Investing with a Mission:
Performance Beyond the Numbers
2017 Annual Report
Mission
United Church Funds supports our clients’ missions and generates outstanding values-aligned investment performance. Vision
Investment that creates a just world for all.
Table of Contents
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2017 Highlights President’s Letter
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Investment Commentary
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Investment Performance
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Beyond Fossil Fuel Funds
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Faith-Based Investing
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Planned Giving
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Clients New Clients UCF Welcomes New Chairman and Board Members Board of Directors Staff Selected Financial Information
United Church Funds (UCF) was established in 1909 to administer the Pilgrim Memorial Fund for the benefit of retired pastors and has since evolved into a full-service investment manager with over $825 million in assets under management. For more than 100 years, UCF has been supporting the missions of churches, ministries and faith-based organizations by offering:
– Faith-based investing and endowment solutions – Diversified funds that span the spectrum of risk and return – Competitive performance and attractive fee structures – Non-profit setting, values-aligned and commitment to improving the world
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2017 Highlights
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Performance Balanced funds ranked in the top quartile vs. peer group according to Lipper Analytics.
Planned Giving UCF, in collaboration with the UCC, launched a Planned Giving microsite platform, designed exclusively for UCC churches and ministries.
Green Bonds Green or sustainable bonds comprise 19.5% of the Fixed Income Fund and 20% of the Beyond Fossil Fuels Balanced Fund.
Money & Ministry UCF participated in “Money & Ministry”, a one-day stewardship seminar hosted by the Minnesota Conference UCC at United Theological Seminary.
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Engagement UCF participated in over 30 corporate engagements involving environmental, social and governance issues.
Proxy Voting UCF voted at 705 company (US) annual meetings and 550 company (international) annual meetings in accordance with our socially responsible proxy voting policies.
Modernized Exclusionary Screens UCF modernized its exclusionary screens by rectifying its responsible investment process with “Still Speaking Faith”.
President’s Letter
It has always been our goal to provide stellar service and competitive performance to our clients and to support their respective missions. Therefore, I am pleased to report on another positive year for our clients and partners, and several important initiatives we took on in 2017. Our careful selection and monitoring of fund managers, prudent asset allocation, and long-term perspective, contributed to UCF’s outstanding investment performance in 2017, as evidenced by UCF achieving a peer group ranking (according to Lipper Analytics) of its balanced funds in the top quartile. UCF Modernizes its Exclusionary Screens United Church Funds recently announced the modernization of its exclusionary screens – the practice of avoiding investments in industries or operations involved in activities that conflict with United Church of Christ’s (UCC) still speaking faith. The modernized exclusionary screens rule out industries associated with tobacco, firearms and military/nuclear weapons, human rights, occupied territories, private prison operators, environmental/greenhouse gas impact, and the extraction of coal and tar sands oil. We began implementing the new screens in January 2018. Microsite Platform Helps Churches Elevate their Planned Giving Program While planned giving resources have been available from the UCC for over 40 years, UCF learned from working with clients that donors often do not know about opportunities to make a planned gift and organizations do not have the resources they need to promote it. We also learned that donors are more inclined to have a conversation about making a planned gift with their pastor or members of the community they know and trust. Taking these findings into consideration, UCF, in collaboration with the UCC, launched a Planned Giving microsite, an online platform designed for UCC churches and ministries. This initiative is designed to get more churches and ministries involved in planned giving with an online presence. The microsite provides churches and ministries with the educational resources and marketing tools necessary to build a successful planned giving program. Visit https://ucfunds.org/planned-giving-church/ to watch a brief video about this initiative. This annual report includes additional information about planned giving. Beyond Fossil Fuel Funds Celebrate their Third Anniversary with Stellar Performance In November 2017, the Beyond Fossil Fuel Funds (BFF) – the Beyond Fossil Fuels Fund and Beyond Fossil Fuels Balanced Fund – celebrated their third anniversary. The BFF Funds provided investors with stellar investment performance for the last three years, and as of December 31, 2017, the Beyond Fossil Fuel Fund outperformed its benchmark. The BFF Funds screen companies that produce or explore for oil, gas or coal, maintain the social screens that are applied to UCF’s portfolios and provide investors with the diversification that they require. We are proud to offer these values-aligned funds and pleased with their performance. Thank you for the trust and confidence you place in UCF. We look forward to serving you in the coming year.
