A faith that pays dividends

by
10 March 2017

Andreas Whittam Smith traces the origins of the funds now managed by the Church Commissioners

Loop Images/Alan Novelli/SuperStock

Monastic estates: the ruins of Fountains Abbey, by the River Skell, North Yorkshire

Monastic estates: the ruins of Fountains Abbey, by the River Skell, North Yorkshire

THE Church Commissioners’ fund is now worth £8 billion — an enormous sum. Out of this, we make distributions to church bodies of £220 million per annum. In a church setting, with figures as large as these, you would expect perpetual controversy. Didn’t St Paul say that “the love of money is the root of all evil”?

In fact, while I have often been involved in lively debate during my 15 years as First Church Estates Commissioner, I have never found the tone reproachful or bitter or antagonistic. As I step down from my post, my feeling is one of grat­itude for support I have received from all corners of the Church.

Probably the main reason for the absence of antagonism between “us” (the Church Commissioners) and “them” (the rest of the Church) is that the long period of good investment performance has quiet­ened nerves: there is now a healthy push/pull between the two sides. The result is that, with one exception, the wider Church is content to let the trustees and staff of the Com­missioners manage the funds as they think best.

 

THE activity that does come in for a fair amount of comment and criticism can be summarised under the heading “ethical investment”. This was formalised in 1994, when the Ethical Investment Advisory Group (EIAG) was created.

This body benefits from its wide membership, including as it does representatives of the General Synod, the Archbishops’ Council, the Council for Mission and Public Affairs, the investing bodies, and co-opted members. This is a rich mix of theological, church, investment, and business experience.

The EIAG still maintains a blacklist, so to speak, comprising sectors of business activity in which the Church prefers not to invest (I say “prefer”, because there are genuine problems of definition). This restricted list comprises com­panies involved in military products and services, non-military firearms, pornography, tobacco, gambling, alcoholic drinks, high-interest-rate lending, and human embryonic cloning.

That was once the totality of an ethical investment policy. In recent years, however, a more creative approach has developed alongside the exclusions. This is the develop­ment of dialogue and engagement with companies that give rise to ethical concerns. A good example, albeit not yet successful, was an­­­nounced in February.

A coalition of institutional in­­vestors led by the New York State Common Retirement Fund and the Church Commissioners again asked the world’s largest oil company, ExxonMobil, to disclose how it would ensure that its business would remain resilient as global efforts to mitigate climate change proceeded. A similar proposal had been filed for consideration at Exxon’s 2016 an­nual meeting; it received support from 38.2 per cent of voting share­holders — a record for a climate-change resolution at the company — but that was not enough to bring about the change that was sought.

 

IF ETHICAL investment has been an example of church members’ putting pressure on the Commissioners through the Synod, the Com­mis­sioners, together with the Arch­bishops’ Council and backed by the Archbishops, are quite capable of pushing the other way. The drive to introduce greater intentionality into the way in which the funds dis­tributed to dioceses are used il­­lus­trates this theme.

Under the “Resourcing the Future” proposals, the old formula-based funding for ministry and mission in dioceses has been replaced. Instead, half the funds available will be distributed to just over half of dioceses, to support and develop mission in low-income communities; the rest, for which all dioceses can bid, will comprise Strategic Development Funding for investment in new growth opportunities across the country. This replaces a rather lazy system, in which the Commissioners’ distributions to the dioceses were often used to pay part of the dioceses’ opera­tional costs, without giving enhanced attention to mission.

 

UNDERLYING these debates on policy matters is the shared under-standing that this large endowment belongs to the whole Church. It is not the Church Commissioners’ alone: it is the Church’s money, and we are fortunate to have it.

It has come down to us from earlier generations, stretching back to the beginning of the Middle Ages. In those far-off days, there was little surplus wealth in the form of money. For instance, no one — neither monarch nor noble — would have had the resources to pay cash for the upkeep and running of a monastery. Instead, religious orders that found favour with king or lord would be given landed estates, so that the members of the godly community could maintain themselves on the produce of the land.

As a historian of Anglo-Saxon England, Lady Stenton, remarked, “In this early period, Englishmen regarded the monastic life as that which most closely approached the perfect expression of the worship of God. Monks had brought Christianity to England, and the foundation of monasteries had always been regarded as the duty of Christian princes.”

