The Foundation says these restructuring moves grew out of a two-year review and were intended to respond to the desires of its thousands of constituents throughout the church. According to its web site, the Foundation, based in Jeffersonville, Ind., “cultivates, attracts, and manages financial resources” for mission endeavors on behalf of the Presbyterian Church (U.S.A.). The Foundation Group also provides trust and investment management services.
Tom Taylor, the Foundation’s president, said in an interview that the Foundation Group’s constituents — including churches, presbyteries, synods and the General Assembly Mission Council (GAMC), as well as individual investors — “have been wanting better reporting, better resources (and) greater opportunities for enhanced performance” from funds. He estimated the total funds now under management by the Foundation Group at $1.6 billion.
A Foundation news release calls the two investment firms it is hiring “world-class.” Taylor said that, for legal reasons, the firms could not be identified until February.
The Foundation Group is partnering with two firms because it manages at least two kinds of assets — gifts made for charitable or religious purposes and investments in the mutual funds offered by the New Covenant Funds, a number of Presbyterian-related funds that invests according to the guidelines set by the Presbyterian Mission Responsibility Through Investing Committee.
“And we feel we got the best in breed for both for who we are and what our constituents need at this time” Taylor said.
Taylor also said the turn to outside investment management would allow the Foundation to focus on using its expertise to help fund mission, which he called its main service to the church. Prominent among the uses of Foundation funding is support of several mid-councils and the GAMC’s domestic and international missions, he said.
Victor Hymes, a Foundation board member and CEO of Legato Capital Management, is quoted in the news release as saying the two outside firms would “be operating with resources and a scale that is historically unprecedented in the management of these funds to date.”
The release also says the Foundation will continue to oversee funds and make sure they are used as intended.
The Foundation is eliminating seven of its 60-plus staff positions and six of the 11 positions on the board of directors of the New Covenant Trust Co. will be reduced. Taylor said those staff and board positions will no longer be needed because of the investment changes.
“It was not that people (in those positions) were failing to do their jobs,” he said. “It’s that the functions of those positions will be handled in a new way.”
Linda Bryant Valentine, executive director of the General Assembly Mission Council and a foundation board member, is quoted in the news release as calling permanent funds managed by the foundation critical to the council’s mission work.
The Foundation says the restructuring should be complete in mid-2012.
Taylor said the business model the Foundation has chosen — internal oversight of funds coupled with outside funds management — has also been adopted by some Roman Catholic entities as well as other foundations that do charitable or religious work.