Chapel of the Cross, Chapel Hill, NC

The Endowment Tract covered the current state of the market with a forecast of the next few years for investments. The major concern was the possibility of an inflationary period, which could greatly dampen the market performance. The general view was that the Federal Reserve System had the tools to avoid such an occurrence absent a major calamity such as an energy crisis, terrorist activities, etc. Even given the best scenario, the optimum return on investment was pegged at only 6% on equities and 3% on debt, net of inflation and investment expenses. This indicated that the ability to grow endowments would be greatly moderated during the next few years, given a normal contribution to operating budgets or funds at a four or five percent basis. This is in line with the current Chapel of the Cross policy of limiting the Vanguard investment to a four percent annual contribution and the Diocesean Fund to the current three-year moving average distribution provided by the Diocese.

Of more significance, there was a strong theme during the conference that in order to survive in the future, parishes would need to develop new programs to grow the endowment outside of investment return. The focus was on planned giving and targeted bequests and gifts as the major possibilities. These are areas of active discussion within the Chapel of the Cross and will be instrumental to the future of our parish.

Other major discussions were aimed at the best practice in managing and governing the endowments of the parishes. A number of models were presented and depended on the size of the parish, size of the endowment and how active the diocese was in aggregating funds for its members. We are fortunate to have a highly competent Investment Committee directing a blend of a managed diversified portfolio and a low cost index fund for our major investments.

There is a movement for aligning investment assets with the overall mission of the Church. Although we are not in a position to individually select investment instruments, the new ruling by the Securities and Exchange Commission may allow groups to be more active in pressuring fund managers to vote proxies in a more socially acceptable manner.

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