Resolution FIN 057

Resolved, That the Executive Council of The Episcopal Church, meeting in Louisville, Kentucky on January 25-29, 2024 continues to support the work of the Economic Justice Loan Committee (EJLC); and be it further

Resolved, that the Treasurer increase the corpus of the Economic Justice Loan Fund (EJLF) by $500,000 annually in each year 2026 through 2029 from the Society’s operating cash; and be it further

Resolved, that professional underwriting fees to evaluate potential borrowers be paid from the earnings of the ELJC; and be it further

Resolved, that the Treasurer and Chief Legal Officer explore mechanics and structures needed to enable other Episcopal entities to co-invest in the Fund.

The requested $2 million will access funds that have become available as deposits in minority-owned banks matured and the Treasurer encountered increased difficulty in re-investing due to the disappearance of many minority-owned banks (through acquisition and closure.)

In 1998 the Executive Council of the Domestic and Foreign Missionary Society (DFMS) created the Economic Justice Loan Fund (Fund) by establishing its Economic Justice Loan Committee (EJLC) to combine and oversee two prior loan programs that had existed since 1988. Up to $7 million of DFMS assets were approved for investment in socially responsible fixed-income investments through a revolving loan fund.  The loans typically provide credit to institutions and organizations that may not be able to access the regular capital markets, but who have worthy community development goals and projects in lower income and minority communities (e.g., December 2023 loan for $250K to the Northwest Native Development Fund).  Interest earned from these investments is typically below market rates, though an effort is made to achieve rates above the inflation rate in order to safeguard the principal available for future loans. The interest earned in this program flows to the DFMS operating budget.  See the Finance Office website https://www.episcopalchurch.org/finance-office/socially-responsible-investing/ to learn more.

General Convention Resolution 2000-B037 subsequently directed Executive Council to consider increasing the Fund overtime to $24 million.  Resolution 2000-B037 suggested that the increase might come from “dioceses, congregations, and other Episcopal organizations…  additions from the [triennial] budget…the Church Pension Fund…and the Episcopal Church Foundation".

Allocating $2 million from operating cash held in money market investments to the Loan Fund will affect the Society’s income after 2029 by $30,000 annually (comparing current MM rates vs. economic justice loan rates).  This allocation, however, is a small step to responding to Resolution 2000-B037.