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CELEBRATING 200 YEARS OF PRUDENT INVESTING


A TIME LINE OF SIGNIFICANT HISTORICAL EVENTS

1810

The Trustees of Donations to the Protestant Episcopal Church (TOD) is chartered by the Commonwealth of Massachusetts to receive and manage property in support of  “a Bishop in the Protestant Episcopal Church” and of Episcopal institutions within the Commonwealth.
 

1854

The TOD agrees to hold in trust the deeds to church buildings, rectories and parish houses within the Episcopal Diocese of Massachusetts. Parishes remain responsible for property upkeep.
 

1916

The Bishop and Trustees of the Protestant Episcopal Church in the Diocese of Massachusetts (B&T) is chartered by the Commonwealth of Massachusetts to receive and manage property in support of an “extension of the Protestant Episcopal Church in the Diocese of Massachusetts.”
 

1923

The number of trust funds managed by the TOD and the B&T for the benefit of diocesan parishes and institutions grows to 100.
 

1939

The Diocesan Investment Trust (DIT) is established by the B&T to provide diocesan parishes and institutions, including the TOD, with a long term investment vehicle for their endowment and trust assets.
 

1940

The DIT begins operations as a balanced fund with a principal preservation oriented combination of stocks, bonds and cash. Its investments are selected by a subcommittee of the B&T which includes members of the TOD.
 

1941

The number of DIT participants exceeds 100, the number of trust funds stands at 195 and the value of the DIT’s assets exceeds $5 million.
 

1953

The number of trust funds grows to 250.
 

1962–1964

The TOD and B&T divest themselves of church real estate. Parishes regain the deeds to their properties.
 

1965

In recognition of their parallel functions, especially in the wake of their real estate divestitures, the TOD and the B&T agree to merge. The surviving corporation adopts the TOD’s name and retains the 1810 charter.
 

1966

The number of DIT participants grows to 144, the number of trust funds managed by the TOD exceeds 350 and the value of DIT assets approaches $30 million.
 

1967

The TOD ends its twenty-eight-year-old practice of selecting the DIT’s investments. While retaining responsibility for investment policy, the trustees delegate the task of selecting securities to an outside investment manager.


1972

The TOD increases the number of investment options available to DIT participants from one fund (a balanced fund) to three funds: a balanced fund, a bond fund and a stock fund.
 

1973

The TOD establishes a Social Responsibility in Investments (SRI) standing committee charged with keeping the DIT’s investments “mainly if not wholly concentrated on companies whose social policies and products are acceptable to most, if not all, members of the Episcopal Church.”
 

1977

Waning interest in the DIT’s thirty-eight-year-old balanced fund leads to its closure and participants consolidate their holdings in the bond and stock funds.
 

1985

The TOD joins with other members of the Interfaith Center on Corporate Responsibility (ICCR) to establish a dialogue with companies doing business in Apartheid South Africa.
 

1986

A South Africa Free Fund is created and remains available to DIT participants until the collapse of apartheid in 1993.
 

1994

The TOD eliminates tobacco companies from the DIT’s holdings.
 

1999

The number of DIT participants stands at 150, the number of trust funds grows to 391 and the value of the DIT’s assets exceeds $120 million.
 

2009

On the eve of its bicentennial year, the TOD employed seven investment companies to manage assets held in approximately 800 separate accounts with a combined market value of roughly $160 million, the number of DIT participants has risen to 153 and the number of trust funds stands at 395.
 

2016

The TOD currently employs eight investment companies to manage assets held in approximately 800 separate accounts with a combined market value of roughly $220 million, the number of DIT participants has risen to 158 and the number of trust funds stands at 397.


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AN HISTORICAL RETROSPECTIVE

(The following is a summary of remarks on the history of the Trustees of Donations made by Thatcher Lane Gearhart at the corporation’s April 7, 2010 Annual Meeting, a meeting that marked  the formal beginning of the Trustees of Donations’ bicentennial year.) 

I have been asked by the powers that be to give a ten-minute talk on the full two-hundred-year history of the Trustees of Donations – which, at three seconds per year, would be nearly impossible to do if I were a serious and substantive historian.  Thankfully, then, I am not.  My chief qualification, I think - despite being the youngest trustee presently serving and now perhaps the youngest ever appointed - must be that I am the only trustee, and those who know me well can attest to this, who actually thinks he remembers the year 1810.

