Volume 87: Aligning Finances and Faith: One Quaker Meeting’s Journey Toward Right Relationship
About ImpactPHL Perspectives:
ImpactPHL Perspectives is a multi-part content series that explores the many facets of the impact economy in Greater Philadelphia from the perspectives of its doers, movers, shakers, and agents of change. Each volume is written directly by a leader in this space to discuss best practices and share lessons learned while challenging our assumptions about financial and impact returns. For more thought leadership like this, check out the full catalog of ImpactPHL Perspectives.
Arlene Kelly & Pamela Haines, Central Philadelphia Friends Meeting
Even as foundations, individuals, and other non-profit institutions throughout society have been re-examining how management of their financial resources aligns with their mission, this question also becomes relevant for our places of worship. Particularly in many of our larger, older congregations, significant endowments exist. We offer the story of Central Philadelphia Friends Meeting growing into greater awareness and commitment in the use of its resources as a case example, illustrating some of the potholes we encountered as well as ways we learned to navigate our way from differences to unity on key issues.
As a big meeting with a long history in Philadelphia, Central Philadelphia Friends Meeting (Quaker) finds itself with a significant endowment that current members had no hand in creating but are now responsible for stewarding. The meeting has fairly high occupancy and other fixed costs, and we count on the return from investments, together with member contributions, to help cover these and other meeting-related expenses.
“If our financial resources and our faith are well-aligned, what would that look like?”
During those times when our income exceeds our expenses, it is natural that questions arise regarding the ‘right’ use of the excess. Should it simply be added to the meeting’s endowment? If our financial resources and our faith are well-aligned, what would that look like? How do we think of the meeting’s financial resources: Is it “our money” or “money for which we are the current stewards”? How much is enough? The answer to this question may or may not accord with the meeting’s annual budget. To the extent that our meeting has resources that have accumulated across generations, what privilege has contributed to that accumulation, and how might we address reparations? What is our understanding of community? There is, of course, the meeting community, but how permeable is the boundary between the meeting and the wider community? How do our answers to these questions inform decisions regarding how we spend/disburse our money?
In recent decades, our first major opportunity to confront such questions came in 1970. We owned two meetinghouses, the result of a schism being healed, and two meetings on opposite sides of the schism joining together. Both meetinghouses were in Center City, Philadelphia, and after ten years of dividing activities between the two and a nudge from the city expressing an interest in the one property, the decision was made to sell the Twelfth Street meetinghouse for $700,000.
The Twelfth Street Fund
When the difficult decision to sell had been made after many months of deliberation and consideration of various alternatives, a well-respected and weighty member rose and said, “This money will be the ruination of this meeting.” That remark was taken very seriously. In a Quaker meeting, decisions are made by the full body; further, we do not vote, but rather come to a point of reaching unity on a decision; strong concerns raised by a few engaged members can be reason to not move forward with a direction supported by many. To address the expressed concern regarding the ‘ruination of the meeting’ and to prepare ourselves for making a decision regarding what to do with the proceeds from the sale, the meeting set up a Proceeds Committee, which was intentionally made up of about 7 folks representing a wide range of views. That Committee engaged the meeting in a year-long process of bringing people of diverse opinions together in small groups to share views on what we stood for as a Quaker meeting and views on the right use of the money. That process bore fruit: when the Committee’s recommendations were brought to our monthly business meeting, unity was reached on approving the report after just 45 minutes of discussion.
It was agreed to take $100,000 and establish an endowment fund to help in the support of our burial ground, which incurred a deficit annually that needed to be met from the meeting’s budget.
In regard to the balance of the money, one significant point of difference—not surprisingly—was whether or not the principal of (what came to be called) the Twelfth Street Fund should be preserved and only the interest disbursed, or whether the full amount should be spent. The Proceeds Committee addressed this as follows:
We are committed neither to preserving nor dissipating the funds, but rather recommend that we move ahead in disbursing the money as the Spirit leads us.
A second point of difference was whether to look inward to the needs of the meeting and its members or to look outward to the wider community around us. The Committee felt:
A clear call that to meet the needs of our members is a tangible way of caring for one another in the meeting community . . . equally clear is the desire to reach out in the urban community beyond the meeting to help rectify the inequities which exist there and to find ways to further the cause of peace, both in this city and the rest of the world.
Requests for grants or loans were received and acted upon by the Proceeds Committee over the following ten years or so. A good deal of good was done, and some hard lessons were learned. For example, purchasing a rehabbed house and holding the mortgage to enable a lower-income family to buy it was a worthwhile undertaking, but it became a major headache when the family ceased payments on the mortgage.
The era of administering the Twelfth Street Fund came to an end in late 1984 when the Finance Advisory Committee brought a report to the monthly meeting for business, noting that since its establishment, the fund had disbursed over $1,000,000 in grants, loans, and gifts. They recommended that, given the low balance in the fund (approximately $160,000), it be closed to further outside grant applications, and that:
The Fund’s cash principal should be invested in the Meeting’s Consolidated Fund (now called the Growth & Income Fund) held at Friends Fiduciary, and the income spent in each current budget on social concerns and care of the Friends community.
