M&M and Board activities shall be made only through M&M's designated spokesperson, the CEO or the President of the Board. Martha & Mary Board Policies Policy 2: Board Self-Management Rev: May 11; Feb 13; Aug 14; June 15; May 16

8 Page 3 of This presumption of confidential treatment shall apply to all information about legitimate Board or M&M activities. To this end, any communication, including , concerning Board matters or meetings or committee meetings and discussions shall only be communicated by Trustees to other Trustees and to appropriate management staff. (Revised May 2011) This also includes the dissemination of confidential information, records and documents regarding M&M itself, staff, patients, prospective patients and, more generally all information regarding M&M matters, transactions, personnel and individual performance of employees, management or other Trustees Refer any employee concerns or complaints to the CEO, unless the issue is a matter which should be referred to the ethics hot line Trustees shall at all times conduct themselves in a civil manner when conducting M&M business, when acting on behalf of M&M and when on M&M premises, whether in the role of a visitor, volunteer or Trustee. At no time will abusive, discourteous, threatening or demeaning language or action be tolerated Make an annual financial contribution to the organization Support and participate in fundraising activities and events Trustee s Conflict of Interest Policy All Trustees shall comply with the Boardapproved Conflict of Interest Policy Governing Processes Annual Board Planning Cycle - The board shall establish an annual calendar for corporation meetings, trustee orientation, training/education and re-examination of its mission, purpose and strategic plan Policy Review Calendar - Policies shall be reviewed at least once a year according to the following schedule: (Revised May 2011 and August 2014)) Policy 1 (Mission & Purpose) in October along with the annual review of the strategic plan Policy 2 (Board Self-Management) in June. (Added May 2011; Revised August 2014) Policy 3 (Board-CEO Relationship) and Policy 4 (Board Direction to CEO) in March along with annual CEO evaluation. (Added May 2011) Board Self-Appraisal - In order to discipline itself and its efforts, the Board shall conduct an annual self-appraisal. The Board shall commit part of one meeting to discuss the following areas and identify areas and actions for improvement. The self-appraisal shall focus on: The Board s performance in identifying and achieving its mission and purpose The Board's openness and communication among its trustees The Board's ability and skill in developing and monitoring policy The Board's adherence to policy The Board's communication with the CEO. Martha & Mary Board Policies Policy 2: Board Self-Management Rev: May 11; Feb 13; Aug 14; June 15; May 16

9 Page 4 of Investment in Governance The Board will invest in its governance capacity. Accordingly, the Board will: Ensure that individual and collective skills, methods, and supports are sufficient to assure governing with excellence Use training and retraining to orient new members and candidates for membership, as well as to maintain and increase existing member skills and understanding Arrange for outside assistance when needed so that the board can exercise confident control over organizational performance The board will appoint the external auditor annually upon the recommendation of the Audit Committee. The auditor will have a direct reporting responsibility to the board and will meet with the board in executive session without management present Develop outreach mechanisms as needed to ensure the board s ability to listen to viewpoints and values of its moral owners Budget costs for this investment and provide them to the CEO annually prior to setting the annual budget Board Meetings The Board intentionally establishes a basic structure for its meetings. Additional items can be added as needed, but the basic elements need to be maintained. This Board agenda structure shall work in tandem with the annual plan, policy review and monitoring calendar. The Board agenda structure shall include: Consent Agenda Items Management Report Committee and Task Force Reports Discussion and Education topics Meeting evaluation Consent Agenda items which require Board approval and which have been sent to Trustees prior to the meeting for review shall be placed on the consent agenda. Any trustee at the meeting may request an item be removed from the consent agenda to be discussed and voted on as an individual item. All consent agenda items will be approved by a single motion and vote to approve the consent agenda items Types of Board Sessions - The Board shall have three types of Board sessions: Open - Open sessions allow Trustees, Advisory Board Strategic Appointments, the CEO, and non-trustees to be in attendance. (Revised June 2015) Closed - Closed sessions allow only Trustees, Advisory Board Strategic Appointments, the CEO, and those invited to be in attendance. Except for actions taken, there shall be no reporting about these sessions. (Revised June 2015) Executive - Executive sessions allow only Trustees, Advisory Board Strategic Appointments, and those invited to be in attendance. Except for actions taken, there shall be no reporting about these sessions. (Revised June 2015) Martha & Mary Board Policies Policy 2: Board Self-Management Rev: May 11; Feb 13; Aug 14; June 15; May 16

