LOUISVILLE – The General Assembly Council (GAC) Executive Committee today (April 23) reviewed an overture to the upcoming Presbyterian Church (U.S.A.) 218th General Assembly from the Synod of the Southwest that would allow GAC funds to be invested through vehicles other than the Presbyterian Church (U.S.A.) Foundation.

The overture recommends that previous Assembly actions on how funds are invested be amended to include medium-term and long-term investments through investment brokers or banks, not just the denomination’s foundation.

“The purpose of this overture is to give GAC … the right and the opportunity to invest its funds where it chooses, while continuing to apply the GA [social responsibility] directives,” the Rev. Jan DeVries, synod executive and stated clerk of the Synod of the Southwest, told the GAC executive committee during its meeting here.

Robert E. Leech, president and chief executive officer of the Foundation, told the executive committee the overture “was a surprise to us. We were kind of blindsided.”

“We have process concerns,” he said, noting that neither the synod nor GAC has previously come to the Foundation asking to discuss the matter.

Later in the day, GAC Chief Financial Officer Joey Bailey praised the foundation for appropriating nearly $2 million in “available but previously unused funds” to help undergird the 2009 and 2010 General Assembly mission budgets.

Currently the GAC must use the Presbyterian Foundation for all of its medium- and long-term investments. DeVries said the GAC has about $445 million invested through the Foundation, which abides by GA guidelines including those for socially responsible investing.

“This overture is not intended to be an attack on the Presbyterian Foundation,” said DeVries, whose synod includes de Cristo, Grand Canyon, Santa Fe and Sierra Blanca presbyteries. The purpose “is really to maximize the money that is available to the GAC to do the mission of the whole church.”

Among other things, the overture contends that a number of synods “have adjusted their investments” with the Foundation “in order to gain a higher return on mission dollars,” while also maintaining the GA’s guidelines for socially responsible investing.

“The return on mission dollars invested with the Presbyterian Church (U.S.A.) Foundation has been significantly less than earnings through other investment brokers or banks,” the overture asserts.

The overture also asserts that no other agency of the General Assembly is required to use the Foundation for its investments.

The GAC executive committee agreed to have its stewardship committee, which is meeting as part of the larger GAC meeting April 23-25, review the matter on April 24 and report back to the full GAC.

Leech said only three of the denomination’s 16 synods invest their money apart from the Foundation and that the majority of all presbyteries invest through the Foundation, “as do many, many churches.”

He said the Foundation has an internal investment staff which picks outside investment managers, and that the GAC does not have professional investment staff.

The GAC would “replicate” what the Foundation already does, Leech said. “We have implementation concerns. … We (the Foundation) bring soundness and safety to the process.”

Leech acknowledged that the loss of GAC business would “cost the Foundation money,” and said achieving the best investment performance at the lowest cost has never been the primary goal for GAC funds.

“The Assembly provides a number of directives to the Foundation,” including that the companies it invests in have adequate gender and racial-ethnic representation, he said. “We are concerned about the example to the church that this overture brings.”

DeVries said the synod may agree to support referral of the overture if the following conditions are included in the referral:

• Identify a single portfolio manager at the Foundation for the GAC’s funds;
• Develop strategies for increasing the GAC’s return on investments, using GA directives;
• Address the frequency and content of the reports to the GAC on the percentage return on investments on a monthly basis; and
• Report back to the 219th GA (2010), the full GAC, the Foundation board and the Synod of the Southwest.