The origins of the Church Com­missioners’ endowment are found here. Even today, some small pro­portion of our land holdings will have been in the Church’s ownership since the Anglo-Saxon period; not far away will still be found the churches (or their remains) for which they were intended as a source of income.

 

YES, but didn’t Henry VIII dissolve the monasteries between 1536 and 1540, and take their estates? Yes, indeed. By this time, the Church held probably one third of all land in England. This was too much. It was bound to excite envy. Moreover, the incomes of the great abbeys such as Glastonbury and St Albans, and of bishoprics such as Winchester and Durham, were such that their abbots and bishops were, in a sense, richer than the greatest lay lords. Only the Crown exceeded them in wealth. That state of affairs could not go on.

None the less, while the Crown retained the bulk of the former monastery lands, and sold or leased them to the King’s aristocratic friends, the King also engaged in some valuable recycling of the Church’s wealth. In 1540, Henry established five new episcopal sees, carved out of the huge dioceses of Lincoln and Lichfield. These were the dioceses of Oxford, Chester, Gloucester, Bristol, and Peter-borough; and Henry endowed them with some of the estates of the dissolved monasteries.

 

THE Church’s wealth, largely in the form of tenanted land, was now in the hands of some 20 dioceses and cathedrals. There were, of course, no Church Commissioners or their pre­decessor bodies. But, from the mo­­ment when the Industrial Revolu­tion gathered pace in the second half of the 18th century, it was realised that these riches were badly distributed. Now the Church needed to plant new churches in areas of rising pop­ula­tion, such as Bir­ming­ham, Manchester, and Liverpool, where hitherto a single an­­cient parish church had suf­ficed.

Consequently, Par­liament began the laborious task of cre­ating a means of equalising this wealth. This was one of the great achievements of Robert Peel, who was Prime Minister from 1834 to 1835, and again from 1841 to 1846. When, in 1835, Peel addressed the “Electors of Tamworth”, he stated: “I cannot give my consent to the alienating of church property . . . from strictly ecclesiastical purposes. But . . . if, by an improved distribu­tion of the revenues of the Church, its just influence can be extended, and the true interests of the estab­lished religion promoted, all other con­siderations should be made sub­ordinate to the advance­ment of objects of such paramount import­ance.”

As a result, there began a process of the legal expropriation of the richer bishoprics and cathedrals. The work started with the cathedrals, with the decision that their revenues must be brought into a common fund and then redistributed as need required. The relevant act — the Cathedrals Act — went on to the Statute Book in 1840. Some 20 years later, bishops’ estates were brought into the Commissioners’ Common Fund.

 

THE funds that gradually built up under the control of the Ecclesiastical Commissioners (forerunners of the Church Commissioners) were used according to a formula, first established in the 1840 Cathedrals Act, that still governs the work of the Church Commissioners today. They should make “additional pro­vision . . for the cure of souls in parishes where such assistance is most re­­quired, in such manner as shall . . . be deemed most conducive to the efficiency of the Established Church”.

There are three things to notice about this statement. It refers to parishes, not to dioceses: the parish is the important unit. It mentions “where such assistance is most required”, and this has been taken to mean that the Commissioners can indeed subsidise the poorer parts of the Church. And it refers to “ef­fi­ciency”. The Commissioners in­ter­pret this as meaning that they have the power to fund new develop­ments, whether physical in nature, such as the building of places of worship on new housing estates, or supporting mission initiatives.

 

FINALLY, in 1948, the Ecclesiastical Commissioners were trans­formed into the Church Com­missioners, by which time the Church’s endowment, as
I like to call it, totalled £104 million in cash and securities, plus con­­sid­erably more ag­­ri­­­cul­tural land and London residential es­­tates than are owned today.

Technically, then, the history of the Church Com­missioners goes back to 1948. But, for me, the great enterprise started in 597, when the missionaries sent to England by Pope Gregory, led by St Au­­gust­­ine, persuaded the kings of the several kingdoms and lords to establish monas­teries by providing them with an endow­ment in agricultural land.

That is when the story begins.

 

Sir Andreas Whittam Smith is First Church Est­ates Commissioner.

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