Church of England's funds raise questions on church spending
"The Church of England's three hundred year old investment fund is the most highly successful fund of its kind in the U.K for the last decade," say church commissioners, "while the amount available for charitable causes is at a low."
The Church of England fund has been significantly increased by property holdings, especially from houses located in London’s Hyde Park. The church’s fund, which also invests in stocks and bonds as well as property, posted an annual return of ten percent in the last decade compared to 6.4 percent in three hundred other similarly managed funds, the Church of England said in a statement.
Due to the success of the fund, questions have been raised as to the Church of England’s spending. Last year, the total amount available for charitable spending equalled £106 million pounds, the lowest in eleven years. Plans to divert £5.5 million from Church of England cathedrals and bishops into mission work were rejected by General Synod in February following news of the success of the fund.
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After a series of attacks by senior clergymen, these ideas have been postponed. First church estates commissioner Andreas Whittam Smith said “These results show the long term benefits of investing in a wide range of asset classes. The property holdings have been a big contributor to this result”.
Last year, the fund posted a return of seventeen percent which was used to pay the salaries and pensions of approximately 16,000 people that work for the church of England. The fund spent a record one hundred million pounds on pensions, and fifty million pounds on salaries and other costs for bishops, clergy and staff.
In the last five years, the fund's average annual return was 5.2 percent, making it the most successful fund in that period say church commissioners’ spokesman Arun Kataria. The commissioners also said that in 2003, the churches commercial property investments returned 7.7 percent, 22 percent for farmland, and a further 11 percent for residential property. The commercial properties consist of offices, factories and shops in England and Scotland.
According to the fund’s balance sheet, the value of property assets was the highest in a decade at 1.14 billion pounds. In the late 1980’s, it’s real estate investments fell in value by eight hundred million pounds and helped cut losses on assets in 2002 to -9.3 percent.
According to their website, the commissioners aim for an investment return of five percent or more after inflation to cover their spending plans. However, the fund has the policy not to invest in companies involved in weapons or pornography or companies whose primary business involves gambling, tobacco, alcohol and newspapers even though investments have been made in companies that produce weapons on the basis that this is a small part of their overall business.
Ever since King Henry VIII broke away from Roman Catholicism in the sixteenth century, church commissioners have been investing the wealth which has accrued, and have now become some of the biggest landowners in England.
