S5 Invest in Future Ministry · Lesson 3 of 4

Lesson 3 — Prudent Stewardship of Long-Horizon Funds

Draft a written investment policy statement for any invested Future Ministry Fund balances, grounded in the church's time horizon, risk tolerance and a qualified-advisor referral process.

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Seven Principles curriculum version 1.0 — author-review draft pending Leland Rubin's approval prior to publication. · Leland's Seven Stewardship Principles methodology, content, exercises and deliverables are created by Leland Rubin and remain in author-review draft pending his approval.

Where this lesson sits

Curriculum version 1.0 · Author Review

Module purpose: Build a written ten-year capacity and calling vision, adopt a Future Ministry Fund charter and funding formula, draft a product-neutral investment policy statement for any invested balances, and adopt a decision-and-approval framework so ministry investment is planned rather than reactive.

Official outcome: Future Ministry Investment Plan

This lesson produces: Investment Policy Statement Draft

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Learn

Participant study reading — approximately 90 minutes of learning and shared work.

Learning objective: Draft a written investment policy statement for any invested Future Ministry Fund balances, grounded in the church's time horizon, risk tolerance and a qualified-advisor referral process.

Recommended participants: Pastor, treasurer, finance committee chair, and, where available, a congregation member with relevant licensed professional background acting only in an advisory, non-decision-making capacity

Estimated teaching time: 90 minutes

Success indicators

• Leadership can state the fund's investment time horizon and risk tolerance in plain language
• A draft investment policy statement exists covering diversification, cost review, prohibited practices and rebalancing
• The team has identified the qualified, independent categories of advisor needed to implement the policy responsibly
• A named owner exists for reviewing investment performance, fees and policy compliance at least annually

Materials and evidence you will use

• Future Ministry Fund Charter and Funding Formula
• Current statements for any existing invested balances
• A list of qualified advisor categories: investment advisor, CPA or tax professional, attorney, insurance professional
• A time horizon and risk tolerance grounded in the vision map
• A documented, independent advisor-engagement plan

What you should be able to produce

• Leadership can state the fund's investment time horizon and risk tolerance in plain language
• A draft investment policy statement exists covering diversification, cost review, prohibited practices and rebalancing
• The team has identified the qualified, independent categories of advisor needed to implement the policy responsibly
• A named owner exists for reviewing investment performance, fees and policy compliance at least annually

Foundational ministry principle

Proverbs 21:5

The thoughts of the diligent tend only to plenteousness; but of every one that is hasty only to want.

King James Version (KJV) · Public domain

This proverb contrasts diligent, careful planning with hasty action, directly relevant to a leadership team deciding how invested long-horizon funds should be managed rather than chasing quick or unexamined decisions.

Leland Rubin frames a written investment policy statement as an act of diligence: it slows leadership down enough to think clearly about risk and horizon before any dollar is invested, protecting the church from hasty decisions made under pressure or excitement.

Understand the concept

Your work in this lesson focuses on this outcome: Draft a written investment policy statement for any invested Future Ministry Fund balances, grounded in the church's time horizon, risk tolerance and a qualified-advisor referral process.

Diligence, not haste, protects a fund meant to serve the church for a decade; today's investment policy statement gives leadership a written, prudent framework for growing it responsibly.

Why it matters for your church

Long-horizon church funds left entirely uninvested may lose real purchasing power over a decade to inflation, while funds invested carelessly risk loss right when they are needed.

A written investment policy statement protects the church from both hasty, pressured decisions and prolonged inaction.

Engaging a qualified, independent advisor, rather than relying solely on a well-meaning volunteer's opinion, reduces conflict-of-interest risk and improves decision quality.

Examine the evidence

Use Future Ministry Fund Charter and Funding Formula, Current statements for any existing invested balances, and A list of qualified advisor categories: investment advisor, CPA or tax professional, attorney, insurance professional to compare your church's present practice with its stated intentions. Look for documented patterns, missing information, and differences between what people assume and what the evidence supports.

Your completed work should be supported by A time horizon and risk tolerance grounded in the vision map, and A documented, independent advisor-engagement plan. Record uncertainty honestly so your team knows what still needs to be verified.

Prepare for the shared exercise

Draft a written, product-neutral investment policy statement for the Future Ministry Fund covering time horizon, risk tolerance, diversification, cost review, prohibited practices and qualified-advisor engagement. The Investment Policy Statement Draft produces the Investment Policy Statement Draft, which contributes to the principle's principal deliverable.

Before working with your team, consider this reflection: Where in our current handling of long-horizon funds have we favored either fearful inaction or hasty enthusiasm over written, diligent policy?

Key terms

Investment policy statement: A written document stating a fund's time horizon, risk tolerance, diversification requirements, cost-review commitment and prohibited practices, used to guide investment decisions consistently over time.
Diversification: Spreading invested funds across many different holdings to reduce the impact of any single holding performing poorly.
Qualified independent advisor: A licensed professional — investment, tax, legal or insurance — engaged to advise on a decision without a conflicting personal or financial interest in the outcome.

