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Written by Jack Haberer Editor
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Wednesday, 21 May 2008 23:55 |
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The members of the General Assembly Council (GAC) have taken great strides to enlarge our world mission work. In the process, they and Presbyterian Foundation together have sought to deploy all available funds for use in mission and ministry.
However, three proposals coming before the San Jose GA this June 21-28 could alter the way those funds get invested and deployed (see p. 8). If the commissioners handle these proposals well, the mission of the church will be advanced. If mishandled, controls built into the system to ensure proper allocation of funds may be compromised.
The first proposal comes in the form of advice from the Advisory Committee on the Constitution (ACC). After the GAC and foundation together sought and received policy advice from the Stated Clerk regarding the allocation of funds – advice agreed to by all the parties – the GAC director, Linda Valentine, asked the ACC to confirm and clarify that advice. The ACC did more than that. It recommended that this GA declare that the GAC, not the Foundation, should have the final say in settling disputes over the appropriation of donor designated funds.
The General Assembly of 1799 formed the Presbyterian Foundation as a separate corporation for the purpose of managing medium- and long-term major funds contributed to the church for the implementation of its mission. The operative term is “separate corporation,” because the commissioners to that GA determined that those who manage the funds should not be the same persons who actually utilize or benefit from such funds.
The hens ought not to be guarding their own hen house. That calls for the work of a watchdog.
The watchdog task gets complicated when available monies go unutilized due to the difficulty of meeting the original donor’s intent, e.g., providing feed for the horses that pull the fire wagons. Redirecting those funds requires secular court approvals, so the GAC and foundation together have proposed such changes dozens of times before. However, the standard of the court for making such changes is that the donors’ specified terms are “illegal, impossible, or impracticable,” and on occasion the foundation has disagreed with GAC’s assessment of such difficulties. This is where the new proposal from the ACC comes into play.
That proposal asks the GA to declare that when the two entities disagree on the allocation of funds, the “General Assembly or its designee make the final determination.” Then it asks the GA to “Designate the General Assembly Council to make the ‘final determination’ on its behalf in the interim between meetings of the General Assembly.”
In other words, as Steve A. “Sam” Martin, former board chair of the Foundation has told the Outlook, “This will overturn the judgment of the Assembly of 1799, when it created the Presbyterian Foundation, declaring that those who manage the monies in trust for the church need to be independent of those who use the proceeds of that trust.” He added that the separation between the mission agency and the fiduciary agency is standard procedure. “Every trust officer in the world would know that.”
The second proposal, directly from the GAC, proposes changing the use of Church Extension Fund 201330 – set up originally by a past General Assembly, and accordingly, can be changed without court approval. At stake: approximately $18 million. It would replace the existing restrictions of “grants for new church development or church extension situations” to “church extension purposes which are defined as loans” for site purchase, construction, etc., and for “ … grants to particular churches and presbyteries for projects associated with organizing new congregations, transforming existing congregations, or developing congregational-based ministries that reflect the [PC(USA)]’s commitment to inclusiveness, diversity, and ecumenicity.” In other words, the monies can be used for any congregation-based programs that aim to extend the church. It then adds, “Salaries of staff at presbyteries and particular churches … [and] … at the General Assembly level … in proportion to such staff’s activities to support church extension programs are considered to be operating expenses payable from the Fund.” The definition becomes broad and wide.
The third proposal, overture #85 from the Synod of the Southwest proposes that part of the 1986 policy and 1996 agreement be vacated by granting the GAC the freedom to choose where it will invest major funds for its use. The synod’s rationale calls for maximum flexibility to maximize investment returns.
What it overlooks is that such a change in investing would entrust the funds into a body not sharing our theological, ecclesiastical, and missional convictions. The investment management firm would not be accountable to the denomination. Who would ensure that the guidelines approved by past GAs in response to the Mission Responsibility Through Investment committee (MRTI) would be followed? Would the new investment management firm partner consult with MRTI to participate in corporate engagements as the foundation currently does?