Donald. G. Hart President 4
Investment Commentary: The Benefits of Diversification
Investment Review In 2017, markets were remarkably calm. In some ways, this was a surprise, given then political and geopolitical uncertainties. In other ways, the underlying reasons for the markets' positive performance were much easier to understand. Financial markets finished 2017 as they started, on a most positive note. Investors’ recent enthusiasm reflects a balanced and upbeat global economy. Passage of the ‘Tax Cuts and Jobs Act’ added to U.S. growth prospects. Most interesting, investors have taken notice of the opportunities in Europe and many emerging markets countries. International Equity Markets International equity markets led performance throughout 2017. While this trend is only one-year-old, it affirms the proven benefits of a diversified approach to equity investing we have referenced over the past few years. Emerging markets equities (MSCI EM) had a significant impact on portfolios, returning 37.28% in 2017. The developed market international index (MSCI EAFE) was also robust, with a return of 25.03% for the year. U.S. Equity Markets Large U.S. companies, as represented by the Standard & Poor’s (S&P) 500 Index, gained 21.83% in 2017, while the Russell 2000® Index, which measures the performance of small-cap companies, delivered 14.65% for the year. Fixed Income Markets Bonds, as represented by the Barclays Capital U.S. Government/Credit Index, had a return of 4.00% in 2017, despite the Federal Reserve (Fed) rate hikes. The Fed raised its benchmark rate in March, June and December in response to wage pressures and the re-emergence of inflation. Performance Summary United Church Funds (UCF) leveraged three avenues to generate performance that beat several fund indices in 2017. One major theme was our decision to favor equities over fixed income in UCF balanced funds. We also emphasized emerging markets versus U.S. equities in UCF equity funds. Finally, UCF reaped the benefit of our active managers’ selection of stocks from around the globe. Equity Funds The Total Equity Fund provided stellar gains in 2017; the Fund returned 24.32% and beat its respective benchmark by 0.37%, net of fees. An overweight to international developed markets and emerging markets within the Fund was additive to overall performance. The International Equity Fund, a component of the Total Equity Fund, outperformed its benchmark by 2.00%, net of fees. The remaining components, Domestic Core Equity Fund and Small Cap Equity Fund slightly trailed their benchmarks, each by 0.50%, net of fees. As for individual managers, Quantitative Management Associates (QMa), LSV Asset Management and Baillie Gifford International each beat their respective benchmarks. QMa, a U.S. core equity manager, returned 23.84% vs. 21.83%; LSV, an international value manager, returned 29.03% vs. 27.19%; and Baillie Gifford, an international growth manager, returned 31.70% vs. 27.19%. 5
Beyond Fossil Fuels Fund The Beyond Fossil Fuels (BFF) Fund outperformed its benchmark (24.90% vs. 23.95%) net of fees. The Fund benefited from discerning stock selection and exposure to international markets. Although fossil fuel exclusions have recently been a drag on performance as energy prices have risen, QMa, the Fund manager, has overcome that headwind. The Fund celebrated its three-year anniversary in November 2017, beating its benchmark for one and three-years, net of fees, and sits near the top of its peer universe. Fixed Income Fund The Fixed Income Fund trailed its benchmark (3.86% vs. 4.57%), which can primarily be attributed to the Fund’s sell-off in the second half of the year due to a sharp rise in interest rates. In August, UCF selected Voya Investment Management to replace Western Asset Management (WAMCO) as its bank loans manager. After double-digit returns in 2016, the combined performance of WAMCO and Voya slightly trailed its benchmark return of 4.26%, although Voya finished above its benchmark for its portion of 2017. The Pension Boards core fixed income manager tracked its benchmark, 4.16% vs. 4.00%, net of manager fees. Community Capital lagged its respective index at 3.39% vs. 3.54%. Finally, Lazard Asset Management, responsible for managing emerging markets debt, trailed its benchmark, but emerging markets debt was additive to performance overall. Balanced Funds Performance for the UCF Balanced Funds (Conservative, Moderate, Aggressive and Beyond Fossil Fuels) was competitive with their respective benchmarks, net of fees. Returns ranged from 10.80% for the Conservative Balanced Fund to 19.09% for the Aggressive Balanced Fund. Investment performance was driven primarily to our overweight in equities. Each Balanced Fund ranked in the top quartile relative to their respective peers, according to Lipper Analytics. Manager outperformance was broadly positive with few disappointments. A small allocation to cash was mildly detractive as both equities and fixed income had positive returns. Alternatives Balanced Fund The Fund outperformed its benchmark (14.89% vs. 14.43%) net of fees, driven primarily by an overweight to strong equity markets. The Alternative Assets component of the Fund underperformed in 2017. A more modest year by the real estate manager, Heitman, was not unexpected given its solid performance in recent years, with a 7.27% return for 2017 compared to 5.43% for its benchmark. Weatherlow and Magnitude, two UCF hedge fund of funds managers, underperformed their index with returns of 6.70% and 6.72%, respectively, versus 7.74%. Finally, Abbey Capital tracked its benchmark, 2.46% vs. 2.51%. Over four years, however, these managers are ahead of their indices and over five years just slightly behind their indices, net of fees.
