Rainy Day Funds Support the Connection

Does your church keep its rainy day savings at a local bank? If so, are they earning an acceptable rate of return? And while they’re providing security for your church against emergencies, are they also supporting the United Methodist Church two towns over?

Through our Stable Value Portfolio, your church’s money could be doing it all. For example: in 2012, a United Methodist Church outside of Tacoma deposited $160,000. Nearly two-thirds of it was used by our staff to continue buying laddered Jumbo CDs, which allow the fund to earn a return substantially higher than typical money market or saving accounts. But what’s unique about this fund is that, a few weeks later, the Foundation used most of the rest of that deposit to make a secured loan to another church just an hour’s drive away across the sound.

The loan came with a good interest rate and no expensive fees. This church across the sound used it to remove their old oil-fired furnaces, update their HVAC system, and make their building more energy-efficient. They’re now saving an estimated 13,000 kilowatt-hours and 1,000 gallons of fuel oil per year!

When this church across the sound pays interest on their loan, that interest gets passed along to the church outside of Tacoma and all of the other congregations that have invested in the Stable Value portfolio.

The Northwest United Methodist Foundation keeps about 5% of this portfolio liquid at all times with additional funds maturing each month, so if any of our account holders have an emergency and need their money back quickly, they can call our offices and we can send them a check within a week, if not sooner. But until that point, their money will earn about 2% per year. (That’s more than most, if not all, liquid funds.) And through secured loans, it will quietly support the ministries of neighboring United Methodist congregations as they grow and flourish.