Sydney’s investments plummet in recession: CEN 6.12.09 p 5.

The value of the Diocese of Sydney’s investments have fallen by more than half this past year due to the collapse of the global financial markets, Archbishop Peter Jensen reports in a parochial letter distributed to the diocese on June 7.

The global financial crisis has taken a heavy toll across the communion, with many dioceses in the United States, Canada, and Australia reporting significant declines in investment and parochial income.

“We have suffered very significant losses to our diocesan capital,” Dr. Jensen reported due to the leveraged investment strategy used by the diocese. “For several years now we have borrowed money to increase the amount invested,” he said, noting this had realized high returns in past years, and had permitted a “special” £10 million “distribution to help purchase land and build new churches” in 2007.

However, when the market moved against the diocese, by year’s end the leveraged strategy had “accentuated our losses. As a result, our investments have fallen by more than half and the distribution of money from our investments has been cut by 50%. Ministries which depend on this funding will be severely impacted.”

Diocesan finances were now “stable,” with no debt and much of the diocese investment funds now held as cash. “But the losses remain,” he said, and would result in a restructuring of operations.

Last week the Episcopal Diocese of Washington also reported that it would be cutting its £2.4 million budget by £250,000 due to a projected shortfall of contributions from its 93 congregations. A spokesman stated the diocese would begin staff cuts to cover the shortfall as well as reduce its contribution to the national church’s coffers by £80,000.

Declining revenues and an aging church membership have strained most of the Episcopal Church’s dioceses. A March report released by the State of the Church committee for July’s General Convention estimated that 68 percent of the church’s dioceses were experiencing financial difficulties.