Assembly approves solution for designated funds dispute
The Layman, June 27, 2008
SAN JOSE, Calif. — The 218th General Assembly approved a compromise Thursday to settle a dispute between the General Assembly Council and the Presbyterian Church (USA) Foundation over the use of particular restricted funds.
The compromise will result in the creation of a Restricted Funds Resolution Committee. It will consist of seven members: two appointed by the Presbyterian Foundation’s board of directors; two appointed by the GAC; and three appointed by GA Moderator Bruce Reyes-Chow who have no ties to either the foundation or the GAC, but with expertise in trust law and theology.
The committee would resolve disagreements on the disbursement of restricted funds when the foundation and the GAC are not able to agree themselves on the donor’s intent. When the committee can’t resolve a dispute, the foundation and the GAC would go to civil court.
At issue between the foundation and the GAC was a recommendation issued by Stated Clerk Clifton Kirkpatrick and seconded by his Advisory Committee on the Constitution. They proposed that, if a dispute arises between the GAC and the foundation regarding the proper use of a donor-designated fund, the GAC should have the final word.
The recommendation, had it been approved by GA, would have reversed a long-standing GA policy that recognizes the foundation as fiduciary of long-term and donor-designated funds.
Foundation officials disputed the recommendation, citing legal documents, trust law and generally recognized accounting principles. They said the proposal to allow a fund beneficiary — in this case, the GAC — to interpret donor intent was unwise, imprudent and dangerous.
The matter came up Tuesday before the Committee on Mission Coordination and Budgets. Committee members Bob Davis and Joanne Hull drafted the compromise, which called for the resolution committee and also:
- Identified the foundation as fiduciary “under civil law,” with a special focus on managing funds.
- Recognized the GAC as a mission body whose expertise is in program implementation.
Representatives of the foundation and the GAC signed off on the compromise, and after several hours of wordsmithing by committee members, it was approved for transmittal to GA.
GA adopted the committee’s recommendation Thursday without discussion and by voice vote.