What happens after the gift is given?

There is often a story behind the assets held in a church endowment.

Maybe a couple faithfully tithed to the same church for 40 years and included it in their estate plan. Maybe a family gave in memory of someone they loved. Maybe a church member felt called to give more than was comfortable because they believed deeply in the ministry and wanted to see it continue long after they were gone.

Those gifts represent more than dollars on a balance sheet. They represent sacrifice, generosity, and, in many cases, a decision made in faith.

Once the gift is given, though, the responsibility changes hands.

The person who gave it has done what they felt called to do. The church then has an opportunity of its own: to faithfully steward what has been entrusted to it.

Entrusted, not simply received

I recently heard about a church whose finance committee was reviewing its endowment. Over many years, families had faithfully given, members had remembered the church in their estate plans, and generations of people had contributed to something they hoped would continue supporting ministry well into the future. It grew to a sizable amount.

As the committee reviewed the portfolio with its financial advisor, they found that nearly the entire endowment was invested in certificates of deposit (CDs).

There is nothing inherently wrong with that. CDs can play an important role for churches, particularly for operating reserves, upcoming projects, or assets that need to be protected and readily available. For those purposes, preservation and liquidity may be exactly what good stewardship calls for.

Long-term endowment assets can present a broader opportunity. When resources are intended to support ministry not just today, but potentially for generations, stewardship can include protecting what has been given, seeking appropriate growth, and being thoughtful about what those assets support while they are invested.

A lesson in stewardship

Jesus’ Parable of the Talents in Matthew 25 is often referenced in conversations about faith and investing. While it isn’t an investment lesson, it is a powerful story about being entrusted with something that belongs to another.

Before leaving on a journey, a man entrusts his property to three people in his household, giving each something to care for while he is away. The emphasis is not simply on what they received, but on what they did with what had been placed in their care.

Two put those resources to work. When the man returned, he praised their faithfulness over fear:

“…You have been faithful over a little; I will set you over much.” (Matthew 25:21, ESV)

That idea of being entrusted with something feels particularly meaningful when we think about church endowments.

An endowment doesn’t exist simply for the sake of having an endowment. Those assets were given for a purpose: to support ministry, serve people, sustain the work of the church, and potentially extend that work into generations the original donors may never see.

Faithful stewardship includes caring for those resources prudently. For long-term assets, it may also include seeking to grow what has been entrusted so that the generosity of one generation has the opportunity to support ministry in the next.

Expanding the idea of faithful stewardship

Growth is only one part of that opportunity.

Money doesn’t stop having an impact simply because it has been placed in an endowment. A church’s assets continue participating in the broader economy while they are invested.

A CD, for example, is not money sitting on the sidelines. Deposits provide banks with capital that can support lending to individuals and businesses. Likewise, investing in the public markets means owning portions of businesses that employ people, develop products and services, and influence communities around the world.

In both cases, the church’s assets are being put to work beyond the walls of the church.

What is Biblically Responsible Investing?

Biblically Responsible Investing (BRI) offers churches another way to think about that participation. In addition to considering return, risk, liquidity, and time horizon, BRI incorporates consideration of whether the investments held within a portfolio align with biblical values.

For a church committee entrusted with the generosity of others, that can add another dimension to stewardship: greater intentionality around not only how the assets are managed, but also where they are invested.

Continuing the story of the gift

That is where I see an opportunity for faith-based investing within church endowments.

It isn’t a replacement for CDs, nor does it mean every dollar a church holds belongs in the public markets. Churches have different needs, and CDs may be an appropriate choice for reserves, near-term spending needs, or other assets where preservation and liquidity are priorities. Public-market investments involve risk and can rise or fall in value.

For appropriate long-term assets, however, faith-based investing can offer another way to approach stewardship.

Frontier’s Faith-Based Strategies combine a Biblically Responsible Investing process with disciplined portfolio construction and downside risk management. The strategies are designed for investors seeking to pursue their long-term financial objectives while also being intentional about the values reflected in the companies they own.

Think again about the person who originally gave.

They worked for those dollars. They could have used them elsewhere. Instead, they chose to entrust some portion of what they had been given to their church because they believed it could accomplish something meaningful.

Their act of stewardship doesn’t have to be the end of the story. It can be the beginning of the church’s.

Through thoughtful management, a gift made today has the opportunity to support ministry well into the future. And through faith-based investing, churches can also consider how those assets are participating in the world while they are invested.

For some assets, faithful stewardship may mean the security and liquidity of a CD. For others, particularly those intended to serve the church for generations, it may include thoughtfully pursuing growth and greater alignment with the church’s values.

There is no single investment approach that is right for every church. A financial advisor can help a church board or finance committee evaluate its risk tolerance, liquidity needs, time horizon, and long-term goals, and determine an appropriate approach for the different assets entrusted to its care.

If your church hasn’t had that conversation recently, consider sitting down with your financial advisor to review how your endowment is positioned and whether its investment approach continues to reflect the church’s needs, risk tolerance, and values.

Faithful stewardship doesn’t end when the offering is received.

In many ways, that’s where it begins.