INVESTING IN MINISTRY FUND - THE ABILITY TO RESPOND
There are many places for a United Church congregation to invest its funds. For congregations that have some penchant to risk on the stock market, there are brokerage firms and banks ready and eager to open accounts and establish relationships. For congregations wanting to play it safe, the traditional GIC is available at all banks and credit unions. In both cases, the income from the investment is put to important work in the local church paying bills, covering housing allowances, and topping up the annual budget.
"What many congregations do not realize is that by investing in these traditional ways, only the investment income is available for the mission goals of the congregation." Maureen Huismans, former President of Toronto United Church Council goes on to say, "We believe that our United Church congregations, when given the opportunity, would be open to investment strategies in which both capital and earnings can make a difference in the work of the church. The simple fact is some United Church congregations have funds from endowments and property sales to invest; many other congregations have a necessity to borrow money for capital upgrades and improvements to their facilities. The partnership possibilities are so obvious, one wonders why it has taken so long to make the connection."
"When congregations and their trustees were broached with this vision of an inclusive investment strategy, they were eager to hear more," reports Charles Drury, a member of Council's Finance & Investment Committee. "In almost every case, the discussion was formed around the question, 'Is there, in fact, a way we can invest in United Church ministries?'"
The exciting news is that there is a way for this investment to happen. In 2001, Council established the Investing In Ministry Fund. And the initiative has been given a vote of confidence as revealed by its dramatic growth over the past decade.
"The Investing In Ministry Fund was the result of a year-long process working with congregations, trustees, lawyers, and government regulators," notes Charles Drury. The process was detailed in every way. Council's By-laws and Supplementary Letters Patent were carefully reviewed. Legal opinions were sought and queries were made of the Ontario Securities Commission. The Provincial Securities Act, Loan and Trust Corporations Act, Trustee Act, and Corporations Act were all examined. "We wanted to be sure every detail was covered as much as possible," Charles continues. "With this information gathered, we were ready to act and the Investing In Ministry Fund was established."
Let's take a close look at the nuts and bolts of the plan, and, hopefully answer the important questions that you have.
Is there a minimum amount we need to invest?
Yes. The current minimum amount is $25,000.
Who can participate?
All information here is applicable to investments by congregations, United Church corporations, and individuals (yes, individuals can and do participate).
How is our portion of the earning determined?
The Ontario Securities Act requires Council to invest your money in a way that 1) does not result in Council receiving a commission or other remuneration, and 2) does not have Council's assets benefit any lender. Your investment, therefore, earns its proportionate share of the total earnings of the Investing In Ministry Fund less Council's administrative costs. While we cannot tell you - or guarantee - what the earnings will be, we can tell you about Council's lending policy to congregations and mission units and our experience making loans to them.
The earning you receive will come from two major sources. The first and largest source is the interest paid by congregations and mission units borrowing from the Investing In Ministry Fund (more details are below). The second source is from the investment of funds being held in anticipation of either being loaned to potential borrowers or being being returned to investors upon completion of their term if they choose not to extend their investment. Audited financial statements of the Investing In Ministry Fund will be forwarded to you annually.
The graph and chart below both show the Investing in Ministry return on funds for the past 10 years as compared to GIC rates and the TSX Index.
1 3- and 5-YR GIC rates taken from the Bank of Canada website (average rate per year)
2 S&P/TSX Composite Index (CDN$) annual numbers taken from Bloomberg
3 Past results as recorded above do not guarantee the Fund's future results
Investing in Ministry Fund returns are based on income from two
sources. Loans made from the fund return interest income. Funds not
currently loaned are invested conservatively and in compliance with the
United Church of Canada ethical standards. They are affected by capital
gains and losses on the fund investment portfolio.
If we look hard, can we find better rates of return for our investment?
Yes, you probably can find interest or investment rates that offer a better return. The Investing In Ministry Fund does not make a claim to have "the best rates in town". Rather, it offers:
- a reasonable rate of return on your investment;
- an assurance that your investment is secure and guaranteed by Toronto United Church Council;
- an easy method to manage your investment portfolio; and most important of all,
- an opportunity to be a partner with other United Church congregations and mission units as together we reach out to our communities in the name of Jesus Christ.
