The United Methodist News Service has published a well-researched article, authored by UMNS reporter Kathy Gilbert, on the continuing legal battle over the Methodist Building Endowment Fund.
Unfortunately, the UMNS did not post the full text of the document which is at the center of the case: a 1965 Declaration of Trust that established boundaries on the use of funds donated decades ago to construct the Methodist Building in Washington, D.C. and to endow the work of the now-defunct Methodist Board of Temperance, Prohibition, and Public Morals.
The full text of the eight-page Declaration of Trust is linked below, as is another source document in the case.
At issue is whether the United Methodist General Board of Church and Society (GBCS) — a successor board to the Board of Temperance — is free to use earnings from the restricted endowment for causes other than alcohol- and drug-abuse ministry.
Some Methodist conservatives have complained that GBCS has been using money earned by the endowment to lobby for causes far removed from the intent of the endowment, such abortion rights, government-run health care, and an expanded welfare state.
Records of GBCS spending show that temperance-related spending now accounts for a relatively small percentage of Board’s expenditures. In 2006, the bulk of the Board’s $2.3 million program budget was spent on areas such as “Economic and Environmental Justice,” “Education and Leadership Formation,” and maintaining an office at the United Nations.
The 1965 Declaration of Trust (here in PDF—8 pages), which transferred the Methodist Building and significant stock holdings to what would eventually become the General Board of Church and Society, stipulated that income from the trust would be devoted “in perpetuity” to addressing the “areas of temperance and alcohol problems.”
From the Declaration of Trust:
The [Methodist Church] Division [of Alcohol Problems] owns securities and cash given to it over the years through donations, contributions, and bequests to support the work in the area of temperance and alcohol problems…. [These assets,] including real, personal, and mixed property, have been impressed with a trust-in-fact for them to be used and applied for the purposes for which they were given — for work in the areas of temperance and alcohol problems. The assets have been so utilized to the present time.
It is the purpose of this Declaration of Trust to formalize the existing situation and provide a method for the continued management, investment, reinvestment, and application of the principal and accumulated income for the purposes for which the funds were originally given, that is to say, work in the areas of temperance and alcohol problems….
It is the further purpose of this Declaration of Trust to implement the action of the 1960 General Conference of the Methodist Church…. [T]he General Conference… ordered the following wording to be placed in that section of the 1960 Discipline of The Methodist Church which describes the Board of Christian Social Concerns and its Divisions…:
Funds vested in any of the predecessor boards shall be conserved for…the specific purposes for which such funds have been given.
Kathy Gilbert’s report for the UM News Service highlighted recent developments in the Trust dispute:
The case went to trial Oct. 6 and Judge Rhonda Reid Winston heard final arguments on Oct. 22. Attorneys are working on final summary statements, which are due to the judge Jan. 8. After the judge reviews those statements, she will issue a decision.
The judge [has already] ruled that the creators of the 1965 Declaration of Trust probably meant to confine the funds to alcohol and temperance concerns, but she was uncertain whether the language in the document accurately reflected their original intentions.
“The Court is convinced that there is genuine issue about whether the  Declaration, as drafted, inaccurately and mistakenly reflects the intentions of the settlors,” Winston said.
In closing arguments, Jeffrey A. Liesemer, an attorney for the Board of Church and Society contended that the Declaration of Trust was based on the mistaken belief that individuals who had given money to the board during the 1920s and 30s had wanted their donations to be confined to temperance and alcohol-related work.
“There is no evidence of any gift restrictions on pledge cards, in minutes of meetings, on bonds — nothing reveals any gift restrictions,” he said, according the UMNS report.
Further, Liesemer argued that an October 1965 compromise agreement among three Methodist boards that were being merged into one “supplants” the legal Declaration of Trust agreement drawn up just seven months earlier.
According to the UMNS account, Liesemer said the compromise made it clear that, “the money could be used for all programs and couldn’t be squirreled away for temperance and alcohol problems.” The October 1965 compromise gives a legal basis for “reformation” of the Trust, he argued.
Interestingly, the compromise agreement, which now appears to be central to the Board of Church and Society’s case, is not mentioned in the Board’s original complaint filing to the Court (here in PDF—15 pages). GBCS made the filing, instigating the current case, in an attempt to gain a final resolution to the Trust dispute (details here, 2nd item).
Without referencing the October 1965 compromise, the Board’s complaint — submitted in February 2007 — asked the D.C. Superior Court to allow a “reformation” of the Trust “which will make it clear that the trustees of the Board will not in the future be limited in the use of income of the Endowment Fund to problems of alcohol abuse only.”
Among those testifying before the Court was Roger Burgess, a former executive with the Division of Alcohol Problems and General Welfare of the Board of Christian Social Concerns (a successor to the Board of Temperance and a predecessor to the Board of Church and Society).
Mr. Burgess, who served from 1953-1965, told the Court he believes donors who gave to support construction of the Methodist Building and the subsequent work of the Board of Temperance, Prohibition, and Public Morals did intend for their contributions to be used solely for temperance and alcohol-related work, according to the UMNS account.
Evidence presented in the case included letter written by Mr. Burgess just weeks before the Declaration of Trust was signed.
In the January 1965 letter, Mr. Burgess noted that “a reading of the minutes and a study of the old Boards of Temperance and of Temperance, Prohibition and Public Morals indicates very clearly that the money given in previous years was given in trust for work in the field of alcohol problems. To expand the use of the trust now would be to break faith with those who gave the money.”
After leaving the Board of Alcohol Problems in the mid-1960s, Mr. Burgess became vice president of the United Methodist Publishing House. He later served as general secretary of the United Methodist General Commission on Communications.
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