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CR01 Income available for Gateway Gift Distribution

23 May 2025

PROPOSED MOTION – Gateway – Formula to Determine the Amount of Income in each Financial Year to be Made Available for Distribution/Allocation

Submitted by: Mountainside Lutheran Church (M/Side#1)

BE IT RESOLVED:

That the Gateway Gift Trust Board apply the following formula each financial year to determine the amount to be allocated to the income account of the Gateway Gift Trust for that year, those funds to be made available for the allocation and distribution of grants:

For each financial year, the total amount to be allocated to the income account of the Gateway Gift Trust to be made available for the allocation/distribution of grants is calculated as the greater of:

  1. The amount of interest and dividends earned or
  2. The amount of income calculated using the Swenson/Tobin rule (understood to be based on interest, dividends plus realised and unrealised gains),

PLUS

1% of the capital of the Gateway Gift Trust (as approved by Synod 2013 – remit 7), the capital value referred to herein being based on Net Assets as reported in the last Audited Financial Statements of the Gateway Gift Trust.

REASONS FOR THE MOTION

Purpose To revise and expand the Gateway Gift Trust Board’s current policy and methodology relating to the determination of financial year’s amount to be made available for allocation/distribution of grants.

Explanation The purpose of the Gateway Gift Trust is to support congregations in their ministry and mission.

Under the current policy, availability of funds is based solely according to the Swenson/Tobin rule1, which limits the annual amount determined as income, allocated to the income account of the trust, and made available for Grants. While this approach aims to preserve capital, it restricts us to a single option.

Convention of Synod and the Gateway Gift Trust Board are reminded of the 2013 Convention of Synod remit 7 which authorising 1%pa of the capital to be distributed.  While that remit made this at the discretion of the Gateway Gift Trust Board, the non-application of this has seen the Gateway Gift Trust net assets grow from $3.9m 31/12/2012 to $5.4m 31/12/20232.  At the same time Congregations have had grant applications for support of new or ongoing projects denied in full or part meaning some projects never got off the ground while others were curtailed or forced to cease.

The above motion would now require the Gateway Gift Trust Board to allocate 1% of the capital of the Gateway Gift Trust each financial year to income and make this available as income for distribution.

Therefore, this motion anticipates the following advantages:

  1. Provides Two Options for calculating the annual amount to be allocated to the income account of the Gateway Gift Trust and made available for the allocation/distribution of grants. The option to be used is that which results in the greatest amount of funds available for grants.
  2. Requires a small percentage (1%) of the capital of the Trust each year to also be transferred to the income account and made available for grants.
  3. Maximises the funds available to support Congregations in their mission and ministry initiatives.
  4. Maintains Long-Term Sustainability: the revised formula for the calculation of funds available for distribution is expected to still more than adequately preserve the Gateway Gift Trust’s capital while ensuring that all earnings are directed towards fulfilling its core purpose.

Mountainside has also submitted a further remit related to this as follows:

M/Side#2 – Remit related to carrying forward of any unallocated/undistributed income in any year, this to be made available for allocation/distribution in subsequent years.  Should remit M/Side#2 pass, any portion of the amount determined by the revised formula in this remit (M/Side#1) which remained unallocated/undistributed would form part of the carry forward amount referred to in that remit (M/Side#2).

Notes: 1 LCNZ website notes the application of this rule to calculating the available funding.

2 Extracted from Charities Services Register.

SUBMITTING BODY DETAILS

This has been approved by the authorised body at a duly held meeting and is confirmed as an accurate and complete version of the agreed proposal.

Submitted by Ray Meharg, Chair Mountainside Lutheran Church Parish Council

Approved at Congregational AGM 30/03/2025

 

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