10 Page 5 of Officers of the Board The officers of the Board shall not assume any part of the management of the organization. Their focus shall be on coordinating and helping the Board do its work Board President Responsibilities: Establish the agenda for Board meetings in coordination with the CEO and in compliance with the policy calendar established by the Board. (Revised May 2011) Preside at all meetings of the Board of Trustees and at the Annual Meeting. Roberts Rules of Order shall serve as a guide in the conduct of the meeting Discuss and review corrective actions with individual Trustees when they violate their responsibilities. When resolution cannot be obtained with an individual Trustee, the President, shall in an Executive session of the Board, conduct a review of the policy and develop recommendations for any necessary corrective actions Notify Trustees when they have missed two consecutive meetings or three meetings in a rolling 12-month period. The President shall explain that missing the next meeting will result in a review of their status as a trustee. (Revised June 2015) Act in all areas of Board management left unstated within these policies. The President is permitted to act in any of these areas without having first to gain Board approval Appoint committee chairs and members Establish board task forces and appoint members Occasionally represent the board to outside parties in announcing board-stated positions Be the point of contact for any trustee or employee who wishes to express a concern about illegal or unethical behavior that cannot be resolved through the normal chain-of-command in the organization Vice President: Fulfill President s duties when the President is absent or incapacitated Preside in the absence of the President at meetings of the Board of Trustees Secretary: Cause proper notice of meetings to be given Ensure the recording of accurate minutes of the meetings of the Board of Trustees and meetings of the Delegates Have custody of and authenticate as necessary the minute books and other records pertaining to the corporate business Oversee an electronic database for board documents and authorize access to the database for Trustees. Martha & Mary Board Policies Policy 2: Board Self-Management Rev: May 11; Feb 13; Aug 14; June 15; May 16

11 Page 6 of Task Forces Task forces may be established by the President to study specific issues and report recommendations to the board. Task forces shall exist for a specified period of time and disband when a report or recommendation has been given. Task forces shall have no executive or decision-making authority except when empowered by the Board Task forces may be established at the request of the CEO to tap trustees expertise in helping to study and formulate recommendations to the board Non-Trustees may be selected to be task force members. (Revised May 2011) A record (minutes, notes or highlights) of all meetings shall be kept and reported to the Board at its next regular meeting Committee Principles (Added February 2013) Committees will be used so as to minimally interfere with the wholeness of the board s job, and so as never to interfere with delegation from board to the CEO. Accordingly, board committees: May not speak or act for the board except when formally given such authority for specific and time-limited purposes. Such authority will be carefully stated in order not to conflict with authority delegated to the CEO Will assist the board chiefly by preparing policy alternatives and implications for board deliberation. Board committees are not to be created by the board to advise staff Cannot exercise authority over staff Committee Structure (Added February 2013) The Board Governance Committee shall: Consist of at least three trustees Conduct annual and as necessary policy reviews, soliciting input from all board members. Recommend changes as necessary Regularly evaluate the effectiveness of the parent and subsidiary boards Assess the skills which are needed by the board to effectively carry out the Mission and Vision for M&M Provide such orientation, training and educational materials as may be needed to enable trustees to be effective Serve as nominating committee to identify persons who are willing to serve as trustees for MMLS and its subsidiaries Nominate officers for MMLS and all subsidiaries for election at the annual board meetings Develop and promote strategies for strengthening the link between Martha & Mary and its member churches The Finance Committee shall: Consist of at least four trustees; Martha & Mary Board Policies Policy 2: Board Self-Management Rev: May 11; Feb 13; Aug 14; June 15; May 16

