Friday, 15 May 2015

Church Commissioners' results 2014 - and the task groups

Updated

The Church Commissioners have released their Annual Report for 2014 today. There is also a press release, highlighting a “total return on investments at 14.4% in 2014”, and this is copied below the fold.

The report includes an overview from Andreas Whittam Smith, the First Church Estates Commissioner, which includes the following paragraphs on the Archbishops’ Task Groups.

LOOKING AHEAD

By coincidence, one of the factors that contributed to the Church Commissioners’ difficulties in the late 1980s and early 1990s has been the subject of lively discussion in recent months. I refer to the principle of inter-generational equity, which means that the Commissioners, advised by their actuaries, should only distribute such sums to their beneficiaries as will enable the value of the endowment to be maintained in real terms through time. This policy has been followed rigidly for more than 20 years.

Now Task Groups, set up by the Archbishops, have made ambitious proposals to equip the Church for the future. The Church Commissioners strongly welcome these initiatives. However, financing such plans would likely require the Commissioners to provide additional funds over and above their normal distributions.

The arguments in favour and against such a course were fully explored in a paper presented to General Synod in February 2015. A distinction was drawn between ‘bad’ over-distribution and ‘good’ over-distribution. The good version, which is now envisaged, is undertaken for a clear purpose, in response to plans that are evidence based, is fully costed and is entered into with the agreement and understanding of all parties and there are safeguards in place. It should be seen as an investment in the church to encourage growth. In addition a successful outcome would have, as a by-product, an increase in the Church’s financial strength.

Accordingly at General Synod in February, I moved a motion that invited members to ‘support the Commissioners’ in releasing additional funds to support changes to ‘equip the Church of England more effectively for sustainable mission’. Large majorities approved the motion…

The paper referred to is GS 1981 Church Commissioners’ Funds and Inter-Generational Equity, and the motion carried by Synod was:

‘That this Synod,

welcoming GS 1981; and

noting that the funds of the Church Commissioners are a permanent endowment, held in perpetuity to support the Church of England as it seeks to proclaim the faith afresh in each generation,

support the Commissioners, in consultation with the House of Bishops and the Archbishops’ Council, giving consideration to the basis on which they might, for a limited period, release additional funds in order to support changes that will equip the Church of England more effectively for sustainable mission and ministry over the coming generations.’

Barney Thompson has written about the report for The Financial Times: Church of England blessed by property boom.

Update

James Moore Independent Church to splash out on clergy as booming investments pass £6.7bn

Tim Wyatt Church Times Commissioners use shareholder clout to combat excessive pay deals

Church Commissioners announce total return on investments at 14.4% in 2014
15 May 2015

The Church Commissioners for England have announced their 2014 financial results with the publication of their annual report.

The Church Commissioners’ total return on its investment in 2014 was 14.4 per cent. The Commissioners exceeded their long-term target rate of RPI + 5 percentage points. Over the past 30 years the fund has achieved an average return of 9.8% per annum. After taking account of expenditure the fund has grown from £2.4bn at the start of 1995 to £6.7billion at the end of 2014.

In 2014 the charitable expenditure of the Commissioners was almost £215 million accounting for 16% of the Church’s overall mission and ministry costs. Independent research carried out at the end of 2014 suggested the Commissioners were one of the largest charitable givers in the UK and the eighth largest globally.* Commissioner funded projects ranged from clubs and drop-ins to youth work and food bank hubs, all supported by local churches.

The Commissioners expended £123 million in supporting pensions for retired clergy.

Andrew Brown, Secretary of the Church Commissioners, said: “Through continued strong ethical and sustainable financial performance we help provide for the spiritual and numerical growth of the Church of England. We continue to identify and help fund the Church’s work and mission in communities throughout England.”

Examples of funding provided in the report include:

  • Supporting ministry costs in dioceses with fewer resources
  • Providing funds to support strategic mission activities like:

Supporting “Sensing Salvation” in Ely which works with two non-church schools running innovative arts projects

Providing funding in Bristol where Rachel Hepburn’s mission work is funded by a grant to act as a community line worker in a new housing development

Funding for the Burnside Youth and Community centre in Langley. A grant supports the work of the Children’s centre activities, running holiday play schemes and providing a safe, stimulating and positive environment judged to be Outstanding by OFSTED

Financial support of fresh expressions of Church such as the Holy Ground service at Exeter Cathedral

Growth and diversification:

Notable performance was delivered in property, private credit and timber. The property markets in which the Commissioners are invested were strong across the board and totalled just under £2bn at the end of 2014 with an average return of 27%, predominantly from capital growth, including realised gains on sales.

The private credit portfolio which started in 2012 saw two new commitments in 2014 totalling £51million. In total these strategies generated a combined return of 10.2% in 2014.

The Church Commissioners, with the recent purchase of forests in Scotland and Wales, also became the largest private owner of forestry in the UK. The timberland and forestry portfolio delivered a total return of 22.3% in 2014.

Responsible investment:

The Church Commissioners’ ambition is to be at the forefront of responsible investment practice. In 2014 the Commissioners appointed Edward Mason as Head of Responsible Investment, underscoring their commitment to the UN Principles of Responsible Investment. The Church Commissioners are actively integrating environmental, social and governance (ESG) issues into investment analysis and decision-making.

The Church Commissioners have just won the Best implementation of Responsible Investment category at the Portfolio Institutional Awards 2015 where they were praised for strategic engagement with companies, their record on sustainability and the integration of ESG into investment decision-making.

Notes to Editors:

The annual report can be accessed in full here.

The Church Commissioners have also published a 2014 Annual Review, sharing stories of support across the country for the Church of England’s mission and ministry. Case studies include funding for mission in new housing and other development areas, parish ministry and mission, and supporting major growth and change projects in Dioceses.
The annual review is available here.

The responsible investment review can be viewed at here.

Two films accompanying the release of the annual report - including an interview with Andrew Brown - can be viewed here and here.

In 2014 the Church Commissioners funded 28 projects from the £2.9m funding for developing Church growth in deprived areas. Sensing Salvation is one such example of an innovative arts project. In this blog the Revd Paul West talks about this innovative art project in the Ely diocese.

Further examples of funding provided by the Commissioners can be found in the Resourcing Mission Bulletins.

*City AM World Charity Index named the Church Commissioners as the eighth largest charitable donor globally and the second largest in the UK after the Wellcome Trust.

Posted by Peter Owen on Friday, 15 May 2015 at 11:00am BST | TrackBack
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Categorised as: Church of England
Comments

The Risk Analysis on page 31 is new and includes "Loss of Church or societal confidence in the Commissioners' ethical investment policy" as a major inherent risk.

Posted by: Mark Bennet on Monday, 18 May 2015 at 8:47am BST

I have to attend a meeting at the end of this month that requires that our Benefice provides an increased amount of money towards the Common Fund of the Diocese. The reason for the need to increase contribution levels is so that the decline in the amount contributed by the Church Commisioners can be absorbed. The Church Commissioners contribute 15% as opposed to the 85% contributed by worshippers.
It seems to me that money in the form of investment income is being used for other purposes but what?

Posted by: Kim Baish on Monday, 16 May 2016 at 10:57am BST
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