Churches and religious organizations often have unique needs when it comes to managing finances and making investments. As stewards of donor funds, churches must be prudent and ensure money is used responsibly to further the mission. Here are 5 smart investment ideas for churches to consider when looking to grow reserves or generate additional income.
Invest in church expansion or facility updates using a building fund
As congregations grow and needs evolve, churches may need to expand facilities or update aging infrastructure. A dedicated building fund allows churches to save and invest for large capital projects. Members can donate knowing gifts will support a specific future need. Churches can invest building fund assets conservatively in fixed income securities to earn interest while preserving principal.
Open a socially responsible investment account
Many churches want investments aligned with their values. Socially responsible investing excludes companies involved with industries like tobacco, alcohol, weapons, gambling and fossil fuels. Churches can open SRI accounts with investment firms or community foundations to screen out objectionable companies. Investing this way allows churches to ‘do good’ with money even when sitting idle.
Invest in church community development initiatives
Churches seeking local impact can invest directly in housing, jobs, education, and health initiatives to improve their communities. Projects like affordable housing, small business incubators, job training programs, and community clinics allow churches to invest in line with their service mission.
Partner with faith-based investment pools
Religious investment funds pool assets to make diversified impact investments on behalf of their faith partners. Options like the Christian Investment Forum and Catholic Investment Services allow churches to invest in ways aligned with faith and values. Pools access deals individual churches may not qualify for alone.
Work with religious investment advisors
Specialized financial advisors help faith groups navigate investing consistent with beliefs and requirements. Advisors structure portfolios, recommend investments, handle paperwork and reporting. They help churches avoid prohibited transactions while maximizing income. Advisors bring expertise so church leaders can focus on ministry.
Churches have unique needs and restrictions when investing money. Following ethical guidelines, partnering with specialized advisors, and focusing funds on ministry can help churches make the most of investment assets.