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Market Outlook The favorable dynamic of a global economic expansion should support the market’s positive outlook in 2018, with a few caveats. International growth should exceed U.S. growth, despite the boost U.S. corporate earnings growth will receive from changes to tax regulations. We believe a diversified approach should continue to be the best discipline. Regarding risks, while the Fed is expected to increase the Fed Funds rate three times, that could change due to tight labor markets, faster wage growth and higher inflation expectations. Also, policy missteps in China, geopolitical events and mid-term U.S. elections in 2018 are factors that could contribute to potentially higher volatility in 2018. We remain positive on the potential for global equities, especially because economies around the world are improving and thus earnings stand to grow. Valuations, while relatively high on a historical basis, are not excessive. When we look at return potential across regions, global equities are more attractive than U.S. equities. We continue to emphasize emerging markets equities, where relative performance versus developed markets has just begun to turn upward. As for fixed income, our duration (interest rate sensitivity) is slightly lower than the fixed-income benchmark, and we continue to favor floating/variable rate bank loans because of their lower sensitivity to future rate increases by the Fed. We will remain alert for signs of over-exuberance should markets become too optimistic about the impact of policy and tax reforms. We will continue to focus on selecting skilled managers, at low fees, in the right asset classes and scrutinizing managers through extensive due diligence, and insist they adhere to environmental, social and governance criteria in their selection of investments. Above all, we will continue to be prudent stewards on your behalf in an increasingly complex world.
David A. Klassen Chief Investment Strategist
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Investment Performance
As of December 31, 2017
Managed Funds
Average Total Rates of Return
Annualized
Returns on UCF’s funds are presented net of fees
Quarter
Year to Date
One Year
Three Years
Five Years
Ten Years
Fixed Income Fund
0.63%
3.86%
3.86%
1.99%
1.47%
3.79%
0.57%
4.57%
4.57%
2.66%
2.08%
4.07%
Barclays Capital Gov’t Credit Bond Index (BCGC)
0.49%
4.00%
4.00%
2.38%
2.13%
4.08%
Domestic Core Equity Fund 1
6.81%
21.33%
21.33%
10.71%
15.33%
7.90%
S&P 500 Index
6.64%
21.83%
21.83%
11.41%
15.79%
8.50%
Beyond Fossil Fuels Fund 4
4.77%
24.90%
24.90%
11.44%
N/A
N/A
S&P 500/MSCI ACWI IMI net, linked
5.72%
23.95%
23.95%
10.80%
Small Cap Equity Fund 1
4.26%
14.15%
14.15%
8.09%
13.14%
5.33%
Russell 2000 Index
3.34%
14.65%
14.65%
9.96%
14.12%
8.71%
International Equity Fund 1
4.33%
29.19%
29.19%
8.70%
6.28%
2.49%
MSCI ACWI ex US net/Custom Index, linked
5.00%
27.19%
27.19%
7.83%
6.80%
1.84%
Cash & Equivalent Fund
0.97%
0.77%
0.77%
0.26%
0.16%
0.29%
Lipper Money Market Funds Index
0.22%
0.65%
0.65%
0.26%
0.16%
0.35%
Alternatives Fund 3
3.47%
5.32%
5.32%
2.83%
5.39%
N/A
Custom Index 70% HFRI Funds of Funds Composite Index, 30% NCREIF Fund Index
1.42%
7.06%
7.06%
4.72%
6.12%
Fixed Income Policy Index 85% Barclays US Gov’t/Credit Aggregate, 5% JPM LSTA Performing Loan
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Funds of Funds
