The Rev. Jeff Bennett could tell you a thing or two — or even three — about the Florida United Methodist Foundation.
That’s because the pastor at First United Methodist Church in Stuart has taken advantage of the foundation’s financial programs in three ways — for his church and on a personal level.
As both a borrower and an investor, the church has two distinct vantage points on the benefits of partnering with the foundation. With the loan it received from the foundation’s Development Fund, the church got lower interest rates, attractive terms and some flexibility on payments if needed in emergency situations.
And by investing in the foundation’s investment funds, the church is able to fund projects and programs on campus, while supporting missions and building projects throughout the Florida Conference.
Now, after a long and solid relationship with the foundation’s team, Bennett and his wife decided it was time to open a Development Fund account of their own.
Any Florida resident, church, organization or business can invest in the Development Fund with a minimum of $100. Investors earn a competitive interest rate, while the foundation uses the fund’s accumulated assets to offer low-interest loans to churches and United Methodist-affiliated agencies for new construction, expansion and maintenance.
The fund currently pays 2% interest on investments and charges 4% on loans.
“To date, we’ve mainly invested in stocks and bonds, but now that we’re within eight years of retirement, we’d like to focus on less volatile investments with new money we’re setting aside,” Bennett said. “The interest rate is better than commercial banks, and we can withdraw money without penalty if need be. But the very best part is knowing that our investment can be used for the good work of local churches.”
Getting much more
Prior to Bennett’s appointment in 2016, the church took out a loan from the Development Fund to help purchase a 40-acre property on which to build a new sanctuary.
Due to a change in circumstances, those plans never materialized. The church owes $340,000 on the $1.2 million loan and will pay it off in full when it sells the property. Because it will make a slight profit, the church will use the additional funds for a long-term maintenance program for future expansion, upkeep on the current campus and other improvement projects.
Bennett is a big proponent of borrowing from the foundation. He says its rates are competitive, if not better, than commercial lenders. And in times of unforeseen emergencies, such as a hurricane or pandemic, the foundation has given churches a temporary pause on paying the principle on their loans.
Bennett’s church was one of dozens that took advantage of the interest-only option offered when COVID-19 hit, freeing up cash for pandemic-related expenses and to offset a drop in church donations.
“I can’t tell you how much that helped,” Bennett said. “That’s not something you would get from a bank.”
More money for ministry
Perhaps the most notable use of the foundation’s financial programs is letting the foundation’s team handle the church’s 20 endowments.
Of its $2 million in deposits, one-fifth is in the Development Fund, earning 2% interest and easily accessible, with the rest in the foundation’s investment funds, available only to conference churches and affiliated United Methodist agencies.
“The saying ‘doing well while doing good’ certainly applies here. Knowing that our contributions enable other churches to do the kingdom’s work is a great feeling.” — Rev. Jeff Bennett
The investment funds are an option for charitable gifts, memorials and other designated donations and are invested in stocks, foreign equities, bonds and mutual funds. Depositors can draw the interest for ministries and other projects, and the revenue earned from the funds enables the foundation to provide many of the free services and grants it offers to individuals and ministries.
An investment committee comprising members of the foundation’s board of directors meets quarterly with independent review management to evaluate the fund performance. The board also provides the oversight that ensures the investments follow United Methodist guidelines on environmental, social and governance investing.
The portfolio gives investors three choices: cautious, balanced growth and aggressive growth funds. In 2020, churches and agencies earned $2.35 million from their investments.
For church volunteer Bruce Trembly, who serves as endowment chair, having the foundation oversee the financial management of these gifts makes his job a lot easier.
“Years ago, when a member left an endowment to the church, it was just put in an account and drawn out as needed,” he says. “Now, that money is working for us. We only use the interest and leave the principle, which means that the original financial gift just keeps growing and blessing us and others.”
In some cases, a donor specifies how the money should be spent, such as for a college scholarship for tuition costs or for youth missions. Other gifts are left to a church subcommittee to decide how they should be spent.
Four times a year, the subcommittee meets to review and vote on requests for financial assistance. Proposals must include documentation for the gift and cannot include ongoing salaries or operating expenses.
“The idea is to help with the launch of the project and to demonstrate how it will be sustained in the future,” Trembly says. “In other cases, it’s just a one-time check, maybe to help with improvements or to buy equipment.”
The endowment funds have helped the church:
- Renovate meeting rooms and its music ministry suite.
- Purchase tables, chairs and stage curtains for the fellowship hall; audio visual equipment to accommodate streaming worship services/virtual meetings; laptop computers for remote work; and Bibles for its mission house and Manna Kitchen.
- Provide seed funds for a large maintenance project, which was paid back with donations.
- Create a memorial garden.
Paying it forward
Church members and the community often witness the endowment funds in action.
The church recently joined a dozen other churches as a partner in Family Promise of Martin County, a program that houses homeless families at churches for a week at a time while they get back on their feet. The church’s renovated meeting rooms — decorated in a more home-like atmosphere — are being used for the temporary residences.
Another recent recipient is the church’s preschool, which suffered a loss in revenue when shut down during COVID-19. With endowment funds dedicated by the donor for Christian youth education, the preschool will be able to buy new curriculum and purchase iPads for staffers, who have been using their own devices.
As the endowment chair, Trembly’s main goal is to save the investment’s principle. That solid financial cushion for the church’s future provides “peace of mind,” especially if the economy falters or unexpected emergencies arise.
“Being good stewards of these gifts and donations is what we’re supposed to do,” he says. “And with the foundation’s finance team, I have nothing but confidence in their management of our funds.”
Bennett agrees. Having access to funds that can be withdrawn quickly to accomplish campus projects and missions is something all pastors want. And on a personal level, he and his wife are hoping to build a comfortable nest egg for their retirement.
“The saying ‘doing well while doing good’ certainly applies here,” he says. “Knowing that our contributions enable other churches to do the kingdom’s work is a great feeling. The benefactors put their faith in us to do the right thing with their gift, and the foundation provides the expertise and confidence to do just that.”
Money to loan
Up to 90% of the Development Fund can be loaned for mortgages, with a reserve fund of $7.5 million or 10% of the fund (whichever is less) held in the form of cash and cash equivalents to provide a level of liquidity to account investors.
The fund currently has $150 million in deposits, with $120 million out in loans. It has $16.5 million available to loan.
“Right now, we’ve got more deposits coming in than loans going out,” said Andy Craske, the foundation’s vice president of loans and investments. “That puts us in a good position to lend.”