12 Page 7 of Regularly review the financial status of all corporations and provide a summary to the boards at every meeting; Review the annual budget and basis for estimates to assure the budget aligns with the mission and purpose of the organization and are realistic and achievable. The committee shall recommend appropriate action to the boards; Propose board direction to the CEO Policy for changes relating to the fiscal management of Martha & Mary Recommend the board s budget for Investment in Governance (Ref. Policy 2; 2.5) Recommend annually for the approval by the board the appointment of the external auditor Regularly review enterprise risk management assessments and report to the board significant risks and corrective action plans Annually review and recommend changes as necessary to the Lutheran Services INVESTMENT POLICY, the Children s Services INVESTMENT POLICY, the Ebenezer INVESTMENT POLICY, and the Health Services INVESTMENT POLICY and report on the same to the Board. (Added August 2014) The Personnel Committee shall: Consist of the President and at least two other trustees; By March of each calendar year, solicit inputs from all trustees and prepare an appraisal for the CEO s performance in the previous fiscal year; Review appropriate compensation surveys such as LeadingAge Washington and recommend the CEO compensation package to the board; The Development Committee: Through philanthropy and fund development, assists the Board in its due diligence function of assuring the fiscal health of Martha & Mary. The Committee partners with staff to promote a philanthropic culture within the board and its individual members and to assure an effective donor-centered organization Consists of the Chair and at least two other members. The Committee Chair shall be a member of the Board of Trustees. Members may be members of the Board of Trustees and/or such with an interest in the organization s philanthropic programs Collaborate with the CEO and Development Staff to: Confer with the Governance Committee to define appropriate Board roles and performance expectations in Martha & Mary s development program. Provide personal follow-up to individual Board members to support their participation. Make personal donations, and encourage fellow Board members to do likewise. Demonstrate willingness to: o Make Martha & Mary a personal charitable priority; o Proactively develop relationships with potential sources of financial support; Martha & Mary Board Policies Policy 2: Board Self-Management Rev: May 11; Feb 13; Aug 14; June 15; May 16

13 Page 8 of 9 o Provide opportunities for donor prospects to contribute to Martha & Mary in a manner that will accomplish the donor s personal objectives and aspirations Provide comments to CEO and Development Staff during the Development planning process and the establishment of the charitable contributions goals for the annual budget; provide feedback to the Board regarding the organization s annual development plan; and, recommend results and benchmarks for consideration by the Board; o With consent of the Board, establish task forces and committees to carry out specific development activities, Monitor tasks force and committee performance Educate the Board about basic principles and best practices in Development, including the design of a donor-centered organization. o o Help the Board articulate the case for philanthropic support directed at specific audiences and to the community in general Engage the Board in strategic dialogue and decision-making regarding philanthropy and development Devise and recommend philanthropic and development policies to the Board for action, including any limitation policies Help nurture a culture of philanthropy throughout Martha & Mary and assure that all donors of time and money are respected, honored, and appropriately acknowledged Monitor fundraising efforts to be sure the ethical practices are in place and that fundraising efforts are cost-effective Annually evaluate its work as a Committee and the objectives it has committed itself to and report on the same to the Board of Trustees Annual review and recommend changes as necessary to the Martha & Mary Lutheran Services GIFT ACCEPTANCE POLICIES AND GUIDELINES and report on the same to the Board. (Added August 2014) Board Strategic Planning Committee (SPC) is to develop and clarify the organization s long-term vision of the future of Martha & Mary and oversee documentation of that vision into a rolling five-year Strategic Plan prepared annually for the adoption by the Board. It shall: Consist of at least three trustees appointed by the Board Chair. SPC may also have other, non-trustees, as additional members, appointed by the SPC Chair. Appointed Board members shall be the only Committee voting members Conduct, in conjunction with management, an Annual Strategic Planning Retreat. a. In conjunction with the CEO and Board Chair, coordinate the date, format, and agenda to be covered at the Annual Strategic Planning Retreat. Martha & Mary Board Policies Policy 2: Board Self-Management Rev: May 11; Feb 13; Aug 14; June 15; May 16

