Managing the church’s money

Managing the church’s money

Earlier this year – yes, it was early in 2020, though it seems a long time ago now – I gave a speech at an event that discussed the cladding of commercial buildings. Don’t worry, this piece isn’t about cladding, but something that was said during the Q&A session after my speech.

A chap in the audience prefaced his question with an interesting observation. He said that the Uniting Church’s financial model was, in his view, a unique and outstanding one.  As far as I know he’s not a member of the Church, but he was commending the Synod of NSW & ACT for the way we pool all the financial assets of congregations and other Church entities, managing them as a central pool of funds for the benefit of the whole Church.

Of course, I agree with him. I think the Uniting Church in NSW & ACT has made an excellent decision to manage its cash and investments in-house. This means that, instead of the church’s liquid funds generating profits for bank shareholders, they are earned by Uniting Financial Services (UFS). Congregations get the same interest as they would investing elsewhere, but the Synod gets to make use of the profits in doing things like providing training and formation for ministers.

I’ve wondered at times when and how that decision was made. I knew it went back at least as far as the Synod meeting of March 2000, which passed the resolution that enacted the compulsory deposit policy, which remains in place today. However, since the organisation that’s now known as UFS has been investing funds and providing income to the Church for 90 years, I figured it probably goes back further than that.

Recently I was given cause to investigate the history of this approach. What I’ve discovered is the story of some great servants of the Church over the past 9 decades who saw the importance of the Church dealing wisely with its money to serve the common good.

The story starts in March 1930 with the formation of the Methodist Trust Association (MTA), for the purpose of holding monies in trust for the Church and earning interest income from secure investments. In the early years, the main beneficiaries of the income were the Church’s Overseas and Home Missions Departments. For a long time the assets were held to maturity, then reinvested.

That continued until 1965 when a dynamic fellow by the name of Roy Glover took over as the Synod’s Property Secretary, which included oversight of the MTA. Roy was an active member of the Church – eventually becoming the Rev Roy Glover – but also an experienced businessman. His initiatives resulted in a more active approach to managing a wider range of investments in order to generate higher returns for the church than just earning interest. To oversee this operation, people were recruited to the Board who had appropriate investment and business skills.

This more active Board created new products into which church entities could deposit funds and also established the Methodist Investment Fund for individuals to place investments. The Fund  earned the income to pay to its investors by itself investing with the MTA, so that there was a common pool of funds being managed. Although not at that time ‘compulsory’, the Trust worked hard to make its investment products attractive to church and private investors, resulting in growth in the deposit base.

(Incidentally, the two-pronged structure essentially remains in place today at Uniting Financial Services. Church organisations invest directly with UFS, while the Synod’s Property Trust issues debentures to private individuals, but then invests them via UFS.)

As to the investment activities of the MTA, these also became more focussed on doing more interesting things in order to generate better returns. The MTA began writing commercial mortgages in the mid-1960s and was actively involved in a number of church property developments through the 1970’s. These included the current site of both Wesley Mission and the Synod offices at 222 Pitt Street in Sydney as well as many aged care facilities, taking advantage of the Whitlam Government’s generous funding for this key social need that the Church had been involved with for many years already. Investment in shares also increased, with ethical considerations being important in deciding which companies to hold.

With the formation of the Uniting Church in 1977, the MTA’s work carried on with a formal name change to the Uniting Church Trust Association (UCTA). Soon after, while Rev Glover remained as the Executive Director (ED) with oversight of UCTA, the day to day management was taken on by another stalwart of the Church, Mr Ed Walker, who eventually became ED in 1982.

Mr Walker oversaw a number of key initiatives, including extending the investment options from at-call accounts only, adding term investments to the product mix, as well as the realisation through sale of some of the property developments of the previous decade. These steps were successful and the many bodies across the Synod supported the UCTA by investing with it. Ultimately, that became widespread enough that doing so became the policy enacted in 2000.

Roy and Ed believed that looking after money properly was important. They believed that the pooling of Church and private individuals’ funds to deliver not only investment returns to them, but a surplus for the use of the wider church, was a positive and wise thing to do. They weren’t the only two individuals to play key roles in developing this ministry by any means (and I mean no disrespect to the others by not mentioning them here), but their contributions caught my attention as the current occupant of the position they held. I’m humbled to be leading an organisation that’s as strong as it is because of their great work.

So I’m thankful to my audience member for his observation about our financial model and I say ‘three cheers’ to all the men and women over the last 90 years who’ve made the church’s money matter. Please pray for me and the team at UFS as we seek to continue what they started.

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3 thoughts on “Managing the church’s money”

  1. I also wish to acknowledge others not named in the article, only because I would have run out of space!
    In no particular order: Gordon Andrews, Robin Dyer, Colin Gillmore, Bert Hely, Jim Mein and Philip Slade.
    Harry Herbert was a champion of ethical investing who worked closely with UFS.
    And in more recent times, setting the ship right after it faltered for a while, Michael Anderson and Neil King.

  2. Thanks Warren, well written and it’s good to keep the origins in mind. It was definitely visionary. Those 2 gentlemen, plus the other very familiar names you acknowledge all did tremendous work.

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