And so it was on March 3rd of that year that the Trustees of Donations to the Protestant Episcopal Church come into being by an act of the Legislature of the Commonwealth of Massachusetts as an independent, self-electing, and self-perpetuating corporation.  Having read the act itself, I am sorry to report that it lacks anything particularly scandalous or even particularly interesting.  It describes two “pious uses” for the assets entrusted to the Trustees of Donations:  firstly, to pay for a bishop – and apparently, as the Bishop is present at this meeting, his check has cleared; and secondly, to hold both financial assets and real property in trust for individual churches.

Now, the question naturally arises: Why were the Trustees of Donations established as an independent, self-appointing, self-perpetuating corporation completely independent of the Diocese?  It is here that we find the scandal of our founding!  In a January 1967 article in “The Church Militant”, our sometime Diocesan newspaper with a name from a different age, we find this:
 

It [the Trustees of Donations] arose out of a situation that happily no longer exists.  The Bishop of the Diocese, and certain “high church” parishes were seriously at odds.  As a protective measure, these parishes wanted to keep their permanent funds out of possible Episcopal reach, and shut off from Episcopal knowledge.  This corporation was the result.

I have seen this story told in various forms in a number of places, so though the details are light, I am inclined to believe it in substance, an inclination reinforced by a book published in 1984 to commemorate the 200th anniversary of the Diocese. The book begins with this at once corroborating and striking sentence:
 

Bishop William Lawrence often said that no one could hope to understand Massachusetts Episcopalians who did not realize that most of them were to a large extent Congregation-alists at heart.

No wonder the high churchmen distrusted the bishop!  Fortunately now, with a monk as our bishop, we no longer have that problem.

And so thus was the Trustees of Donations founded.  But all is not a straight shot up through 200 years to today – dessert will have to wait a little longer.

For in 1916 another organization was formed, one called the Bishops & Trustees of the Protestant Episcopal Church in the Diocese of Massachusetts (the B&T for short).  It was formed to do exactly the same things as the Trustees of Donations: to hold title to property of churches, both real and financial, and to manage those assets.  But why?  As the Trustees of Donations was set up to be independent of the Diocese, with independent, self-electing Trustees, the B&T was created by the Diocese to be a part of the machinery of the Diocese responsible to the Bishop and to the Diocesan Convention.

And so for the next fifty years, we had two parallel organizations doing essentially the same things!  You would be right to think that the overlapping roles played by these organizations raised eyebrows. But, we all know that things happen slowly in the church….

Now – something very interesting that I did not know. Until 1952, the Diocese did not exist – at least legally!  It was not until that year that the Diocese finally incorporated itself and gained the legal right to hold its own property.  Something else important also changed during the decade of the 1950s. It was decided that parishes could be trusted to hold title to and manage their own real property – i.e., their church buildings and rectories.  And so both the Trustees of Donations and the B&T spent the early 1960s transferring title to these buildings back to the parishes (or to the Diocese for mission churches).  And so by 1964, having divested themselves of real property,  the Trustees of Donations and the B&T had assumed a more limited – and more obviously coincident – role, that of managing financial property.

A quick detour back to 1940, a year in which the B&T made history by starting the Diocesan Investment Trust, the DIT as we call it today, the first comingled investment fund of its kind for the whole of the Episcopal Church….  It did well, so well in fact that twenty years later, in the mid 1960s, it was being used as an investment vehicle not only by its founder, the B&T, but also, despite a half century of “rivalry,” by the Trustees of Donations.

With all this being the case, there was really by the middle 1960s no practical reason for the two organizations to remain separate – but a history of independence from the Diocese on the part of the Trustees of Donations conflicted greatly with very-much-Diocesan nature of the B&T.  And so under Bishop Stokes there was worked out a deal almost as clever as the one that James Madison had brokered through the different apportionment of House and Senate seats to get the Constitution ratified.

The deal was this:  To preserve the Trustees of Donations’ independence, 15 of 28 trustees would be self-electing as had always been the case, and to preserve the B&T’s sensitivity to the needs and concerns of the Diocese, 13 of the 28 trustees – five from the Bishop, and five from the Diocesan Convention and the three Diocesan officers – would come from the Diocese.  And thus the modern Trustees of Donations was born.

We are called the Trustees of Donations, rather than the Bishop & Trustees, for a very good reason other than a natural Episcopal deference to tradition – that is, because the Trustees of Donations has a charter from 1810, eight years prior to the famous Dartmouth College Case, a supreme court ruling marking a point in time before which private corporate charters, like that of the Trustees of Donations, are nearly impervious to legislative tinkering.  And so it was quite rightly and sensibly decided to merge the B&T into the Trustees of Donations, rather than the other way around.

And thus, we find ourselves today, operating with the same structure and rules that came out of that great compromise of our own in the mid 1960s, but with a proud 200 year record of stewardship to the greater glory of God.