14 Page 9 of 9 b. Coordinate with the CEO and Board Chair, to finalize for inclusion in the Strategic Plan, performance, milestones, and benchmarks, or otherwise resolve items incomplete at the conclusion of the Annual Strategic Planning Retreat In conjunction with the CEO and Board Chair, SPC will identify a specific but limited number of topics to intently study as a committee on an annual basis that are agreed to be likely priorities for organization beyond the current year In conjunction with the CEO and Board Chair, SPC shall identify strategic topics and potential questions that may need research in preparation for the Annual Strategic Planning Retreat. Example topics may include identifying a suitable breath of services to be provided by M&M, or reviewing appropriate strategic alliances, partnerships or mergers SPC shall coordinate with the Finance and Audit Committee to ensure that current strategic initiatives are supported in the annual budget SPC shall review the Strategic Plan progress at least semi-annually. In coordination with the CEO and Board Chair, shall identify strategic topics and prioritize for presentation at board meetings. Martha & Mary Board Policies Policy 2: Board Self-Management Rev: May 11; Feb 13; Aug 14; June 15; May 16

15 Martha & Mary Lutheran Services Investment Policy (Approval Date 10/30/2014) INTRODUCTION This Investment Policy Statement (IPS) defines the investment policy, guidelines and performance objectives applicable to the investment assets of Martha & Mary Lutheran Services in accordance with the standards of care and prudence outlined in the Washington State Uniform Prudent Management of Institutional Funds Act (UPMIFA). The purpose of this document is threefold. First, it will constitute the plan for investing assets, collectively referred to herein as the Funds. Second, it will serve as a communications tool between the Finance Committee (the Committee ) and the Investment Advisors. Third, these guidelines will provide a framework to measure the ongoing progress of the investment(s). Philosophy: Martha & Mary Lutheran Services have a moderate to long term investment horizon, and allocate its assets accordingly. It is recognized that a strategic long-run asset allocation plan implemented in a consistent and disciplined manner will be the major determinant of the investment performance. The assets will be managed on a total return basis. While Martha & Mary recognize the importance of preservation of capital, it also adheres to the principle that varying degrees of investment risk are generally rewarded with compensating returns. Uniform Prudent Management of Institutional Funds Act (UPMIFA) The Board of Martha & Mary Lutheran Services recognizes that the precepts of fiduciary stewardship and oversight of investment management outlined by UPMIFA is a useful framework for helping guide the Board in process and decision-making. UPMIFA states that persons responsible for managing and investing charitable assets must act in good faith and with the care an ordinarily prudent person in a like position would exercise under similar circumstances. (See Addendum A) A. Asset Allocation Policy 1. The Committee recognizes that the strategic allocation of Funds across broadly defined financial asset and sub asset categories with varying degrees of risk, return, and return correlation will be the most significant determinant of long-term investment returns and Funds value stability. 2. The Committee expects that actual returns and return volatility may vary from expectations and return objectives across short periods of time. While the Committee wishes to retain flexibility 1