The meeting approved, and this era of our engagement in the wider community via our unrestricted financial assets came to an end. Forty thousand dollars of the remainder was invested in the Delaware Valley Community Reinvestment Fund, now known simply as Reinvestment Fund, which supported affordable housing and childcare program capital needs in the Philadelphia area through low-interest loans – the meeting’s first venture into alternative investments and the balance was moved to our account at Friends Fiduciary Corporation (FFC).
Decision Making on Surpluses
The first several years of the 21st century brought higher returns on investment, resulting in our income exceeding our needs. While the practice of redepositing annual surplus to our principal is not unknown to us, we did not automatically do that then or in the ensuing years. During the early years of this century, we donated any surplus to outside community groups—some Quaker and some not. In more recent years, surpluses have been placed in what we call an Opportunities Fund, not automatically folded back into our investments, but rather available by application to committees of the meeting to undertake new endeavors.
The first time we took an intentional look at how and where our money is invested occurred about ten years ago. Until then, and even then, our mindset was to do no ill with our investments. Our endowment is held and managed by Friends Fiduciary Corporation (FFC). They screen for the traditional Quaker "bads" (gambling, alcohol, weapons) and additionally carry a concern to actively witness through the use of their proxy votes, urging companies to be good corporate citizens. Their diligence in doing this, as well as their responsiveness when concerns were raised, allowed us to think about how our money was invested. About ten years ago, however, members of our meeting, along with other Friends throughout the region, were becoming increasingly uneasy with having our money invested in fossil fuels. This concern was shared with FFC. In response to the concern, and that voiced by other Quakers across the country, they set up a separate Green Fund; our meeting acted quickly to move some of our endowment into that new fund, even though we understood that we couldn’t be promised a high return.
Impact Investing
The next notable chapter in our journey began in 2021. In an article in the meeting’s newsletter, a member wrote:
Each month at the business meeting and in our committee meetings, we ask: “How does this decision support CPFM (Central Philadelphia Friends Meeting) in its goal to transform into an actively antiracist faith community?" I would like to suggest that the meeting's stewardship of our resources, specifically our invested funds, needs examination in light of this query.
“To the extent that our meeting has resources that have accumulated across generations, what privilege has contributed to that accumulation?”
Others in the meeting agreed that it was a topic worthy of exploration, and the monthly meeting set up a working group charged with coordinating a process of information gathering to build the foundation for the working group’s discernment and the meeting’s final decision. After six months of work, the group brought back an informational report, which was positively received, and for the first time, “impact investing” became part of the meeting’s vocabulary. We understand impact investments to be those made with the intention to generate positive, measurable social and environmental impact alongside a financial return, which can range from below-market to market rates.
Discernment regarding next steps was turned back to the Finance Advisory Committee. A breakthrough came when a meeting was arranged with staff from FFC. It turned out that they were very interested in pursuing the possibility of supporting impact investing by groups like monthly meetings, and were ready to work with our meeting to do a trial run.
In the spring of 2024, at the meeting for business, those present enthusiastically minuted readiness to receive a proposal to move $500,000 to investments that focused on three general areas: meeting the needs of underserved Philadelphians, addressing climate and environmental issues locally, and supporting Indigenous communities.
More work was done over the summer and early fall by FFC and the meeting’s Finance Advisory Committee. In October, a proposal to move $500,000 of the assets in our portfolio to three organizations suggested by FFC that fit the definition of impact investments was brought to the meeting for business. The corresponding investments we made were into Founders First Fund, Solar States, and Oweesta Corporation.
The investment return among the three ranged from below market to slightly above market, but in balance, it maintained a return similar to what our other investments with FFC bring. The meeting approved the recommendation of Finance Advisory without difficulty and with appreciation, and so the next step in our journey has been taken. It is a large step in that we have moved a significant piece of principal (about 7%) into impact investments for the first time; it is a conservative step in that maintaining the same level of investment income was a criterion in choosing the investments.
It is interesting to look back and reflect on what we’ve learned and what might still be learned. How are we yet to be stretched as we seek to bring our Quaker faith and our stewardship of financial resources into greater alignment? We’ve certainly learned that talking about money is hard work and that we need to be tender with each other and listen deeply. Reparations is a topic currently being discussed within the meeting, and soon to have a proposal on making reparations brought to the meeting for business. Quite likely that will help identify the next step and leave us with the decision whether we choose to take that step, or not.
Arlene Kelly is a longtime member of Central Philadelphia Friends Meeting and, in recent years, has carried a particular concern regarding the right use of financial resources, both individually and corporately.
Pamela Haines is a member at Central Philadelphia, has a passion for the earth, economic integrity, and loves the repair of all kinds. She currently serves as the Clerk (chairperson) of the meeting's Finance Advisory Committee.