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I am concerned about a drop in my church's endowment, what can I do?

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I am concerned about a drop in my church's endowment, what can I do?

I have been concerned about a drop in my church's endowment from $160 million to $90 million over the course of three years. It is now $100 million. The head of the investment committee is a broker. I am a Chartered Financial Analyst, my polite inquiries have not been received well... Have fiduciary boundaries been approached? What can I do?

You do not say whether you are a member of the Board or merely a member of the congregation. If you are a member of the Board, you have a fiduciary duty to assure that the funds are invested wisely and an absolute right to see all information about the investments. Keep asking and see if you can get some help from others on the Board.
If you are merely a member of the congregation, are you a legal member of a nonprofit corporation which runs the church, or is there a church hierarchy which operates independently of the members of the congregation? If you are a legal member of a nonprofit corporation, you probably also have rights to see financial information, but it would be wiser to raise the issue with the Chair of the Board or other members of the Board before pushing a direct demand for all of the information. If you have no legal rights with respect to the information, all you can do is ask whoever is in control.
In any case, you may want to seek allies among other members of the congregation if you do not get satisfactory responses to your personal questions. 
Your questions are legitimate. The investment market was terrible during the years you mention, but it is worth inquiring to see that there was nothing going on other than explainable investment losses or legitimate expenditures from the fund. And it is worth assuring that a responsible committee of the Board (if the church is separately incorporated) is watching the investments on a regular basis and dealing with any conflicts of interest that may arise in dealing with an investment manager.
Monday, May 5, 2014

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