The first proposal comes in the form of advice from the Advisory Committee on the Constitution (ACC). After the GAC and foundation together sought and received policy advice from the Stated Clerk regarding the allocation of funds – advice agreed to by all the parties – the GAC director, Linda Valentine, asked the ACC to confirm and clarify that advice. The ACC did more than that. It recommended that this GA declare that the GAC, not the Foundation, should have the final say in settling disputes over the appropriation of donor designated funds.
The General Assembly of 1799 formed the Presbyterian Foundation as a separate corporation for the purpose of managing medium- and long-term major funds contributed to the church for the implementation of its mission. The operative term is “separate corporation,” because the commissioners to that GA determined that those who manage the funds should not be the same persons who actually utilize or benefit from such funds.
The hens ought not to be guarding their own hen house. That calls for the work of a watchdog.
The watchdog task gets complicated when available monies go unutilized due to the difficulty of meeting the original donor’s intent, e.g., providing feed for the horses that pull the fire wagons. Redirecting those funds requires secular court approvals, so the GAC and foundation together have proposed such changes dozens of times before. However, the standard of the court for making such changes is that the donors’ specified terms are “illegal, impossible, or impracticable,” and on occasion the foundation has disagreed with GAC’s assessment of such difficulties. This is where the new proposal from the ACC comes into play.
That proposal asks the GA to declare that when the two entities disagree on the allocation of funds, the “General Assembly or its designee make the final determination.” Then it asks the GA to “Designate the General Assembly Council to make the ‘final determination’ on its behalf in the interim between meetings of the General Assembly.”
In other words, as Steve A. “Sam” Martin, former board chair of the Foundation has told the Outlook, “This will overturn the judgment of the Assembly of 1799, when it created the Presbyterian Foundation, declaring that those who manage the monies in trust for the church need to be independent of those who use the proceeds of that trust.” He added that the separation between the mission agency and the fiduciary agency is standard procedure. “Every trust officer in the world would know that.”
The second proposal, directly from the GAC, proposes changing the use of Church Extension Fund 201330 – set up originally by a past General Assembly, and accordingly, can be changed without court approval. At stake: approximately $18 million. It would replace the existing restrictions of “grants for new church development or church extension situations” to “church extension purposes which are defined as loans” for site purchase, construction, etc., and for “ … grants to particular churches and presbyteries for projects associated with organizing new congregations, transforming existing congregations, or developing congregational-based ministries that reflect the [PC(USA)]’s commitment to inclusiveness, diversity, and ecumenicity.” In other words, the monies can be used for any congregation-based programs that aim to extend the church. It then adds, “Salaries of staff at presbyteries and particular churches … [and] … at the General Assembly level … in proportion to such staff’s activities to support church extension programs are considered to be operating expenses payable from the Fund.” The definition becomes broad and wide.
The third proposal, overture #85 from the Synod of the Southwest proposes that part of the 1986 policy and 1996 agreement be vacated by granting the GAC the freedom to choose where it will invest major funds for its use. The synod’s rationale calls for maximum flexibility to maximize investment returns.
What it overlooks is that such a change in investing would entrust the funds into a body not sharing our theological, ecclesiastical, and missional convictions. The investment management firm would not be accountable to the denomination. Who would ensure that the guidelines approved by past GAs in response to the Mission Responsibility Through Investment committee (MRTI) would be followed? Would the new investment management firm partner consult with MRTI to participate in corporate engagements as the foundation currently does?
Should the commissioners approve such radical changes? Will they realize that such changes are radical? Will this all just slip below the radar?
At minimum, the commissioners will want to ask some hard questions. Why should policies in place for 200+ years need to be changed now? How would secular trust officers respond to these changes? How shall we be allocating monies placed in restriction over past years? What funds continue to sit untapped? Are some of those restrictions “illegal, impossible, or impracticable,” or are they just out of sync with the present drift of programming as defined in the GAC or some fixed mindsets of the foundation?
If the commissioners think the GAC and/or the foundation is acting inappropriately, the better side of discretion might suggest that the rules be left in place and, instead, that the disagreeing parties set up better lines of communication and negotiation, and even seek mediation, a path the entities have recently agreed to follow.
— JHH
Editor’s note: This is a revised version of the editorial published in the Outlook magazine of May 26. The print version neglected to state the fact that the foundation and GAC together sought the advice of the Stated Clerk on how best to deploy all funds set aside for mission and ministry; that the advice received there was agreeable to all parties; and that the GAC Executive Director sought an opinion from the ACC to confirm and clarify that advice, not “to seek easier access to our long-term investments.” Also, the print version may leave the impression that the three proposals have arisen as a coordinated effort. They arose separately, and the issues they raise are distinctly different.
