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Cash Management Services
Church, School, Agency Fund Management Accounts
There are times when a Lutheran congregation, school, or agency is looking for an outside institution to manage a particular sum of money on its behalf. Some reasons to do so may be:
- The congregation leadership may prefer not to manage the money.
- The congregation may be currently investing the money in an account producing a low return. As good stewards, the congregation would like to invest these funds in an investment vehicle that would provide a larger return.
- The congregation may simply want a totally revocable account that provides complete access to the principal for future needs or projects.
In these circumstances, the congregation needs two things:
1. Prompt and efficient access to all or part of its money at any time, and
2. Maximum return on its invested dollars given current economic conditions.
The Lutheran Foundation of Texas can assist such congregations through a "Church Fund Management Account" in which the Foundation simply invests and manages the money. It can make both the interest and the principal available to the congregation at any time, in any amount. Further, the account can be closed and the remaining principal returned to the congregation at any time. (The Foundation accepts no legal responsibility for how the congregation spends the money.)
Church Fund Management Accounts can be invested conservatively in the Foundation's Fixed Income Fund which historically has yielded approximately 4-5% annually. If congregations are looking to invest a portion of their account in equities (mutual funds), this can be done through the Foundation's Equity Growth and/or Equity Value Fund. The goal for both of these equity funds is to match or exceed the annual performance of the Standard & Poor's 500 Stock Index. (A 1% management fee is charged by the Foundation for managing a Church Fund Management Account.) Information on the recent performance of all the funds is available by e-mailing LFOT at johnh@lfot.org, or by calling 800-880-3733.
To establish a Church Fund Management Account, a minimum of $5,000 is required along with a short agreement signed and dated by the appropriate representative of the congregation and the executive director of the Foundation. Usually, this type of an account can be put in place in a short period of time.
A sample Church Fund Management Account Agreement can be provided to your church, school or ministry upon request.
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