How are earnings paid?
Your earnings are paid by cheque on your choice of an annual, semi-annual, or quarterly basis.
Is there an administration service fee?
No. As noted, Council is not entitled to receive, nor does it wish to receive, a commission or any other remuneration. Council is to be reimbursed for its "out-of-pocket" administrative costs including investment management fees, audit fees, and bank charges.
What is the term of our investment?
Your investment with the Investing In Ministry Fund will be for a term of ten years or longer. You may redeem your investment in full or in part on the fifth anniversary and each anniversary date thereafter upon 180 days written notice to Council. The 180-day provision allows Council to make appropriate plans associated with your request. At the end of the full term, you may extend your investment for a further minimum five years with the right of full or part redemption on each anniversary date.
How will money invested be secured and guaranteed?
The Investing In Ministry Fund is a fund of Council administered separately from the rest of Council's assets. Council will issue as security to each investor a promissory note providing for the guarantee of the earnings payment schedule as chosen and for the repayment of the full investment at the maturity date of the contract term if the investor chooses to redeem the invested amount. The promissory note will be signed by the officers of Council and backed by the Council's assets.
As added security, participants in the Investing In Ministry Fund will be given a General Security Agreement (GSA) which is a floating charge against Council's personal property should Council be in default of its obligations to you. The GSA is registered under The Personal Property Security Act with the Ontario Ministry of Consumer and Commercial Relations.
What happens if our congregation or mission unit requires its invested money during the term for an emergency capital need?
Similar to a GIC, the investment with Council is for a fixed term. While Council would normally be unable to prematurely end the contract in the first 5 years, Council would work closely with you to find acceptable ways to finance your project until the investment can be redeemed. Council understands this to be a partnership, and this partnership is important to Council.
What would be suitable funds for investment?
Endowments and reserves not immediately required can be invested in the Investing In Ministry Fund to earn income for you while your capital makes a difference in a neighbouring congregation or mission. Since the minimum period before redemption is five years, money you need in the short term should not be considered. Some examples may be helpful.
Perhaps your congregation sole the manse and the Presbytery has directed that the income be used for a specific purpose. Using the Investing In Ministry Fund permits you to receive and apply the earned income for the intended purpose while investing the capital in United Church projects within your area. The same consideration would apply for bequests received where the will has directed only the income be used. Imagine how the donor would feel if he or she knew that both the capital and earnings of their gift were at work in the church through their congregation and beyond.
How will our money be put to use?
Your funds are reinvested with congregations financing capital improvements to their buildings (such as new building construction, accessibility retrofits, fire and safety retrofits, roof and other structural repairs, additions, and upgrades). Mission units wanting to borrow funds to provide affordable housing, shelters, community kitchens, and other facilities for community outreach ministry will also be considered. Loan requests will be evaluated using the Council's well-developed and tested criteria. Loans under $50,000 will be secured with a promissory note; loans over $50,000 will be secured with a first mortgage in favour of Council (ensuring additional security for both investors and Council). Council has been making similar capital loans for more than 100 years. Over that time, United Church people have diligently honoured their commitments knowing other congregations and mission units will use their repaid funds for similar purposes in other communities.
Lastly, why is the Investing In Ministry Fund such a popular investment option?
The reasons are clear. First, the church has a profoundly Christ centred attitude towards money and investment that is different from prevailing attitudes in our society. And secondly, the need for investment in congregational development and mission outreach is greatly needed. Right now, more congregations and mission units are preparing to apply for financing for work urgently needed if they are to grow and meet the emerging needs in their neighbourhoods and communities. The commitment of investors to the Investing In Ministry Fund is the cornerstone of the church's ability to respond.
For further information, see our Investing in Ministry Fund brochure and 2018 report.
For more information, please contact Jim Patterson at email@example.com or at 905-771-5124.
A loan from the Investing In Ministry Fund made it possible for Hope United Church to renovate its 90 year old building and attract a major long-term tenant, financing other important renovations and allowing the congregation to redefine its city ministry.