High Desert Institute
High Desert Community Development Fund
The High Desert Community Development Fund (HDCDF) is a separate nonprofit initiative designed to provide reliable, long-term financial support for the High Desert Institute’s (HDI) programs and land purchases. By establishing a nonprofit endowment fund, we transform one-time donations and bequests into a self-sustaining financial engine that empowers HDI to continue acquiring land, building sustainable outposts, providing critical infrastructure, and funding ongoing projects. This fund ensures the long-term viability of our efforts to support resilient communities in the high desert.
Mission and Purpose
The core mission of the High Desert Community Development Fund is to build and manage a safe, diversified portfolio of passive index funds and index dividend funds. These investments are designed to generate returns that cover the operational costs of the HDI, including property taxes, land acquisitions, and the maintenance of essential infrastructure. Any additional returns generated will be used to fund HDI’s programs, reinvest into the fund for growth, or assist with future land acquisitions. This strategic financial structure will ensure that HDI’s impact on the community continues to expand, creating a lasting legacy of sustainability, education, and infrastructure for generations to come.
Initial Portfolio Proposal
The proposed portfolio is composed of the following four core categories:
- 25% US Equity Index Funds
- Examples: VOO, SPY
- These funds track the U.S. market, providing growth from a diversified selection of large-cap stocks.
- 25% International Equity Index Funds
- Example: SCHF
- This portion ensures international exposure to developed markets outside the U.S., further diversifying the fund’s global reach.
- 25% US Dividend ETFs
- Example: VYM
- Dividend-focused funds that invest in high-yielding U.S. stocks to provide a steady stream of income while still benefiting from capital growth.
- 25% International Dividend ETFs
- Example: DWX
- International dividend ETFs focus on global dividend-paying companies, generating income while offering international diversification.
Backtest Analysis
The backtesting analysis of this proposed allocation shows a balanced mix of growth and income-producing assets. A diversified approach split between U.S. large-cap (VOO), international equity (SCHF), U.S. high-dividend (VYM), and international high-dividend (DWX) ETFs yields a 9.45% annualized return with a 2.53% yield and 13.9% volatility. This diversified structure smooths out market swings, ensuring a steady income stream for the endowment’s payouts.
Over the long term, this strategy will ensure the sustainability of HDI’s projects. The annual rebalancing strategy ensures that each asset class remains in alignment with the original target, adhering to a disciplined buy-low, sell-high philosophy. If we raise $100,000 for the fund at this allocation, we would see an average return of about $11,980 per year in income, which would cover property tax obligations, fund new land acquisitions, and support ongoing HDI programs.