Finance and Investments Report

Finance and Investments Report

New Endowment Funds

In 2015 we received two memorial bequests: one gift of $5,000 in memory of Eleanor Hopkins and one gift of $200 in memory of Stirling Schwiebert.

We also continued to receive income from the William C. Kirk Trust Fund, held by Mellon Bank, which is contributed directly to our operating budget.  The total income from the Kirk Trust in 2015 was $1,430.  We also received $590 in dividend income from 200 shares of Johnson & Johnson stock owned directly by the church.  Like the Kirk Trust, this income is contributed directly to the operating budget.  These memorial gifts and other income are extremely valuable in supporting the essential programs of the church year after year, and they are much appreciated.

Invested Endowment Funds

The stock and bond markets were essentially unchanged in 2015, with the S&P 500 rising 1.2% (including dividends) for the year.  An aggregate U.S bond index published by Barclays declined 1.8% for the year.  A hypothetical index investing 60% in the stock market and 40% in the bond market would have resulted in an approximately zero return in 2015.  The endowment had a small loss of 1.25% in 2015.  The total value of our endowment (excluding the Kirk Trust and the 200 shares of JNJ stock) at the end of 2015 was $1,255,225.  This is down 4.2% from $1,310,394 at the end of 2014.   This includes withdrawals from the endowment of $44,000 in 2015 for program support. This income from the endowment is contributed directly to our operating budget and helps to fund all of the programs of our church.

Our investment policy guidelines dictate that we take out of our endowment no more than 3 to 5% of the average value of the endowment over the prior five years measured each year on Dec 31.  This policy helps to ensure that our endowment will continue to help fund the programs of the church for many years to come.  Our average value from the end of 2011 through the end of 2015 is   $1,173,040.  The proposed budget includes withdrawals from our endowment of $44,000 or 3.75% which is slightly below the midpoint of the range recommended in the endowment guidelines.

Liabilities

The Congregation embarked on a “Refinancing in Faith” program during the first half of 2010 in order to repay a prior loan from Citizen’s Bank.   At the time, the Citizen’s Bank loan had a balance of $74,230 (the original bank loan was $80,000) and required the Congregation to pay approximately $5,500 in interest each year.   These Refinancing in Faith loans were for three years and matured in 2013.   A total of $31,750 was repaid to members of the Congregation in May of 2013.  The difference was very generously converted into gifts to the church by members.  In order to repay these loans on time, the Congregation borrowed the funds from the endowment.  This loan from the endowment was fully repaid in 2015—including interest—as part of the capital campaign.

The Congregation also borrowed an additional $15,870 from the endowment in 2011 to help pay for a replacement of the cooling tower.  The repair and loan were approved at a special congregational meeting held in June 2011.  This loan was also repaid with interest in 2015 as part of the capital campaign.

Respectfully Submitted,

Daniel C. Bigelow, Endowment Manager