A few months ago I visited with a church finance committee about stewardship and fund-raising. In the course of conversation, they shared that they had a little less than $350,000 in savings. When I asked how long they had this much money, their reply was around 12 years. Someone had generously given them a gift of $300,000 from their estate, and they said they were a conservative bunch, so kept it in savings and short-term certificates of deposit. That means in 12 years they had gained almost $50,000. That seems like a pretty good deal.

But, here is the thing. First, because inflation was at a higher rate than the interest on their money, they actually lost purchasing power by a few thousand dollars, meaning their $300,000 was worth less in 2021 than it was in 2009. That doesn’t feel very good.

Second, if they had planned to set the money aside for a long time, there would have been better investments. Our Foundation’s multi-asset fund (stocks and bonds) has returned 9.71% over the last decade. Using that average, if they had put their money there, they would now have $912,000. That is a gain of $612,000—more than twice the size of the original gift. That is pretty amazing. Even though there was more risk of losing money in a fund like this, over time there was a better chance of gaining it.

Which is the better stewardship—to preserve or to grow?  That depends. If the church had wanted or needed the money within a year or two of receiving it, they probably should have kept it in something that wouldn’t go down in value. However, if they had a long-term plan, they probably should have kept it in something that goes up more over time.

In the investing world they call these factors “time horizon” and “risk.”  That means how long you are willing to hold it, combined with how much risk you will take that it can go up or down, determines what you do. Folks in this particular church were sad they didn’t think more about that over the last dozen years.

Stewardship of resources is an important matter that can affect both the current and future ministries of your church. The next time your team meets ask yourselves if you are being both prudent and faithful with the money entrusted to you. Your Foundation is here to help you think through questions like these, so feel free to give us a call.

Glenn HowellFor more information about stewardship and the care of money, contact us here or by calling us toll free at 877-391-8811.

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Glenn Howell
Director of Development
United Methodist Foundation of Indiana