LAKELAND — When it comes to the foundation’s investment funds, staff and board members have decided more isn’t always better. Now, Florida United Methodist churches and affiliated agencies have the option of investing in three managed funds instead of five.
The change is based on experience with the funds since 2014, when the foundation increased the number of funds available. The goal was to provide more choices with greater flexibility, but the options proved less distinct than anticipated, says the Rev. Mark Becker.
As a result, the foundation’s investment committee and consulting firm, Chicago-based DiMeo Schneider & Associates, modified the funds to simplify the choices and provide “clear differences in both expected return and risk,” Becker said.
Investments can now be made in the Cautious and Balanced Growth funds, which have been part of the fund structure since 2014 and are largely unchanged. Cautious provides a regular and constant income stream with high liquidity. Balance Growth offers balance between income and growth.
The third option is Aggressive Growth, which is a combination of two previous funds, but with a higher target rate of return.
Fees on the funds did not change, and that was important, Becker says. The foundation regularly monitors its fees to ensure they remain competitive and appropriate based on the value of the funds.
Florida churches can also invest is the foundation’s Development Fund, which remains unchanged. It’s similar to a savings account, but provides a higher annual interest rate than offered by most banks. Launched in 1976, the fund provides low-interest loans to churches and agencies for new construction, renovations and loan refinancing. Any Florida church, business or resident may invest.
Both types of funds can help churches maintain balance between risk and return, Becker says. The Development Fund provides a higher degree of liquidity and less risk, but the investment funds “historically provide higher returns than simply putting money into a money market account,” he said. “The key point to remember is that the underlying philosophy of investing in the marketplace is that you should be there for the long term … to take advantage of the long-term growth opportunities the market provides.”
Many Florida Conference churches and agencies already do. As of June, 106 had 284 foundation investment accounts.
First United Methodist Church in Orlando is one of them. The church has been investing many of its endowments in the foundation’s funds since 1995. Vernon Swartsel, the church’s endowment committee chairperson, says they’ve continued because they feel good about the options available and the socially driven nature of the funds.
“I doubt we would have (established the endowments) if the foundation hadn’t been there,” Swartsel said. “The foundation is really looking after the churches. It’s been a very good relationship over the years.”
Consistent growth has also been key — one of the church’s endowments has gained $300,000 since its inception.
But beyond the financial gains, participation in the funds enables investors to support ministry. The majority of the assets are administered according to the Social Principles of The United Methodist Church, investment guidelines established by the foundation’s investment committee and the denomination’s guidelines on environmental, social and governance investing.
The foundation also uses revenue earned from the funds to provide many of its free consulting and educational services, as well as a limited number of ministry and emergency grants for churches and agencies.
The foundation is a “family investment,” says the Rev. Tom McCloskey, senior pastor at First, Orlando. “We’re all in the same business together.” And that’s spreading the Gospel, sustaining the church and bringing “people into a relationship with God through Jesus,” he says.
Becker agrees. “The foundation is a part of the Methodist connectional system,” he said. “We exist for churches and their financial wellbeing. We view our task as a ministry and are here to serve the Kingdom of God.”
More information about the funds is available at www.fumf.org.
* Parham is the foundation’s director of communications and public relations.