16 with respect to making periodic changes to the Fund s asset allocation, it expects to do so only in the event of material changes to the Fund, to the assumptions underlying Fund spending policies, and/or to the capital markets and asset classes in which the Funds are invested. 3. Fund assets will be managed as balanced portfolios composed of equities, fixed income, real assets, and cash. A portion of each portfolio may be allocated to flexible strategies to be managed by the Investment Manager. The expected role of equity investments will be to maximize the long-term real growth of portfolio, while the role of fixed income investments will be to generate current income, provide for more stable periodic returns, and provide some protection against a prolonged decline in the market value of Fund equity investments. Real assets, because of their relatively low correlation with financial assets, are well-suited for inflationary times as they tend to outperform financial assets during such periods. Cash investments will be used for liquidity needs or to facilitate a planned program of dollar cost averaging into investments in either or both of the equity and fixed income asset classes. 4. Each account will have a target asset allocation based on the goal, time horizon and risk tolerance defined by the Committee. B. Diversification Policy Diversification across and within asset classes is the primary means by which the Committee expects the Funds to avoid undue risk of large losses over long time periods. To protect the Funds against unfavorable outcomes within an asset class due to the assumption of large risks, the Committee will take reasonable precautions to avoid excessive investment concentrations. Specifically, the following guidelines will be in place: 1. With the exception of fixed income investments explicitly guaranteed by the U.S. government, no single investment security shall represent more than 5% of total Funds assets. 2. With the exception of passively managed investment vehicles seeking to match the returns on a broadly diversified market index, no single investment pool or mutual fund shall comprise more than 20% of total Funds assets. 3. With respect to fixed income investments, for individual bonds, the minimum average credit quality of these investments shall be investment grade (Standard & Poor s BBB or Moody s Baa or higher). C. Rebalancing It is expected that the Funds actual asset allocation will vary from its target asset allocation as a result of the varying periodic returns earned on its investments in different asset and sub asset classes. The Funds will be rebalanced to its target asset allocation based on defined asset class drift thresholds for each portfolio under the following procedures: 1. The Advisor will use incoming cash flow (contributions) or outgoing money movements (disbursements) of the Funds to realign the current weightings closer to the target weightings for the Funds. 2. The Advisor will review each account quarterly to identify those accounts which have exceeded the established drift parameters. When an asset class drifts outside of a predetermined band around its target weight, the portfolio is rebalanced back to the target 2

17 weight. Accounts whose allocations are within acceptable asset class ranges will continue to be monitored. 3. The Advisor may provide a rebalancing recommendation at any time. 4. The Advisor shall act within a reasonable period of time to evaluate deviation from these ranges. D. Other Investment Policies Unless expressly authorized by the Committee, the Advisor and investment managers are prohibited from: 1. Purchasing securities on margin or executing short sales. 2. Pledging or hypothecating securities, except for loans of securities that are fully collateralized. 3. Purchasing or selling derivative securities for speculation or leverage. 4. Engaging in investment strategies that have the potential to amplify or distort the risk of loss beyond a level that is reasonably expected, given the objectives of their Funds. E. Monitoring Funds Investments and Performance The Committee will monitor the Funds investment performance against the Funds stated investment objectives. At a frequency to be decided by the Committee, it will formally assess the Funds and the performance of its underlying investments as follows: 1. The Funds composite investment performance (net of fees) will be judged against the following standards: a. The Funds absolute long-term real return objective. b. A composite benchmark consisting of unmanaged market indexes weighted according to the expected target asset allocations using the appropriate benchmark for each manager stipulated by the Funds investment guidelines. 2. The performance of professional investment managers hired on behalf of the Funds will be judged against the following standards: a. A market-based index appropriately selected or tailored to the manager s agreedupon investment objective and the normal investment characteristics of the manager s Funds. b. The performance of other investment managers having similar investment objectives. 3. In keeping with the Funds overall long-term financial objective, the Committee will evaluate Funds and manager performance over a suitably long-term investment horizon, generally across full market cycles or, at a minimum, on a rolling five-year basis. 4. Investment reports shall be provided by the Advisor on a (calendar) quarterly basis or as more frequently requested by the Committee. The Investment Advisor is expected to be available to meet with the Committee once per year to review Funds structure, strategy, and investment performance. Aggregate Fund Allocation Guidelines: The aggregate asset allocation target range and minimum and maximum guidelines are attached in Addendum B 3

