The Investment Fund of The Episcopal Church in the Diocese of Northern California is a collective investment fund available to congregations, the Diocese itself and diocesan organizations. The purpose of the Fund is to allow those organizations to take advantage of economies of scale and diversification in an effort to promote greater investment return and efficiency, and to further their charitable objectives.
Among the investments are loans to congregations and diocesan organizations for new construction and major renovations, and to clergy for housing. So not only does the Fund bring professional management to many institutions in the diocese, but also it advances its mission by allowing congregations to grow.
The Fund was established by the Diocese through the actions of the Bishop, the Board of Trustees and the Convention in 2013. It succeeded the Episcopal Church in the Diocese of Northern California Endowment Trust (sometimes known as the Endowment & Memorial Trust) founded in 1975.
The Board of Trustees of the Diocese appoints the Investment Fund Committee, which is responsible for day-to-day operations.
Although this was an important change in structure, those who administer the Fund – the Investment Fund Committee, the investment advisor and the custodian — have not changed.
The Investment Fund Committee does not offer advice regarding planned giving. Those seeking such advice should contact the Episcopal Foundation of Northern California. It works with congregations to enhance their planned giving results. The Investment Fund Committee encourages you to go to the Foundation’s website to obtain more information on planned giving.
The Investment Fund operates as a program of the Diocese under the 501(c)(3) non-profit status of the Diocese. It is governed by the Investment Fund Committee, composed of at least five and no more than eleven members including the Bishop, who are appointed by the Board of Trustees upon the recommendation of the Bishop on an annual basis, with no limitation on the number of annual terms that can be served. View a list of current members.
The Investment Fund Committee receives funds from the Diocese, diocesan organizations and congregations, and invests the money in one or more of three funds according to the wishes of the depositor of the funds. View investment transaction guidelines.
U.S. Bank is the fund custodian and provides investors with monthly statements of activity. The current manager of the funds on behalf of the Investment Fund is HighMark Capital Management. U.S. Bank assesses custodian and advisor fees to follow Section 2.8 of the Investment Policy, which provides that fees and expenses from outside vendors are to be charged pro rata to each investor.
Three funds are invested according to the Investment Policy adopted by the members of the Investment Fund Committee and approved by the Board of Trustees.
The A fund, known as the Balanced Fund has as its primary goal growth of principal and production of income with a moderate risk tolerance.
The B fund, known as the Income Fund is invested predominantly in bond funds and is designed to produce a reasonably reliable flow of income with minimal risk of loss of capital. The time horizon on the bonds is 2-5 years. To provide a hedge against inflation up to 25% may be invested in a low risk equity or balanced fund or low risk alternative investments.
The C fund, known as the Money Market Fund, is invested in money market and short-term bond funds with a time horizon of less than one year. It is designed to provide liquidity with very modest returns.
For more details, view the Investment Policy (Below)
The Investment Fund includes a portfolio of loans to congregations, diocesan organizations and clergy. Loans are predominantly for capital projects pursued by congregations. These loans are made by application of a congregation or other entity and require the approval of the diocesan Project Review Committee, the Investment Fund Committee, and the Standing Committee and are executed upon recommendation of the Bishop.
Here are the Loan Application guidelines. The interest rate is variable and is determined by the Investment Fund Committee on an annual basis. The current interest rate is below. The interest rate is kept as low and as stable as market conditions permit but since the loans represent investments by other congregations in the Diocese the return must be sufficiently high that the Investment Fund Committee can attract investments from congregations in the Diocese. Loans are generally secured by deeds of trust on the property of the borrowing congregations. Find the loan policy below. While the Investment Fund Committee maintains a loan loss reserve, it has never written off a loan.