What this means for a church

• Long-horizon church funds left entirely uninvested may lose real purchasing power over a decade to inflation, while funds invested carelessly risk loss right when they are needed
• A written investment policy statement protects the church from both hasty, pressured decisions and prolonged inaction
• Engaging a qualified, independent advisor, rather than relying solely on a well-meaning volunteer's opinion, reduces conflict-of-interest risk and improves decision quality

Common failure patterns

• Leaving a growing long-horizon fund entirely in low-yield accounts indefinitely out of fear or unfamiliarity with investing
• Investing based on a single enthusiastic recommendation without independent verification or a written policy to test it against
• Failing to review costs and fees annually, allowing them to quietly erode fund growth over many years

Ministry case

A Fund Left Idle for a Decade

A synthetic congregation, Fictional Hillcrest Fellowship, had accumulated a future-ministry balance of roughly $220,000, an illustrative figure, over nine years, all held in a standard checking account earning negligible interest. Leadership had discussed investing it several times but always tabled the conversation, uncertain how to proceed responsibly and wary of making a mistake.

After drafting a written investment policy statement naming a conservative-to-moderate risk tolerance appropriate to the fund's eight-to-ten-year horizon, the board engaged an independent, licensed investment advisor recommended by their denomination's stewardship office, reviewed the advisor's fee structure against two alternatives, and moved a defined portion of the balance into a diversified allocation consistent with the policy, while keeping a near-term segment in stable, insured accounts for the priority the vision map expected to fund within three years.

Lesson takeaway

Diligence, not haste, protects a fund meant to serve the church for a decade; today's investment policy statement gives leadership a written, prudent framework for growing it responsibly.

Discuss

Guided discussion for the leadership table.

With a written investment policy statement in place, let's turn to the formal decision, approval and review framework that will govern every future-ministry investment going forward.

What time horizon and risk tolerance best fit our Future Ministry Fund given our ten-year vision map?
What would tempt our leadership to skip the qualified-advisor step, and how does our policy guard against that?
How will we communicate to the congregation that invested funds are managed conservatively and reviewed independently?
What specific practice should our policy explicitly prohibit, given our church's particular history or temptations?

Discussion notes

Practice

Applied exercise — produces the Investment Policy Statement Draft.

Investment Policy Statement Draft

Estimated time: 50 minutes

Participants: Pastor, treasurer, finance committee chair, and, where available, an advisory-only licensed professional congregation member

Artifact produced: Investment Policy Statement Draft

Required inputs

• Future Ministry Fund Charter and current balance
• Statements for any existing invested church balances
• List of qualified advisor categories

Instructions

State the fund's time horizon in years, tied to the ten-year vision map's priority timeline.
State the fund's institutional risk tolerance in plain language.
Draft a diversification requirement without naming any specific fund or product.
Draft a cost-review commitment stating how often and how fees will be reviewed.
List at least three prohibited practices for the fund.
Draft the qualified-advisor engagement clause naming which advisor categories will be engaged and how independence will be confirmed.
Assign a named owner for the annual investment review to the board.

Complete it online

Investment Policy Statement Draft

Church name: ______________________
Fund balance at drafting: ______________________
Facilitator: ______________________

Policy section	Draft language	Rationale	Owner	Annual review date

Your response — Investment Policy Statement Draft

Worked example

A fully completed sample using a fictional church. This is illustrative teaching material, not any church's actual data.

Fictional Hillcrest Fellowship (illustrative example — not actual church data)

Fictional Hillcrest Fellowship is a synthetic congregation of about 400 attendees used here to illustrate a completed investment policy statement draft.

Policy section	Draft language	Rationale	Owner	Annual review date
Time horizon	Near-term segment: 2-3 years for HVAC priority; long-term segment: 7-10 years for remaining vision items	Tied directly to the Lesson 1 vision map priority ranking	Finance committee	Annual
Risk tolerance	Conservative for near-term segment; conservative-to-moderate for long-term segment	Board consensus reflecting congregation's low tolerance for disruption to near-term plans	Board	Annual
Diversification	Long-term segment diversified across multiple asset classes; no single holding exceeding 10 percent of that segment	Reduces concentration risk without naming any specific product	Investment advisor (independent)	Annual
Cost review	All-in fees reviewed annually and compared against at least one alternative advisor	Protects fund growth from being eroded by unreviewed costs	Treasurer	Annual, each January
Prohibited practices	No leveraged or speculative holdings; no related-party product without independent verification; no decision without documented board review	Protects against conflict of interest and undocumented decisions	Board	Ongoing
Advisor engagement	Independent, licensed investment advisor engaged for implementation; CPA consulted on tax implications	Ensures qualified, conflict-free implementation	Finance committee chair	Annual relationship review

How this leadership team reasoned

• Leadership recognized that treating the entire $220,000 balance identically ignored the fact that part of it was needed within three years for the HVAC priority, so segmenting by horizon reduced the risk of a near-term shortfall due to market fluctuation.
• The board chose a conservative-to-moderate tolerance for the long-term segment specifically because the congregation had expressed low tolerance for surprises in prior stewardship conversations.

