Investment Managers Take Extra Care in Handling Funds of Religious Organizations

Article excerpt

When it's a matter of balancing fiduciary responsibilities against profitable "sin stocks," there really is no question - at least when the portfolio is for a church or religious organization, investment managers said.

"For example, is there an opposition to investing in firms that sell or manufacture alcohol - firearms or tobacco?" said John Taylor, a client adviser with JP Morgan Chase & Co. in Oklahoma City. "There's lots of ways to think through that for someone who's trying to make socially responsible investments."

Ken Bonds, with Wells Nelson & Associates in Oklahoma City, agreed: "The role of a fiduciary is a very high calling. You realize that this is not your money, and the first obligation you have is to treat it as their money and to invest it according to their needs and desires," said Bonds, who represents Mayflower Congregational Church.

Although one might assume all the funds a religious group collects go immediately to finance social programs supported by the congregation, as an entity the temple or church has to look to its own future as well.

For instance, David Hunt, chairman of trustees for Mayflower, said his church holds about 20 percent of its total assets in reserve.

"Because we do have six-figure expenses come up," Hunt said, pointing to unexpected parking lot and steeple repairs as examples. "Those funds are really used for a rainy day; there's no profit motive to it. We try to put it in investments that will keep the money ahead and allow us to do smaller capital things with the earnings. - When we can't, at least we know we have reserve funds to keep us from getting in trouble."

A church such as Mayflower's financial goals of long-term solvency and annual programs affects the investments picked for the client, Bonds said. …