Would any of you consider investing church savings with the WIF? The accounts are not federally insured, but the interest rate differential between the WIF and our local banks in a demand account is enormous. I was calculating the potential earnings differential and it is $.11/month at the bank at $238/year at the WIF with the same amount of money.
Is the loss of FDIC insurance worth that much in return?
How much is the FDIC coverage worth? Depends on whether or not you need it.
Post Thanks / Like - 0 Thanks, 1 LaughingRoy Richardson - thanks for this funny post
I won't speak against the Wesleyan Investment Foundation, but I will suggest that the Nazarene Foundation is a good option. Our church placed its reserve fund with the Nazarene Foundation more than a year ago. We selected the "growth" option because we don't expect to use the money for at least a year. In the last year, the value of the accout has grown more than 10% (I have not checked the actual rate recently).
A growing number of churches who check out the investment options are deciding to use the Nazarene Foundation.
A couple of years ago, one of the organizations where I served on the board of directors accepted proposals from several different investment firms. After a careful comparison, they found that the "after cost and fees" earnings from the Nazarene Foundation were the best available.
PS: I should disclose that I serve on the board of the Nazarene Foundation -- an unpaid position.
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I don't think FDIC coverage is worth much to most churches, but it something the board needs to consider before making an investment. Over the years, I have worked with a number of church boards. I have observed that most church boards lack the expertise to make wise investment decisions, so they simply go for the safest -- that usually means the lowest return. If a church board lacks the expertise, they should seek the advice from someone in the congregation that does have some expertise.Originally Posted by John Kennedy
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Thanks for the disclosure
We have a savings that we might need to tap - depending on the economy and budget - that I was considering moving to the WIF.
We also have proceeds from a property sale that are in a 3yr CD that are more of what you are describing. That is a good option that I should look into.
Thanks for the info.
Dave, tell them they need to add a definitions primer to their website. I'm instantly lost in all the lingo and don't know what they are talking about without reading through all the material. If they had some kind of primer on the site it would help me go straight to the information I want before I start reading.
Post Thanks / Like - 1 Thanks, 0 LaughingDavid Troxler - "thanks" for this post
You're talking about entering into an Investment Management Agreement with them? I was just browsing their site, and that's the only thing that looks close to what you're talking about.
Maybe that would be a good fit for our building fund. We have just over $32,000 in it now. We tap into it occasionally, but our real hope is to grow it to the point that we can purchase a building of our own in about 3 years. Hmm....
That might work for us as well. We have the proceeds from the sale of a property that we are holding for the purchase/remodel of a permanent home.
Yes. I am talking about an Investment Management Agreement.
Rich,
Did you do this? I'd like to hear about it.
Nope. I forgot about it until you asked.
Let me know if you are pursuing it.Nope. I forgot about it until you asked.
It's not always expertise that is the issue. I know that most of the people on my church board are simply risk averse when dealing with the church's funds. When considering where to place funds, several members were concerned about the potential to lose money that people had donated to the church.
After a lengthy conversation we decided to put $100,000 with the WIF. One of the reasons is because we'll be building soon, and so it's a relatively short term placement and we'll probably be seeking a loan from the WIF. We like the idea of giving money to them, as the only thing they invest in is churches, so until we can use the money for local ministry, at least it is helping other churches.
We'd definitely consider putting money with the Nazarene Foundation if it were going to be more long term.
Last edited by Kevin Rector; October 5th, 2012 at 10:16 AM. Reason: WIF not WEF
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I think you mean WIF, not WEF. If you put $100,000 into the WEF, you may have a hard time getting it back when it's time to build.
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I'll ditto the Nazarene Foundation. A church I was serving in recent years put our savings into the Foundation at the middle-risk level (I forget the name). We did this about half way through the fiscal year, and by the end of the fiscal year we had already seen growth the equivalent of what was projected as our APY. I'd have to check back with that church to see if the funds are still doing that well, but my guess is that if they saw that much growth in a moderate risk fund, in a year when Warren Buffet's streak finally snapped, they're probably going to be doing OK.
That church also implemented a couple of policies along with the investment, which may be helpful to more risk-averse members. It was agreed that we could only withdraw down to the point of the original investment. So if there was a year when we experienced a loss which put our balance below what we had invested, we would not be taking any money out of that account until it had fully recovered. The other policy was that investment growth would not be a line item in the budget. It would be the responsibility of the church board to review the portfolio on an annual basis, and if there was growth, it could be used for special expenditures outside of the normal budget, or it could be allowed to stay for another year. That way we weren't counting on a specific level of growth to pay the bills.
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Correct! I meant WIF.I think you mean WIF, not WEF. If you put $100,000 into the WEF, you may have a hard time getting it back when it's time to build.
For the most part FDIC would ensure funds in the event of a bank or institution failing, correct? Our church operating account has gone from having a balance of $545 in May 2011 to a little over $23,000 today. Would WIF or the Nazarene Foundation have options for us - say if we wanted to invest about $5,000?
Investment accounts are generally not FDIC insured.
http://www.fdic.gov/consumers/consum.../fdiciorn.html
Correct, so really the only option for a church investing in a FDIC insured product would be to look at a money market, CD or savings account type of product?
Correct. Which is why Roy asked at the beginning just how much FDIC coverage is worth to you. You might be giving up a great deal of return for that sense of security.
Correct. I went here to calculate the difference for us. The local bank is offering 0.75% on a 5 year CD. Our principal is $88,000 ish. By my math, we would earn about $675/year at the bank. The WIF would pay $2200+ per year, which is an enormous difference to me.
I'd say it is worth it. Especially with the WIF. From everything i've read, they have a great history of return on investments. They sent me a packet with bulletin inserts asking me to place them in my bulletin. I wasn't comfortable pushing financial products on Sunday mornings.
Yes, the Church of the Nazarene Foundation (CNF) would be happy to open an Investment Management Account with an initial deposit of $5,000. Most of the district and church managed funds are up around 7% this year. One district with a blend of income and growth oriented investments is up 7.79% for 2012. Another district, a little more conservatively invested, has a three year record of 9.47% in 2010, 1.05% in 2011 and is now at 7.08% in 2012. Call me direct at the Foundation, 913-577-2985.
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