Decisions recorded

• The finance committee was authorized to interview two independent, licensed investment advisors and bring a recommendation to the full board within 60 days.
• The near-term segment was moved into insured, stable accounts immediately, pending the advisor engagement for the long-term segment.

Completed artifact extract — Investment Policy Statement Draft

Investment Policy Statement Draft adopted covering both fund segments, with an independent advisor search authorized and a near-term segment already secured in stable accounts.

Illustrative exercise score: 19 of 20. The policy was thorough, segmented by horizon, and grounded in the Lesson 1 vision map, with a clear and independent advisor-engagement process, though the cost-review benchmark did not yet specify a maximum acceptable fee range.

BAG Index complement

Household financial-literacy layer that complements this stewardship principle.

BAG Index complement

Investment costs and fees, and why they compound against you

Just as the church's investment policy statement commits leadership to reviewing fees annually because costs quietly erode long-horizon growth, households need to understand that investment costs and fees compound over time exactly like returns do, except working against the saver rather than for them. Small percentage differences in fees can add up to large differences in an eventual balance over many years.

Teaching points

• Investment costs come in several forms: expense ratios on funds, advisory fees, account fees and transaction costs, and all of them reduce the amount that actually stays invested and compounding.
• Because fees are typically charged as a percentage of assets, a seemingly small difference — for example between a lower-cost and higher-cost option — can compound into a substantial difference in an ending balance over one or two decades.
• Lower cost does not automatically mean better, and higher cost does not automatically mean worse service or performance; the discipline is to know what is being paid and to ask whether it is justified, not to assume either extreme.
• Total cost is often not obvious from a single number; households benefit from asking directly for an all-in cost estimate covering every fee category before committing.
• Reviewing costs periodically, the same way the church's investment policy statement requires an annual fee review, is a simple, repeatable habit that protects long-term growth.

Household practice step: Households complete a short worksheet listing every investment or retirement account they hold, and commit to requesting a plain-language, all-in cost disclosure for each from the account provider or a qualified advisor within the next 30 days.

Supports this principle: S5's investment policy statement models disciplined, annual cost review for church funds; this complement extends that same fee-literacy discipline to the households the church is discipling in stewardship.

This is general financial education about how costs affect long-term growth, not advice about any specific account, fund or fee structure; households should review actual costs and alternatives with a qualified, independent, licensed financial or investment professional.

Score

Transparent 20-point exercise rubric: four criteria rated 0 to 5 with observable anchors.

Criterion	0 — not evident	3 — acceptable	5 — exemplary	Sample
Completeness (0–5)	Fewer than three policy sections were drafted.	All policy sections were drafted, but some lacked a rationale or owner.	All six policy sections were drafted with rationale, owner and review date.	5
Use of evidence (0–5)	Risk tolerance and horizon were chosen with no reference to the fund's actual balance or the vision map timeline.	Some sections referenced the vision map or fund balance, others were generic.	Time horizon, risk tolerance and segmentation were explicitly grounded in the actual fund balance and the vision map's priority timeline.	5
Alignment to the module purpose (0–5)	The policy named a specific investment product or made a return promise.	The policy stayed product-neutral but did not clearly connect to prudent, long-horizon stewardship principles.	The policy stayed fully product-neutral and clearly connected every section to prudent, horizon-aware, conflict-free stewardship.	5
Actionability and ownership (0–5)	No owner or next step was assigned to any policy section.	Owners were named but the advisor-engagement step lacked a timeline.	Every section has a named owner, and the advisor search has a specific 60-day timeline.	4
Worked sample total				19 / 20

Completeness: Hillcrest Fellowship completed all six sections with rationale and named owners.
Use of evidence: The near-term and long-term segmentation was directly tied to the vision map's three-year and seven-to-ten-year priorities.
Alignment to the module purpose: No specific product was named anywhere in the policy, and every section was tied to prudence, horizon or independence.
Actionability and ownership: Owners and a 60-day advisor search timeline were set, though the cost-review section did not specify a maximum fee benchmark.

Lesson-exercise scores (20 points each) demonstrate learning and artifact quality. They do not automatically overwrite the official Seven Principles assessment, which remains a separate 100-point rating of five dimensions for each principle.

Submit evidence

What must be submitted for this lesson to count as complete.

Submit

• Draft Investment Policy Statement worksheet with all six policy sections and named owners

Attach this evidence

A time horizon and risk tolerance grounded in the vision map
A documented, independent advisor-engagement plan

File upload is not implemented in this prototype. Ticking a box records that the church can produce the document; it does not store a file.

Contribute to official outcome

How this lesson builds the Future Ministry Investment Plan.

Artifact produced: Investment Policy Statement Draft

Becomes the prudent-stewardship section of the Future Ministry Investment Plan and governs how any invested fund balance is managed going forward.

Open the module deliverable assembly

Participant reflection and notes

Where in our current handling of long-horizon funds have we favored either fearful inaction or hasty enthusiasm over written, diligent policy?

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