Average Total Rates of Return
Annualized
Returns on UCF’s funds are presented net of fees
Quarter
Year to Date
One Year
Three Years
Five Years
Ten Years
Total Equity Fund 37% Domestic Core Equity, 10% Small Cap Equity and 53% International Equity
5.22%
24.32%
24.32%
9.49%
10.68%
5.02%
MSCI ACWI IMI net/Policy Index, linked
5.72%
23.95%
23.95%
9.52%
11.00%
4.97%
Conservative Balanced Fund 2 38% Equity, 61% Fixed Income and 1% C&E
2.30%
10.80%
10.80%
4.58%
4.71%
4.55%
Current Policy Index 35% MSCI ACWI IMI net, 65% Fixed Income Policy Index
2.35%
11.02%
11.02%
5.19%
5.28%
4.98%
Moderate Balanced Fund 63% Equity, 36% Fixed Income and 1% C&E
3.43%
15.80%
15.80%
6.44%
6.99%
4.85%
Current Policy Index 60% MSCI ACWI IMI net, 40% Fixed Income Policy Index
3.64%
15.85%
15.85%
6.94%
7.54%
5.42%
4.14%
19.09%
19.09%
7.62%
8.42%
4.97%
Current Policy Index 75% MSCI ACWI IMI net, 25% Fixed Income Policy Index
4.42%
18.83%
18.83%
7.96%
8.89%
5.59%
Beyond Fossil Fuels Balanced Fund 4 63% BFF,36% Fixed Income and 1% C&E
3.15%
16.37%
16.37%
6.67%
N/A
N/A
Current Policy Index 60% MSCI ACWI IMI net, 40% Fixed Income Policy Index
3.64%
15.85%
15.85%
6.94%
Alternatives Balanced Fund 3 55% Equity, 22% Fixed Income, 23% Alternatives
3.93%
14.89%
14.89%
6.12%
7.15%
N/A
Current Policy Index 50% MSCI ACWI IMI net, 30% Fixed Income Policy and 20% Alternatives Policy
3.30%
14.43%
14.43%
6.65%
7.49%
Aggressive Balanced Fund 2 77% Equity, 22% Fixed Income and 1% C&E
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Beyond Fossil Fuels Funds The UCF Beyond Fossil Fuel Funds (BFF) – the Beyond Fossil Fuels Fund and Beyond Fossil Fuels Balanced Fund – celebrated their third anniversary in November 2017 and continue to offer competitive performance to investors.
Faith-Aligned Climate Funds
An Enhanced Equity Index Strategy
The BFF Funds are free of companies that explore for or produce fossil fuel. They maintain the social screens that are applied to UCF’s funds and provide investors with the diversification they desire.
The Funds use enhanced indexing, which combines positive elements of passive and active management.
A Global Equity Option
A Balanced Fund Option
The Beyond Fossil Fuels Fund provides equity access to developed markets and emerging market countries, while seeking to eliminate exposure to most companies with fossil fuels reserves.
The Beyond Fossil Fuels Balanced Fund combines the Beyond Fossil Fuel Fund as the equity allocation and a globally divested core fixed income allocation.
Growth in Assets (in US $ millions) Beyond Fossil Fuels Fund Beyond Fossil Fuels Balanced Fund
2014
2015
2016
2017 102.2
89.6 77.3 66.1
63.8
23.2 11
26.7
66.6
“Our congregation takes pride in UCC Firsts and in our local First Church ‘Firsts,’ the ways that we faithfully step out on the leading edge of social justice. For us, the BFF Fund allowed the opportunity for another ‘First’ that has turned into a financial blessing. The chance to ‘do right’ has also been a chance to ‘do well.’ UCF has kept us on the leading edge and showing that justice can benefit even the investor.” - The Rev. Elena Larssen, Senior Minister, The First Congregational Church of Long Beach, UCC
Founding Investors Below is a sampling of BFF Funds founding investors:
Mt. Vernon Zwingli, UCC
“ In 2012 the Massachusetts Conference Board of Directors became the first religious body in America to vote on a resolution to divest from fossil fuel companies.
