Earn More on your Church’s Investment with TBF Fund Management

By Rev. Bill Gruenewald

Right now, bank money market accounts are providing returns of only 0.25% – 0.5%. That means for every $1,000 your church has invested, you are receiving at best only $5 per year. 

On March 17, 2021, the Federal Reserve announced it’s keeping interest rates steady following its meeting, leaving the federal funds rate at a range of 0 to 0.25 percent. This follows the Fed’s decision to hold rates near zero until the economy has weathered the effects of COVID-19. 

While this is good news for borrowers, it is not good news for savers! So where does the church invest to get more interest on their funds so that it can be used to fund the ministry of the church? The Tennessee Baptist Foundation.

One of the most popular services we offer is the management of funds for churches, associations and institutions of the Tennessee Baptist Convention (TBC) in our Fixed Income Pool. The foundation is typically able to offer greater rates of return than those available through commercial institutions. Assets managed in this way are invested in socially screened, investment-grade securities that include government agency bonds, corporate bonds and corporate preferred stock. These are purchased at par and held to maturity or until they are called. 

These funds are not FDIC insured and do have a slight amount of risk, but the Fixed Pool has provided significantly greater returns than bank money market accounts over the past 10 years. To support our ministry to Tennessee Baptist churches, associations, institutions, and organizations/ministries, the Foundation charges a modest cost-recovery fee of 0.40% annually for this fund management service.

The goal of the Foundation’s asset management service is to earn a good rate of return for the church with minimal risk so that more funds go back into the ministry of the church. (The Foundation does not manage money or investments for individuals except within revocable or charitable trust arrangements.)

Types of funds the Foundation manages include:

• Building Funds – A building fund may be in place a few months to several years before it is needed. During the accumulation phase, we help the church or association earn the best rate of return on its savings. 
• Permanent Funds – Permanent funds include mission funds, reserve funds, and endowment funds. They are dedicated to various ministries and missions of the church, association, or institutions of the TBC. Their purpose is to produce income that can be used according to the policy of the church. Many churches are developing endowments to support missions or provide for the maintenance of facilities in the future. As an example, the Foundation manages the Cooperative Program Endowment Fund of the Tennessee Baptist Mission Board.

If you’d like to explore the possibility of a fund management relationship with the TBF and get a better return on your church’s investment, please contact us. We are ready to partner with you!

Ready to get started?

You can reach us via phone at (615) 371-2029 or fill out this form.

Please note that the advice offered in this article is not intended to be construed as tax, legal or accounting advice. This material has been prepared for general informational purposes only and is not intended to provide, and should not be relied on for, tax, legal or accounting advice for the reader. You should consult your own tax, legal and accounting advisors before engaging in any transaction.