California Baptist Foundation’s Church Loan Fund Liquidated After 10 Years of Unmet Investor Obligations

The California Baptist Foundation’s Church Loan Fund (CLF) has been liquidated after a Georgia trust company, Reliance Trust Company of Atlanta, took control of its assets. The decision came after the fund failed to meet its obligations to investors since the fall of 2010. Reliance Trust Company is now responsible for managing the fund’s remaining assets, liquidating them, and distributing proceeds to investors.

As of March 31, approximately 29 percent, or $24,933,216, of the outstanding principal balance of the CLF’s loans were more than 90 days past due and classified as “noncurrent or on nonaccrual status.” Foreclosures totaled $10,688,631, or 12.5 percent of the fund’s portfolio. These figures highlight the financial strain the fund faced over the years.

Philip W. Kell, president of the California Baptist Foundation, stated that the liquidation of the CLF does not jeopardize the foundation itself. He explained that the $85.8 million CLF has been operated as a stand-alone investment fund since 1996. The fund’s resources were used to provide loans to churches and purchase church bonds and other similar investments.

The California Baptist Foundation, an agency of the California Southern Baptist Convention, was founded in 1952 and serves as the trust agency for Southern Baptists in the Golden State. The foundation manages trusts, endowments, and managed funds totaling more than $101 million, with continued growth reported by Kell.

The liquidation of the CLF reflects broader challenges faced by church-related financial initiatives. As churches across the country have adapted to the coronavirus pandemic, some have shifted their focus toward supporting congregational needs, which may have influenced the financial landscape of such funds.

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