Risk, return, and justice
The Common Endowment Fund pools congregational assets in a fund that reflects UU values.
The congregations are all members of the Unitarian Universalist Common Endowment Fund (UUCEF), a pool of investments that includes not only the UUA’s endowment fund but also the endowments of 237 congregations and the trust funds of 125 congregations. It also includes endowments of some related organizations, such as the UU Urban Ministry.
The fund removes the burden of managing complex financial assets from the shoulders of congregational volunteers, and it pools the assets in a fund that reflects UU values by engaging in socially responsible investing and shareholder advocacy. For example, none of the direct stock holdings are in companies that produce tobacco products or firearms. And the fund buys shares in some companies to try to change corporate behavior, by proposing and supporting resolutions at annual stockholder meetings. That strategy has been very successful in lobbying for workplace rights for transgender people. Recently the fund has been taking positions to try to persuade corporations to address climate change.
One percent of the fund is reserved for community investing, such as microfinance and community loans. The UUA matches congregations’ community investments up to $10,000.
At the beginning of 2013, the fund had $148 million in assets. “Because the money is pooled, we can achieve a degree of diversification that congregations cannot on their own,” said Tim Brennan, the UUA’s treasurer and CFO. During conference calls, participants learn how different parts of the UUCEF are performing. The large size of the fund also allows congregations with small endowments to invest in an array of strategies that would otherwise not be available to them and to pay lower fees because of the high balance. “There is also the day-to-day oversight of the portfolio small investors wouldn’t get,” said Brennan, noting that the fund employs 15 different managers in a range of asset classes.
The fund is not appropriate for every congregation, Brennan notes. They need to be focused on long-term investing, rather than safeguarding cash reserves, he said. “The goal is to have a long-term return to allow a congregation to take regular distributions and not erode principal.”
Carol McMullen, chair of the UUA’s Investment Committee, ran a recent conference call for congregations. She provided a rundown of the fund’s return. And she responded to questions about how the fund screens out companies that do not meet its investment criteria. McMullen, a member of First Parish Church in Weston, Mass., is a volunteer on the committee, whose members are appointed by the UUA Board of Trustees. “The numbers are very strong this quarter,” she said, noting that year-to-date composite earnings as of Nov. 30, 2012, were up 11.1 percent. She also praised the UUA’s financial staff and the investment committee, and their work in helping congregations manage their investments. “They’re working hard to deliver professional oversight and fiduciary responsibility,” she said.
Department Close-up
Office of Financial Services
Mission: In addition to administering the UU Common Endowment Fund, the UUA Office of the Treasurer assists congregations with legacy giving, stewardship, benefits, tax issues, and other financial management services.
Size of Common Endowment Fund (as of January 1, 2013): $148 million
Congregational endowments in the Common Endowment Fund: 237
Congregational trusts in the fund: 125
This article appeared in the Spring 2013 issue of UU World (“Inside the UUA: Risk, Return, and Justice,” page 47). See sidebar for links to related resources.
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