18 F. Investment Management Selection Investment managers (including mutual funds, separate account managers and limited partnership sponsors) shall be chosen using the following criteria: 1. Costs relative to other funds with like objectives and investment styles. 2. The manager s adherence to investment style and size objectives. 3. Size of the proposed fund, internal; expense ratio and portfolio turnover length of time the fund/manager has been in existence and length of time it has been under the direction of the current managers(s) and whether or not there have been material changes in the manager s organization and personnel. 4. Costs relative to other funds with like objectives and investment styles. 5. The manager s adherence to investment style and size objectives. 6. The historic volatility and downside risk of each proposed investment. 7. How well each proposed investment complements other assets in the portfolio. 8. The current economic environment. 9. The likelihood of future investment success, relative to other opportunities. G. DUTIES AND RESPONSIBILITIES The Advisor The Advisor is a Registered Investment Advisor and shall act as the investment advisor to the Investment Committee until the Investment Committee decides otherwise. Advisor shall be responsible for: 1. Assisting in the development and periodic review of investment policy. 2. Designing and implementing an appropriate asset allocation plan consistent with the investment objectives, time horizon, risk profile, guidelines and constraints outlined in this statement. 3. Identify specific assets and investment managers within each asset category 4. Providing due diligence, or research, on the Investment Manager(s) 5. Monitoring the performance of all selected assets the advisor consults to. 6. Recommending changes to this investment policy statement. 7. Periodically reviewing the suitability of the investments for the Committee. 8. Being available to meet with the Committee at least twice each year. 9. Being available at such other times within reason at the Committee's request. 10. Provide monthly statements and quarterly performance reports. 11. Have discretion to implement the investment plan within the guidelines of the investment policy statement. 4

19 The Finance Committee The Finance Committee shall be responsible for: 1. The oversight of the Portfolio and Investment Policy Statement 2. Defining the investment objectives and policies of the Portfolio. 3. Notifying Advisor of changes to the Investment Policy Statement and to oversee and to approve or disapprove Advisor's recommendations with regards to policy, guidelines, and objectives on a timely basis. 4. Providing Advisor with all relevant information on the organization s goals, objectives, financial condition and risk tolerances and shall notify Advisor promptly of any changes to this information. The Third Party Investment Manager(s) Each Investment Manager will have full discretion to make all investment decisions for assets placed under its jurisdiction, while observing and operating within all policies, guidelines, constraints, and philosophies as outlined in this statement. Specific responsibilities of the Investment Manager(s) include: 1. Discretionary investment management including decisions to buy, sell, or hold individual securities, and to alter asset allocation within the guidelines established in this statement. 2. Communicating any major changes to economic outlook, investment strategy, or any other factors, which affect implementation of investment process, or the investment objective progress of the Fund s investment management. 3. Informing the Advisor regarding any qualitative change to investment management organization: Examples include changes in portfolio management personnel, ownership structure, investment policy, etc. 4. Voting proxies, if requested by the Committee, on behalf of Martha & Mary Lutheran Services. H. BOARD DESIGNATED FUNDS The Board may reserve funds for future projects and growth at their discretion. If done, those funds may be separated from the other investments under this policy in a separate account. 5

20 Addendum A UPMIFA UPMIFA requires a charity and those who manage and invest its funds to: 1. Give primary consideration to donor intent as expressed in a gift instrument, 2. Act in good faith, with the care an ordinarily prudent person would exercise, 3. Incur only reasonable costs in investing and managing charitable funds, 4. Make a reasonable effort to verify relevant facts, 5. Make decisions about each asset in the context of the portfolio of investments, as part of an overall investment strategy, 6. Diversify investments unless due to special circumstances, the purposes of the fund are better served without diversification, 7. Dispose of unsuitable assets, and 8. In general, develop an investment strategy appropriate for the fund and the charity. Thus, UPMIFA strengthens the rules governing management and investment decision making by charities and provides more guidance for those who manage and invest the funds. 6

21 Addendum B Aggregate Fund Asset Allocation Guidelines Asset Class Minimum Maximum Preferred Equities 25% 45% 35% Fixed Income 40% 60% 50% Cash and Equivalents 5% 25% 15% 7