“ Our Mayflower Church Foundation is proud to be a founding investor in BFF Fund.
We were delighted to be among the first investors when the BFF Fund was created. UCF realizes that what we do with our assets is a moral statement. ”
Our Foundation’s investment in BFF Fund is also a powerful teaching tool to inspire individuals, families and congregations to move their money out of fossil fuels and invest in a hopeful future! ”
- The Rev. Dr. Jim Antal, Minister & President, Massachusetts Conference UCC
- Rev. Emily Goldthwaite Fries, Associate Minister, Mayflower Church Foundation
“ In 2014, we were looking both for a more Creation-
centered involvement as well as an exposure less dependent on a declining oil market. The BFF Fund admirably met both of those perspectives. We are proud to have had an early involvement with this Fund, and we are also pleased that our assets have grown nicely since then. ” - Phil Leavenworth, Acting Chairperson, Mt. Vernon Zwingli UCC Endowment Committee
“ Now more than ever before is the need for grass root
organizations such as churches and judicatories to actively advocate for the protection of our environment.
New York Conference is pleased that the Beyond Fossil Fuel’s option became available to us through UCF. Our mandate is to continue to move all our investments into portfolios that “bless the earth. ” - Rev. David R. Gaewski, Conference Minister, New York Conference UCC
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Faith-Based Investing is Sustainable Investing Much of the domestic agenda for sustainability shifted away from the legislative space in 2017, providing more enthusiasm for sustainable investing. United Church Funds, a long-time faith-based investor, was well positioned to capitalize on this enthusiasm, making new strategic alliances and continuing the foundational work of promoting sound environmental, social and governance practices in our investments.
Climate Change Concerns In June 2017, UCF joined over 1,000 U.S. mayors, corporate leaders, investors and colleges, creating the broadest cross-section of the American economy heretofore assembled in pursuit of climate action. The group issued the “We Are Still In” Declaration, signaling their intent to continue to ensure the U.S. remains a global leader in reducing carbon emissions. Together, these leaders sent a strong signal to the international community and the 194 other parties to the Paris Agreement about the United States’ continued commitment to ambitious action on climate change absent leadership at the federal level. In the aggregate, the signatories are delivering concrete emissions reductions that will help meet America’s emissions pledge under the Paris Agreement. United Church Funds also continues to be a vocal proponent of examining environmental impacts on communities of color and Indigenous communities. For example, our participation in the Marathon Petroleum shareholder resolution sought to have Marathon examine and understand its social, environmental and economic risks when entering partnerships such as the Dakota Access Pipeline.
Pharmaceutical Pricing and Addiction United Church Funds is among a cadre of faith-based investment managers, health systems, secular fund managers and benefits providers with a holistic view of the U.S. economy and a fundamental concern for the communities in which we operate. Pharmaceutical drug price increases represent a threat to these systems and we perceive a major way to combat these imbalances is through proper alignment of executive compensation rewards. Ultimately, drug price increases should not be allowed to be too significant a driver of executive compensation increases. As such, UCF is one of a small group of lead filers with pharmaceutical companies seeking better executive compensation disclosures as it relates to pharmaceutical price increases. Families and churches across the U.S. are coping with opioid addiction. So too is the U.S. economy. A Goldman Sachs analysis cites the costs of health care, criminal justice and lost worker productivity at $78.5bn in 2013 and notes that “the crisis has grown significantly since then, implying substantial costs to both employers and the public sector." UCF has both a moral as well as a long-term economic concern for the responsible handling of opioids. Together with members of Investors for Opioid Accountability (IOA), a coalition of 30 treasurers, asset managers, faith-based, public and labor funds with over $1.3 trillion in assets, UCF is co-filing multiple shareholder proposals on board oversight of business risks related to opioids.
