| Conference Development Fund tops $40 million
Church investment opportunity experiences
dramatic growth amid corporate accounting scandals and a weak economy.
By Michael Wacht
LAKELAND — The Florida United Methodist
Development Fund recently exceeded $40 million in total investments,
according to the Rev. Tom Marston, president of the Florida United
Methodist Foundation and Development Fund. That amount represents a
500 percent increase in investments over the last 10 years.
A large portion of that growth occurred this
year, Marston said. The Development Fund has received approximately $9
million in new investments since May 1, two-thirds of which came from
increased investment by current account holders. There are 865
investors in the Development Fund—391 are churches and 465 are
individuals and trusts.
The Florida United Methodist Development Fund is
a non-profit, service organization that accepts investments from
individuals, churches and organizations across Florida and makes loans
to Florida Conference churches, agencies and missions for renovation
or expansion. It began in June 1976.
Marston attributed the increased investments to
two factors. The first is a greater awareness of the Development Fund
throughout the conference. “More churches have taken out loans and,
in doing so, have also made their people aware of the [Development]
Fund,” he said. “The second is our investment rate is very
attractive.”
The Development Fund currently offers investors
4 percent interest “on money they can withdraw at any time,”
Marston said. “We encourage people to leave their money in the Fund
for a while, so we can use it to make loans, but if they have an
emergency and need cash, they can get their money almost immediately.”
Marston said the Development Fund tries to
remain competitive with six-month Treasury Notes and Certificates of
Deposit offered by commercial institutions like banks. “We’re
significantly higher than most of those,” he said, adding investors
can also be sure their money will be used to benefit Christian
organizations.
That investment strategy is also a positive in
today’s economy, according to Marston. People feel more comfortable
investing money in the church during uncertainty in many investment
markets and the accounting scandals that have rocked some of the
nation’s largest corporations.
“Knowing also that the Development Fund only
invests in first mortgage loans with United Methodist churches in the
Florida Annual Conference, many investors feel more comfortable with
the stability of the investment,” he said.
The Development Fund also offers its loans at or
below the current commercial rate. “We look at commercial loan rates
and attempt to ensure that what we offer on loans is less than what
commercial loans are,” Marston said, adding the current loan rate is
6 percent.
The Development Fund currently has $28 million
loaned to approximately 130 Florida United Methodist churches and
agencies. An additional $3 million is committed to churches that are
in the midst of building projects.
Marston said the Development Fund is allowed to
loan 85 percent of its investments because 15 percent must be
available to cover withdrawals. With the additional investment money
the Development Fund is now able to loan an additional $3 million. It
is also able to make loans up to 5 percent of its total investments,
allowing individual loans of up to $2 million.
Although the Development Fund is not federally
insured, like bank and credit union deposits, it has more than $3
million in reserves and a history of stability. “The [Development]
Fund has been in existence since 1976, and we’ve never had to
forgive a loan or had a loan go unpaid,” Marston said. “That’s
remarkable when you consider what happens in banks.”
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