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31 MARTHA & MARY LUTHERAN SERVICES ENDOWMENT POLICIES Approved by the Board of Trustees, September 25, 2014 In recognition of its fiduciary responsibility, the Board of Trustees of Martha & Mary Lutheran Services (hereinafter the Board ) has adopted the following policies pertinent to the operation of the endowment established by Martha & Mary Lutheran Services. The management, investment, and administration of the Endowment Fund shall be in conformance with the [Uniform] Prudent Management of Institutional Funds Act (hereinafter UPMIFA ), adopted by the State of Washington, effective May11, 2009, and attached hereto as Attachment C. Purpose The entire endowment shall be known collectively as the Martha & Mary Endowment Fund (hereinafter the Endowment Fund ) and shall support Martha & Mary Lutheran Services and its subsidiaries ( MMLS ). The Board has established the Endowment Fund in recognition of the fact that donors desire to make permanent donations that will be used in future years to benefit MMLS and the individuals it serves. MMLS will educate the public as to the existence of the Endowment Fund, its terms and conditions, and the policy of Martha & Mary in adding gifts to the Endowment Fund. Definitions 1. An endowment is an investment fund set aside for the long-term support of a charity. The principal is preserved in perpetuity, and a certain amount, determined by institutional policy and consistent with the long-term investment objective, is expended each year for the designated charitable purposes. 2. A named endowment is a component fund within the charity s overall endowment that bears the name of the donor and/or other person(s) chosen by the donor and consists of contributions specifically earmarked for endowment by the donor(s). The annual distributions are in accordance with institutional policy and are used for the stated purposes of the named fund. 3. A general endowment consists of all contributions specifically earmarked for endowment by donors but not designated for a new named endowment, for an addition to an existing named endowment, or a particular purpose. Distributions from a general endowment may be used for the general purposes of a charity at the discretion of its board. 4. A programmatic endowment consists of all contributions specifically earmarked for endowment by donors for a particular purpose but not designated for a new named endowment or for an addition to an existing named endowment. Distributions from a program endowment are to be used for its stated purpose. 5. A quasi-endowment is not a true endowment, for by action of the charity s board, all or a portion of the principal can be expended, and the fund may or may not continue in perpetuity. 1 Approved September 25, 2014

32 Martha & Mary Endowment Fund Quasiendowment (Board Designated; unrestricted) General Endowment (unrestricted) Named General Endowed Funds (unrestricted) Named Endowed Funds: Programmatic Areas (specific yet broadlydefined purposes) Named Endowed Funds: Narrowly-defined Purposes (requires approval) Allocation of Funds to the Endowment by the Board (Quasi-Endowment) The Board may allocate any unrestricted gifts, bequests, or other funds to the Endowment. Distributions attributable to principal allocated to the Endowment by the Board shall be used for such purposes as the Board shall from time to time decide. The Board also reserves the right to withdraw this principal and use it for special needs, although the expectation is that this principal will be set aside for the long-term support of MMLS. Minimum Gifts for Unrestricted Endowment and Named Endowed Funds (Donor Designated) A donor may contribute any amount for unrestricted endowment or for a previously-established named endowed fund within the Endowment. A minimum gift of $50,000 shall be required to establish a new named endowed fund, either for MMLS s general purposes or for one of the following areas. These are known as the Programmatic Area endowment funds: Children s Services Senior Health Care and/or Housing In-Home Care and Care Management A named endowed fund for a more specific purpose may be established subject to the approval of the Board. The amount required for such a fund will depend on the objectives to be accomplished and will be negotiated between the donor and the CEO at MMLS. A donor may choose to fully fund their named endowed fund with payments over a period time not to exceed five years. If the initial contribution to establish a named endowed fund is less than the applicable minimum amount, MMLS shall maintain a system for tracking all contributions for such fund, together with the earnings on the investment of such contributions, until the minimum amount requirement has been met. If five years have passed since receipt of the initial contribution without the minimum amount requirement having been met with gifts (earnings are not considered to meet the minimum amount), then, consistent with any restrictions imposed by the donor with regard to the purpose to be furthered by the contemplated named endowed fund, MMLS may either: spend all or a portion of the separate account in fulfillment of the organization s current needs, or transfer the balance in the separate account to an existing fund within the Endowment. 2 Approved September 25, 2014