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Fair Lending Along with other financial institutions, UCF continued the conversation on fair and non-predatory lending practices with Wells Fargo. In 2017, Wells Fargo agreed to investor demands that the bank undergo a business standards review which will seek to determine which policy and governance changes will prevent the abuses that the company perpetrated on customers over the last several years. Though this is a promising commitment, investors are not yet withdrawing our shareholder resolution, to maintain focus on the need for a holistic review.
Modernizing Our Exclusionary Screens In 2017, UCF, together with the UCC Board, went through a process to rectify the “Still Speaking Faith” with our responsible investing process. We sought to identify those deeply held moral issues that could not be adequately addressed by shareholder engagement in addition to companies whose lackluster environmental or social performance might be an early indication of poor investment performance. Those industries or practices, which conflict with our values that are incapable of being meaningfully influenced by our position of “investor owner”, are excluded from our portfolios. UCF will now exclude tobacco, firearms, military weapons, private prisons, coal and tar sands oil producing companies. In addition, we will restrict from investment those companies, no matter their industry, that score lower on environmental or social key performance indicators. UCF is glad to be in constant and renewing service to our values-aligned and faith-based clients and considers our sustainable investing program to be a place for positive action in an uncertain legislative and political present.
Kathryn O’Neill McCloskey Director of Social Responsibility
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Maximizing the Potential of Planned Giving
United Church Funds, in collaboration with the UCC, launched a Planned Giving microsite in July 2017. We designed the microsite for UCC churches and ministries.
The online platform allows a church or ministry to inform donors about the importance of planned giving and explain how a gift today can help to ensure the future sustainability of their church or ministry. Clients have access to educational resources and marketing tools to build and promote a successful planned giving program. Donors can also learn about a church’s mission and explore his or her planned giving options.
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Easy The simple linear format makes it easy for donors to find the planned giving information they need.
Responsive The microsite works seamlessly on desktops, tablets and iPhones.
Turnkey A comprehensive solution that requires no IT, web development or planned giving expertise.
Professional Accurate and up-to-date planned giving content and information, available 24/7.
The sample testimonials below illustrate how clients partnered with UCF to create a custom microsite to accelerate their planned giving programs.
Chicago Theological Seminary Chicago, IL “Planned giving is a crucial component of any fundraising strategy. By having a microsite devoted to planned gifts, CTS donors can explore what options are available to them and learn how their planned gift can provide a lasting impact to the seminary. The microsite is fully customizable, and by using our brand and voice, it feels familiar to donors. The site is easy to navigate and provides clear information on how to remember our institution in a planned gift. Though planned gifts are often not realized until much later, the microsite offers donors the tools and resources to consider impactful giving. By partnering with UCF, our staff can continue the work of relationship building and stewardship, while trusting the expertise of UCF in the area of planned giving.” - Chad R. Schwickerath, Manager of Alumni and Church Relations
Back Bay Mission Biloxi, MS “Back Bay Mission is proud to offer a planned giving option to our donors and potential donors. We set up a planned giving microsite where our donors and potential donors are walked through the reasons and steps to give to Back Bay Mission. The process of building the microsite did not require IT expertise and setting up a microsite was easy with the assistance from UCF and PG Marketing teams. The microsite offers an invaluable information that is easy to read and understand. Sharing the knowledge that these gifts help sustain what is most important to them is the best marketing strategy.” - Laura Payne, Community Relations Associate
Plymouth Congregational United Church of Christ Fort Collins, CO “Plymouth is a growing congregation whose endowment is only ten years old. We see our UCF microsite as one of the key ways to build the endowment through planned gifts from members and friends. The appealing design of the microsite helps us attract prospective donors and makes all of the relevant information easily accessible in one place…a first for us! We have appreciated the support and help of both UCF and PG Marketing team. We were able to give them the basic information and they ran with it: no stress, no pain, great result.” - The Rev. Hal Chorpenning, Senior Minister
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Clients
Our clients’ decision to invest in UCF funds speaks to their commitment to values-aligned investment practices.
We are proud of our diverse client portfolio and committed to supporting their mission.
