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Eco-Justice Notes
The E-mail Commentary from Eco-Justice Ministries

Preserving the Principal
distributed 2/6/04 - ©2004

Two decades ago, the church that I was serving received a substantial and unexpected bequest. A fringe member of the congregation left us 3/4 of a million dollars.

Well, you don't take that sort of cash and put it in the checking account to cover operating expenses. The church board, and the congregation as a whole, put a lot of time and thought into creating guidelines for the newly established Endowment Fund.

Pretty much everyone agreed that the principal of the fund should be preserved. The rules that we set up said that it would take a 2/3 vote of the congregation, and some pretty extraordinary circumstances, to tap into the core of that fund.

The assets of the Endowment Fund would be invested, and only the income from those investments could be used by the church. What's more, the guidelines specified that the bulk of the investment income must be used for mission projects.

At the insistence of a church member with extremely conservative financial leanings, though, not all of the income from the investments would be available for that mission giving. Ten percent of the income every year would be rolled back into the fund, so that there would be growth in the principal to keep up with inflation.

Without that provision, the high levels of inflation that we saw in the mid-80s would soon whittle down the real value of the endowment. An investment portfolio held at $750,000 would always generate income, but a time would come when the fund's stable annual return could only accomplish a fraction of what it once did.

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The conservative financial sensibilities that guide the management of the endowment fund reflect a rigorous notion of "sustainability." Theoretically, the endowment will provide money for mission in perpetuity, never being depleted, never being reduced in value because of inflation. Every year, the contributions made to the community will have the same value, the same impact. What it is doing can continue forever.

I try to remember that conservative wisdom when I deal with the ecological notion of sustainability. Unfortunately, in public policy issues with regard to natural resources, I rarely find anything that approaches the rigorous definition used by our Iowa church.

The issue of Timeline Magazine that came in the mail this week has "When the Oil Runs Out" on the front cover. The fact of running out of petroleum isn't up for debate. Oil is, after all, a non-renewable resource, and it is being consumed at a dramatic rate. In investment terms, oil and gas are like money in the checking account, generating no new income. Every drop that we use decreases the principal. It is, by definition, unsustainable.

Renewable resources work more like an investment account. A forest can produce new trees to replace the ones that are cut. The fish stocks of a lake or an ocean can repopulate when some fish are "harvested" for human consumption. If the level of withdrawal is kept reasonable, the use of trees and fish can continue forever.

"If" is the important word. In most cases, all around the world, human use of potentially renewable resources is running at a rate that far outstrips the best possible "return on investment." Ocean fisheries are in a state of collapse. Forests are being denuded. Topsoil is being eroded and depleted. Fresh water is in increasingly short supply. With countless resources, we're living on the principal, not the income.

A widely-used definition of "sustainable development" came from the United Nation's World Commission on Environment and Development (the Brundtland Report) in 1987. It says that sustainable development "meets the needs of the present without compromising the ability of future generations to meet their own needs."

There are several big flaws in that definition.

  • It seems to deal only with human needs and human generations. Can our needs be met without preserving most of the world's species? If so, it is OK to let them go extinct.

  • It is notoriously unclear about what "needs" are. Are SUVs, steak dinners and a fashionable wardrobe "necessary"? And what are the realistic "needs" of the future?

  • As the definition is often used, those future generations are endowed with amazing inventiveness and creativity. We can use up the oil, because they will discover some new and abundant energy source. If we're confident that they can do what we haven't been able to do, then our use of resources won't compromise their ability at all!
But even with its flaws, the Brundtland definition sets a goal that our global society has not been able to meet. Even though we know that sustainability means leaving a substantial and reliable pool of natural assets for the future, we're rapidly using up both renewable and non-renewable resources.

Slowing our profligate use of resources is an obvious necessity. It is a matter of survival for humans and for much of the rest of creation alike. Even trying for real sustainability will require significant changes, both in personal lifestyle choices, and in public policy.

It is likely that the US Congress will soon be re-considering a comprehensive energy bill. The bill, as it stands, provides major incentives for increased exploitation of non-renewable resources, and only minor support for the development of new, renewable technologies.

I urge you to tell your senators and representative about the very conservative notion of sustainability, and insist that they vote for an energy bill only when it moves us in that direction.

Shalom!

Peter Sawtell
Executive Director
Eco-Justice Ministries

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