Financial Administration
>> Investment of Church Funds

Investment of Church Funds

• Trustees of Church funds
• Investment of Church Trust Property Ordinance 1990
• Wardens and parish councils etc as trustees
• Diocesan organisations as trustees
• Restrictions on loans to schools

Trustees of church funds may only invest those funds in an "authorised investment". The word "trustees" includes any person, persons or organisation holding church trust property and covers wardens, parochial organisations and boards, councils and committees established by resolution or ordinance of the Synod or its Standing Committee. An authorised investment is an investment authorised by the Investment of Church Trust Property Ordinance 1990.

Trustees must ensure that church funds are only invested in authorised investments. If church funds are otherwise invested, the trustees may be personally liable for any loss which results.

What is an authorised investment for a trustee under the Investment of Church Trust Property Ordinance 1990 depends on whether the trustee is a person, an organisation or a diocesan corporation.

Wardens and parish councils etc as trustees

Wardens, parish councils, parochial organisations and other persons who are the trustees of parish or church funds may only invest those funds in investments authorised by the trust instrument (if any) which specifies the trusts on which those funds are held, or in one or more of the following investments -

(a)   deposit with Glebe Administration Board;

(b)   debentures issued by Glebe Administration Board;

(c)   deposit with any authorised deposit taking institution;

(d)   any public funds or Government stock or Government securities of the Commonwealth of Australia or any State;

(e)   any debentures or securities guaranteed by the Commonwealth or a State Government;

(f)   a deposit with a dealer in the short term money market being a dealer approved by the Reserve Bank as an authorised dealer with established lines of credit to that bank as a lender of last resort;

(g)   the acquisition of any bill of exchange which -

(i)   at the time of acquisition has a maturity date of not more than 200 days; and

(ii)  if purchased for value confers on the holder a right of recourse against a bank as the acceptor or endorser of the bill for an amount equal to the face value of the bill;

(h)   certificates of deposit issued by an authorised deposit taking institution;

(i)   units in any managed investment scheme -

(i)   which is registered under the Corporations Act 2001, and

(ii)  for which there is a disclosure document lodged with the Australian Securities and Investments Commission under the Corporations Act 2001, and

(iii)  for which the responsible entity is an authorised deposit-taking institution or a related body corporate of an authorised deposit-taking institution,

except where the scheme conducts as its main business or one of its main businesses a business which the Synod or the Standing Committee has by resolution declared to be a disapproved business or the scheme mainly invests in the securities of a corporation or scheme which conducts such a business as its main business or one of its main businesses.

Note:   On 25 September 2006 the Standing Committee declared the following businesses to be disapproved businesses for the purposes of clause 5(j) -

(a)   the manufacture, promotion, distribution or sale of armaments,

(b)   a business which is illegal or immoral,

(c)   the manufacture, promotion, distribution or sale of tobacco,

(d)   the business of gambling or betting or directly connected therewith,

(e)   the manufacture, promotion, distribution or sale of liquor,

(f)    production, sale or distribution of 'X' or 'R' rated video or digital images, videos or films.

Diocesan organisations as trustees

Diocesan organisations have power to invest in those investments referred to in (a) to (j) above. In addition, if one or more of an organisation's members are elected or appointed by the Synod or the organisation is a corporation which holds church funds, the organisation may lend those funds on the security of a first registered mortgage over land in New South Wales if -

(a)   the term of the loan does not exceed 20 years; and

(b)   the amount of the loan does not exceed 70% of the value of the mortgaged land when the loan was made.

Some diocesan organisations have power to invest in shares or debentures in a company. As a general policy, the Standing Committee has directed that no investment shall be made by way of the purchase of or subscription for shares or debentures (or the like) or on deposit with or loaned to any company whose main business or one of whose main businesses is -

(a)   the manufacture, sale or distribution of liquor, tobacco or gambling devices; or

(b)   the manufacture, sale or distribution of armaments except where in the opinion of the Standing Committee there is a state of emergency.

Restrictions on Loans to Schools

The Synod, by resolution 18/76, has directed that the Standing Committee and the Finance and Loans Board not make financial assistance available to church schools or other bodies over whose finances the Diocese cannot exercise control, except insofar as it may be expedient to provide an indemnity to persons accepting responsibility for the management of a church school, or in so far as the assistance may be provided under a variation of trusts ordinance.

Current as at 21 March 2011

If you have any questions about the Investment of Church Funds please email us at infosec@sydney.anglican.asn.au

The contents of this document are for general information only. No person should rely on the contents of this document without first obtaining advice from a qualified professional person. Neither the Anglican Church Diocese of Sydney nor any organisation thereof is responsible for the results of any action taken on the basis of the contents of this document, nor for any error in or omission from this document.

BACK TO TOP