Number of UCF Clients
none
1-19
20-39
40-59
60-79
80-100+
1, 039
Total Clients
UCF Client Types
904 Churches
17
4
National Ministries
54
Conferences & Associations
30
Health & Welfare
4
Colleges & Seminaries
6
Non-UCC Clients
37 Others
New Clients
We are honored that 22 churches and faith-based organizations selected UCF as their investment manager in 2017. As a trusted partner, UCF continues to: • Invest in companies that operate in a sustainable manner • Offer a family of diversified funds, managed for prudence and performance • Adhere to the legal guidelines that govern the endowments of faith-based institutions We look forward to helping our clients grow their assets to achieve a mutual goal – providing more funds for ministry and mission.
Below is a sampling of our new clients:
Lummi Island Congregational Church
St. Peter’s UCC in Owensville, Missouri
United Congregational Church of Conway
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UCF Welcomes New Chairman and Board Members
The Rev. Dr. Charles C. Buck, Chair The Rev. Dr. Charles C. Buck is Transitional Conference Minister of the New Hampshire Conference of the United Church of Christ. Prior to that, he was Conference Minister of the Hawai`i Conference for thirteen years and has also been pastor of local churches in Hawai`i and Northern California. Dr. Buck has served on numerous boards of directors, and in addition to his current service on the United Church Funds Board, he is a member of the Board of the Christian Board of Publication (Chalice Press). In addition to a Master of Divinity from San Francisco Theological Seminary, he holds a Ph.D. in historical musicology from Stanford University. He is a member of Waiokeola Congregational UCC in Honolulu.
Mr. Frank Bolden Frank Bolden is the Chair of the UCC Board of Directors and a member of Christ Church UCC in Summit, New Jersey. Mr. Bolden is retired from Johnson & Johnson (J&J) where he served as Secretary, Vice President for Diversity World Wide and Associate General Counsel. Prior to joining J&J, Mr. Bolden was in private practice. He served as the Chair of the Board of Trustees of the University of Vermont, Union County College, Overlook Hospital and Crossroads Theater. He also served on the Board of Directors of Atlantic Health System, The National Conference for Christian and Jews, The Institute for Mediation and Conflict Resolution, The National Medical Fellowships and the New Jersey State Chamber of Commerce. Mr. Bolden and his wife, Penny, are very grateful for and proud of their four children, nine grandchildren, and one great-grandchild.
Ms. Lisa Hinds Lisa Hinds is a senior vice president at EnTrustPermal, one of the world’s largest hedge fund investors. Prior to her current role, she led corporate development and client portfolio management for a distressed securities hedge fund. Ms. Hinds served in senior relationship management and institutional investment capacities at Morgan Stanley, Standard & Poor’s and Bear Stearns. She started her career in the Financial Management Program at GE Capital. Ms. Hinds is a member of the Church Council of The Riverside Church in New York City and the immediate past chair of the investment committee of the Riverside Church Endowment. She is also the author of “Justice Based Investing” that provides an investing framework for the integration of justice in a balanced portfolio. Ms. Hinds holds an MBA from the Fuqua School of Business at Duke University and a Master’s of Arts in Law and Diplomacy from the Fletcher School at Tufts University. She is actively involved in the Hedge Fund Association, High Water Women and 100 Women in Finance. She and her family live in Westchester, NY, traveling through the east coast for girls’ lacrosse.
Ms. Connie L. Lindsey Connie L. Lindsey is Executive Vice President and Head of Corporate Social Responsibility and Global Diversity & Inclusion at Northern Trust in Chicago. She is responsible for the design and implementation of the global corporate social responsibility and global diversity and inclusion strategy for Northern Trust. She also provides oversight and leadership to the firm’s response to environmental matters as well as social issues. Ms. Lindsey has been recognized for her leadership professionally and in the community. In 2011, Ms. Lindsey was honored with the Spirit of Achievement award by Loretto Hospital Foundation. She was the first woman to receive the award in its eight-year history. The recognition established the Connie L. Lindsey, Cancer Resource Center at Loretto Hospital in Chicago. Ms. Lindsey received her BA in Finance at University of Wisconsin-Milwaukee, has completed the Harvard Business School Executive Education Corporate Social Responsibility program, and is also a licensed Qualified Administrator of The Intercultural Development Inventory®. 19
Board of Directors
The Rev. Dr. Charles C. Buck, Chair Transitional Conference Minister New Hampshire Conference UCC Pembroke, New Hampshire The Rev. Dr. Kathy Dwyer Senior Pastor Rock Spring Congregational UCC Rock Spring, Virginia Ms. Barbara A. Everett Director of Development (Retired) Eden Theological Seminary Pleasant Hill, Tennessee Ms. Edith A. Guffey Conference Minister Kansas-Oklahoma Conference Lawrence, Kansas Ms. Lisa Hinds Senior Vice President EnTrustPermal New York, New York The Honorable Brian F. Holeman Associate Judge Superior Court of the District of Columbia Washington, D.C.
