Investments and Endowment

Posted on by Steve Scott

[Approved by Board of Trustees Feb. 16, 2017 and approved by membership May 21, 2017; amendment approved by board Jan. 18, 2018 and approved by membership May 6, 2018]

Contents

Authority for Policy

This policy is adopted in accordance with Article 7, Section 2 of the Bylaws, which states:

Endowments, Trusts, and Gifts: The church shall maintain one or more endowment funds, which shall be administered by the Investments and Endowments Committee in accordance with policies adopted by the Board of Trustees and subsequently approved by the membership at an annual or special congregational meeting. The policies shall mandate preservation and enhancement of value and prudent investment consistent with the church’s principles. No part of the principal of the endowment funds may be expended without the approval of the membership at an annual or special congregational meeting. With the concurrence of the Investments and Endowments Committee, the board shall have authority to allocate interest and dividend income from endowment investments to the general operating fund and other funds of the church if such allocation is determined to be consistent with preservation of the value of the endowment funds.

Administration

The church’s investments and endowments shall be administered by the Investments and Endowments Committee (referred to in this policy as “the Committee”) in accordance with this policy.

Statement of Investment Objectives

The primary investment objectives are to:

  1. Protect the long-term principal value through prudent investments consistent with the church’s principles.
  2. Cause the total value of investments to appreciate over time, exclusive of growth derived from contributions.

To accomplish these objectives, the Committee shall seek to maximize return on investments, consistent with an appropriate level of risk and subject to liquidity needs.

Additionally, the assets should always be diversified among investments that have different risk and return characteristics to provide reasonable assurance that investment in a single security or class of securities will not have a significant negative impact on the value of the assets.

Prudent Investor Rule

In making investment decisions and in supervising and managing assets, the Committee shall act with the degree of care, skill and diligence under the circumstances then prevailing that a prudent investor acting in a like capacity and familiar with financial investments would use in making investments of like character and like aims.

Selection and Rebalancing of Investments

In selecting investments, the Committee shall consider the following factors and shall review and rebalance investments periodically based on these factors:

  1. Diversification.
  2. Safety of principal.
  3. Yield.
  4. Maturity.
  5. Consistency with the church’s principles, including the avoidance of investments in entities whose activities have an adverse impact on social justice, economic justice or the environment.

The Committee shall refer to the investment principles of the UUA Common Endowment Fund as a guideline for investments consistent with the church’s principles.

Proxy Voting

If any investment owned by the church provides an opportunity for proxy voting, the Committee shall report that opportunity to the Board of Trustees, which shall decide how to vote consistent with the goals and interests of the church.

Endowment Fund

The purpose of the endowment fund is to assure the long range financial future of the church and to fund capital needs and special projects that are consistent with Unitarian Universalist principles and further the mission of the church. [This paragraph was added by amendment finally approved May 6, 2018.]

The aggregate pool of investments owned by the church shall constitute the Endowment Fund. No part of the principal of the Endowment Fund, including appreciated value of investments, may be expended without the approval of the membership at an annual or special congregational meeting.

With the concurrence of the Committee, the Board of Trustees shall have authority to allocate non-reinvested interest and dividend income from the Endowment Fund to the general operating fund and other funds of the church if such allocation is determined to be consistent with the preservation and long-term growth of the value of the Endowment Fund. The Committee shall recommend to the Board of Trustees in January each year the amount of non-reinvested interest and dividend income, if any, that can be allocated to the general operating fund or other church funds during the next fiscal year consistent with these guidelines.

Gifts and Bequests

Acceptance and disposition of gifts and bequests is governed by the separate Gift Acceptance and Disposition Policy. Gifts and bequests designated to go to the Endowment Fund shall become part of the principal of the Endowment Fund.