GA: Foundation and GAC begin new courtship

SAN JOSE – They had to endure some scolding, but the General Assembly Council (GAC) and the Presbyterian Foundation seem to have found a path for resolving future disputes over the disbursement of funds — disagreements that, during the meeting of the 218th General Assembly, slid messily out into public view.

The full assembly adopted the recommendations of the Mission Coordination and Budgets committee. Assembly Moderator Bruce Reyes-Chow will organize a seven-member task force to help mediate any future disputes the agencies are unable to resolve.

Long-simmering disagreements between these two agencies of the Presbyterian Church (U.S.A.) erupted in the final weeks leading up to the General Assembly, after the Advisory Committee on the Constitution (ACC) proposed that the GAC be given final authority to determine how invested funds should be disbursed, if the two agencies cannot agree together.

The Foundation argued that such an action would usurp the authority entrusted to them in 1799, and that it would risk legal action against them in the secular courts. They also warned that would-be investors and generous mission supporters would take their funds elsewhere.

The GAC carries out Presbyterian missions and education work, with an annual budget of about $110 million. The Foundation manages long-term and permanent funds for the denomination as well as for many other individuals, churches, governing bodies and institutions, with holdings of about $2 billion. About $35 million of the GAC budget in 2007 was funded by investment earnings from the Foundation.          

The GA committee reviewed the proposal from the ACC, as outlined by ACC representative John Matta, and heard from board members and staff of both the GAC and the Foundation. They also listened to about a dozen former moderators and other PC(USA) leaders, in a public airing of the differences that went on for hours.

One speaker’s story was particular arresting. Veeda Javaid, executive director of Presbyterian Education Board of Pakistan, brought greetings to the committee from Forman Christian College in Lahore and other schools in her country. She told the committee that “money was given for our school in India, but then we got our independence from India as Pakistan, so the Foundation has not allowed us to have the money to use for our school.”

Then the lawyers started disagreeing.

Javaid’s criticism was echoed by the attorney for the GAC. But an attorney for the Foundation produced an e-mail from July 21, 2007, that acknowledged the difficulty Javaid presented, but offered to go to court to try to seek an easing of the restriction. Sent by Alexander M. Say, a vice-president and counsel for the Foundation to April Davenport, a lawyer with the GAC, the e-mail stated,

“Unfortunately, given the fact that the donor specified specific countries rather than a geographical location, we are bound to spend it in those countries, regardless of the fact that the geographical boundaries may have changed. If you feel that the traditional geographical boundaries should be the area for spending the money, I would be glad to take this to the court if you can provide a basis for the argument and documentation of the prior boundaries and today’s boundaries.

Otherwise, these funds should only be spent in current day India and Egypt. If you need anything further, please let me know.”


Say, the Foundation’s lawyer,  reported that the GAC never responded to that e-mail. No one spoke to give the GAC’s interpretation of what happened

Former General Assembly moderators also weighed in on the subject.

David Dobler, president of Sheldon Jackson College in Alaska, reported how the college cancelled classes this past year due to lack of funds, and how the Foundation added more misery by telling them that the lack of classes and students meant that funds normally given them could no longer be sent.

“I didn’t like that, but it was the right call,” Dobler said. “They were the right people to make that call. To have the integrity of the Foundation is essential. There will inevitably be disagreement over the use of funds, but that is a small price to pay to protect the integrity of the system.”

Former General Assembly moderator Marj Carpenter of Big Spring, Texas, expressed affection for leaders in each organization, but opined, “It feels like we’re fighting over money, and that’s what we’re doing. I’ve been to Pakistan. I’ve been to those schools.  But I want to keep that integrity that when you give to the Foundation, the Foundation disburses it. When you give to the Council, the Council disburses it.”

She concluded prayerfully. “And please God let them get back to talking together so they don’t need to make the whole church sick over it.”

John Buchanan, pastor of Fourth Church in Chicago and editor of The Christian Century, recounted how these issues surfaced at the 1996 GA when he was elected moderator. “At that point the relationships between the GAC and Foundation had disintegrated to the point that people were hardly even talking together.”

Like Carpenter, Buchanan affirmed the directors of both organizations as close friends whom he admires and respects. He appealed to both entities to find a way to work better together and “for both of these valuable and faithful entities to be able to perform to the best of their abilities.”

In order to press its concerns, the Foundation sent a DVD to all the commissioners in advance of the GA, which provoked a half dozen presbytery executives to send a letter scolding them. Sam Roberson, general presbyter and stated clerk of the Presbytery of Charlotte, expressed the exasperation shared by many colleagues when he testified, “Shame on the GAC for the ACC ruling, and shame on the Foundation for the DVD.”

Committee, GA Action

After considerable deliberation, the committee produced a recommendation for the whole assembly to consider; it was later adopted as presented.

It directs the two entities to “covenant to work together in good faith to continue to resolve disputes with respect to the restricted nature of particular funds or other disputes pertaining to intended or planned use and expenditures of restricted funds …”

Given the past difficulty in reaching such resolutions it also directs the formation of a Restricted Funds Resolution Committee (RFRC), comprised of two members appointed from the boards of each entity plus three additional members to be named by Moderator Bruce Reyes-Chow.

It then directs, “The RFRC shall create a process to be used should an issue not be resolved in accordance with the 1996 agreement. The RFRC shall specifically recognize and address the fiduciary responsibilities by which the Foundation and the GAC are required to operate under civil law, and where issues remain disputed, the Foundation and the GAC shall file a cy pres (legal motion) or other equivalent action in the appropriate court.”

It also scolds both entities, saying, “It is essential for the agencies of the Presbyterian Church (U.S.A.) to model Christ-like behavior for the church. Requiring the General Assembly to make broad policy decisions to manage discrete and particular issues is not healthy or appropriate. We instruct both boards to thoroughly explore ways to improve collegiality and require that the staff of both agencies honor the jointly agreed business processes.”

In spite of the scolding, the leadership of both entities welcomed the conclusion and expressed thanks to the committee for helping them break through the impasse.