Mr. Nesa Joseph, MHA, Ed.D. President & CEO Visiting Nurse Association of Greater St. Louis Creve Coeur, Missouri
Mr. Mark R. Parthemer, Esq., AEP Managing Director & Senior Fiduciary Counsel Bessemer Trust West Palm Beach, Florida
The Rev. Gwendolyn V. Kirkland Managing Principal Kirkland, Turnbo & Associates Matteson, Illinois
Ms. Darlene Y. Sowell President & CEO Unleashing Potential St. Louis, Missouri
Ms. Connie L. Lindsey Executive Vice President and Head of Corporate Social Responsibility and Global Diversity & Inclusion Northern Trust Chicago, Illinois
Mr. Wade Zick Managing Director Pilgrim Firs Camp & Conference Center Port Orchard, Washington
The. Rev. Penny L. Lowes Pastor First Congregational Church UCC Rochester, Michigan Mr. William P. Morgan, CPA, MBA COO & CFO VSI Global Cleveland, Ohio
Ex-officio The Rev. Dr. John C. Dorhauer General Minister & President United Church of Christ Cleveland, Ohio
Mr. Frank Bolden Chair United Church of Christ Board of Directors Berkley Heights, New Jersey
20
Staff
Mr. Donald G. Hart President Mr. Theodore E. Phillips Director, Finance & Administration Ms. Kathryn O. McCloskey Director, Social Responsibility Mr. Howard W. Hawkins III Director, Business Development Ms. Karen Sherman-Chang Controller
Mr. Matthew W. Wagner Senior Executive, Business Development
Ms. Michele Hamilton Staff Accountant
Ms. Stacey Pettice Executive, Business Development
Mr. Gaylord Tang Administrative Assistant, Administration
Ms. Milagros Hernandez Client Services Team Leader & Planned Giving Associate
Ms. Debbie Wibowo Marketing and Communications Associate
Ms. Crysta Seelal Client Services Representative
Mr. Adam Sank Administrative Assistant, Business Development
Contracted Services from The Pension Boards - UCC Mr. David A. Klassen Chief Investment Strategist
21
Mr. Michael J. de Guzman Senior Analyst and Portfolio Manager-Alternatives
Ms. Lan Cai Senior Portfolio Manager and Strategist
Selected Financial Information
Financial Position
2017 Unaudited
2016 Audited
$ 833,200,000
$ 741,601,000
4,393,000
4,519,000
837,593,000
746,120,000
753,550,000
666,797,000
74,292,000
70,345,000
827,842,000
737,142,000
Assets Investments Other Assets Total Liabilities Common Investment Funds Endowments, Split-Interest Agreements & Other Total Net Assets
$
9,751,000
$
8,978,000
$
6,882,000
$
6,114,000
Activities Revenues Fees Earned on Managed Funds Other Revenues
1,112,000
532,000
7,994,000
6,646,000
Investment Related Expenses
3,397,000
3,220,000
Common Investment Funds Administration
2,238,000
2,295,000
Marketing Expenses
Total
Expenses
1,012,000
881,000
Grants Paid from Endowments
342,000
269,000
Other Expenses
232,000
253,000
7,221,000
6,918,000
Total
Change in Net Assets
$
773,000
$
(272,000)
22
Investing with a Mission:
Performance Beyond the Numbers
United Church Funds 475 Riverside Drive, Suite 1020 New York, NY 10115
877-806-4989 ucfunds.org
Photo credit: the United Church of Christ, General Synod images, reprinted with permission.
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