Should the commissioners approve such radical changes? Will they realize that such changes are radical? Will this all just slip below the radar?
At minimum, the commissioners will want to ask some hard questions. Why should policies in place for 200+ years need to be changed now? How would secular trust officers respond to these changes? How shall we be allocating monies placed in restriction over past years? What funds continue to sit untapped? Are some of those restrictions “illegal, impossible, or impracticable,” or are they just out of sync with the present drift of programming as defined in the GAC or some fixed mindsets of the foundation?
If the commissioners think the GAC and/or the foundation is acting inappropriately, the better side of discretion might suggest that the rules be left in place and, instead, that the disagreeing parties set up better lines of communication and negotiation, and even seek mediation, a path the entities have recently agreed to follow.
— JHH
Editor’s note: This is a revised version of the editorial published in the Outlook magazine of May 26. The print version neglected to state the fact that the foundation and GAC together sought the advice of the Stated Clerk on how best to deploy all funds set aside for mission and ministry; that the advice received there was agreeable to all parties; and that the GAC Executive Director sought an opinion from the ACC to confirm and clarify that advice, not “to seek easier access to our long-term investments.” Also, the print version may leave the impression that the three proposals have arisen as a coordinated effort. They arose separately, and the issues they raise are distinctly different.
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Thanks for your recent editorial which mentioned Overture 85 from Synod of the Southwest, along with other issues coming to the 218th General Assembly. One expects issues to surface in the months before the assembly, and somewhat to our surprise this one has engendered more conversation than we expected.
I want to clarify, however, some of the misunderstandings about the intention of Overture 85 that are reflected in your editorial in the May 26, 2008 issue.
1.Overture 85 seeks no change in the present General Assembly directive that all of six mission agencies invest monies using Mission Responsibility Through Investment guidelines. Any assumption that we are suggesting non-socially-responsible investment is a specious argument. OVT 85 does not change any directive established by the General Assembly regarding socially-responsible investing.
2.Overture 85 does not address ANY issues related to donor contributions to the Presbyterian Foundation. Instead, it addresses money placed with the Foundation by the GAC from the GAC’s receipts from donors not to be held in a permanent endowment.
3.The Foundation created in 1799 was not given the responsibility to manage medium and long-term major funds. That language – medium and long-term funds – is much more contemporary. The Foundation’s value for all of us has been its original purpose of receiving monies, to be held in trust, from faithful donor Presbyterians who wanted to further the mission of Jesus Christ through their church. In 1996, the PCUSA General Assembly added to the Foundation’s responsibilities the establishment of a mutual fund and a trust company to manage investments placed with the Foundation by congregations, governing bodies and individual donors.
4.Your editorial asserts that to invest money in any bank, mutual fund or trust company not affiliated with the PCUSA would in some way risk theological, ecclesiastical or mission integrity. That would surprise many congregations, individuals and governing bodies who invest their money faithfully and carefully with investment firms, banks and many with an emphasis on socially-responsible investments. Many congregations and governing bodies have established investment policies which include abiding by the Mission Responsibility Through Investment Guidelines, and in every way seek to embody the integrity and values we share as Presbyterians.
What everyone seems to be forgetting is that prior to 1986, the membership of the General Assembly Council and the Foundation Board were identical. With the organization of the newly-reunited church and for the first time in our history, the Assembly Council no longer was in charge of the investment of their own non-permanent funds. Things have not always been the way they are now. Further, in 1996, when the GA gave permission to establish the New Covenant Trust Company and New Covenant Insurance Company, the GA established these boards but made them solely responsible to the Foundation with no direct accountability to the Assembly -- thus distancing the Foundation’s subsidiary corporations from the Assembly’s oversight.
The Synod of the Southwest overture seeks to enable the GAC to exercise the same authority over its unrestricted funds as do all other agencies of the General Assembly.
Sincerely,
Janet M. DeVries
Synod Executive & Stated Clerk
Synod of the Southwest