“Methodists Helping Methodists” has been our motto at The Virginia United Methodist Development Company, because it embraces helping and supporting one another to advance the work of Christ by investing our connectional church of that mission to make a real impact in the mission/vision of your church and its ministry outreach to your communities. We look to consult with church leaders about investments, loans and stewardship.
Our consulting approach is designed to help church leaders come to grips with WHY they should consider investing funds with the Development Company. We offer rates that are generally higher than commercial rates on certificates. Several options are available depending on the liquidity needed for the funds. Click here to check out our current rates!
Faith suggests that our purpose is based on our vision for the future – more than our control of the present. Due to the inflationary pressures and cost of funds, we know that the market requires an annual return of at least 2% to maintain the value of the funds. Checking and savings accounts are currently stuck in negligible returns of less than .25%. Hence, the lack of an investment strategy means that cash is a diminishing value – and the principal is not protected from loss.
Being Missionally Directed
One recent conversation with church leaders revealed that they thought their primary role was protection of principal in the gifts received. Hence, their inclination was to require the invested funds to be FDIC insured – protected by the government, as a diminished risk. However, their decision appeared to be more based in fear of loss and/or loss of control than in missional purpose.
People sometimes ask, ‘Why should I invest in the Development Company – even though it is not FDIC insured?’ My response is three-fold.
- Our certificates are used exclusively to fund our loans to United Methodist churches and entities in the Virginia Conference for church construction or improvements to assist churches in reaching their communities. Our MISSION is extending the hands of Christ in our town and the next towns – to impact the Commonwealth. The quality of our loan portfolio is excellent, and we have never lost a penny of our depositors’ money. These funds are not available personal loans or credit cards or lines of credit.
- Our loans are fully collateralized with first lien deed of trust on the church properties or with invested, guaranteed funds on deposit. Currently our ‘Loan to Value’ ratio is less than 35%. Loan payments are primarily transferred by EFT (‘electronic funds transfer’), so that no payments have been in arrears nor has any loan required modification.
- Unlike for-profit and other financial institutions, we do not distribute income to shareholders or bonus compensation. As a nonprofit, the proceeds of our efforts are reinvested into the ministries of the Virginia Conferences through our Gifts and Grants Initiatives.
Church Leaders Are Stewards – Fiduciaries!
As such church leaders are managing the assets or resources of another; therefore, they are called to be faithful to the purposes and intentions of the benefactors as they discern the plans for the future. The core of the investment decision then is SPIRITUAL – it is a heart issue, not just a matter of risk/return or safety/security! It is not just a monetary strategy.
Jesus understood that when he told his disciples the ‘Parable of the Three Servants and their Talents’ (Matt. 25:14-30). What was it that differentiated the three servants? To each were given different amounts, according to their ability to manage. Two responded by putting the talents to work and earning double. Most significant, though, one responded out of fear by burying his talent in the ground (vs. 25) because he was more concerned about safety. He was unwilling to risk or invest in a manner that would bring more return. His fear led to judgment and derision when the day of accountability arrived. The other two were able to multiply their investment in a manner that brought praise from the master/owner.
Our human disposition is to be risk averse – protective – based in fear more than faith. Risk/return and safety/security issues may be important concerns today, but they should not be – they cannot be – overriding determinants in this specific situation. As church leaders who give an account to God, our decision must be guided by faith, not by fear.
Allow me to close with a few questions: