Post: Foundation Can Help Grow Church Funds

Old clapboard white rural church in Willamette Valley, Oregon, Oak Grove
Moreover it is required in stewards, that a man be found faithful. 1 Corinthians 4:2 (KJV) Over the past few years,  I have received many calls from churches asking if there is any way to earn more interest on the money they have in their bank in savings accounts or endowment accounts.  Most of these churches  are saving money for building programs, mission endeavors, scholarships for students, or “rainy day” funds.  Interest rates at financial institutions have been very modest for several years and will probably remain low for the foreseeable future.  Churches are finding the amount they earn on these funds is not able to adequately grow the fund so that ministry can continue to  happen. So what can churches do? Is there another avenue to grow funds at a greater rate? One of the wonderful services that the Foundation offers is the management of funds for churches, associations and institutions of the Tennessee Baptist Convention.  Many churches and associations have taken advantage of this service. The Foundation currently manages funds for 134 churches/associations totaling over $22 million dollars. The types of funds that are under fund management are building funds, reserve funds, and mission funds. These are funds that churches typically put in a certificate of deposit (CDs) or money market accounts at a bank and are not part of the day to day operations of the church.  These are funds that could be needed but are set aside to grow additional income. The Foundation has been able to pool these types of funds and offer a greater return than financial institutions. While these funds are not FDIC insured, the Foundation maintains a large reserve fund to underwrite our pool of managed funds  for the rare instance when one of the underlying securities might fail. These funds are invested in investment grade fixed income securities such as corporate bonds and corporate preferred stock. The Foundation charges a modest fee of .0025 (.25 of 1%) annually for this service. This is lower than most financial institutions charge for similar services. Additionally, the fees collected go to help support the Foundation’s ongoing ministry to Tennessee Baptist churches, associations and institutions. Since 2011, the net return on this pool of funds has averaged between 4 – 5%. And setting up a fund management agreement is easy! Once you decide that you would like the Foundation to manage a fund,  all you have to do is complete a fund management agreement  and have it signed by the designated officers of the church or association. Then, send in the completed agreement and a check for the funds that are to be managed. Once the Foundation receives your money, the fund is set up. At any time, you can send additional money to be added to this fund. You can also make withdrawals by completing a Request for Distribution form and sending it to the Foundation.  Though by the terms of the fund management agreement, you must give a thirty (30) day notice for a withdrawal, we are usually able to have your requested funds to you within a few business days. So start getting more from your money to be used in ministry and let the Foundation manage funds for your organization today!  You can obtain more information on Fund Management along with a sample  of our Fund Management Agreement and Request for Distribution Form  by clicking on “Fund Management” on our website  If you have questions or want more information, just call us at 800-552-4644. We welcome the opportunity to come and meet with your church to discuss this opportunity and are ready to partner with you in ministry as we strive to be “faithful stewards.”

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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.