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Treasury Management - Another Church Dao Idea

Matthew 25:25 “I was afraid, and I went and hid your talent in the ground.”

One thing I’ve noticed about churches is that they tend to be somewhat risk averse when it comes to money. The thinking is generally that the job of a church is not to make money, it’s to spend it. So we collect tithes and offerings, we allocate that to ministries and missions that help get people closer to God. If there’s some surplus then so be it, but the surplus should be kept very safe.

At our church, where we have lots of people from the finance and tech industries, there is a huge risk appetite and ability to generate exponential returns within our congregation. But when it comes to the church coffers, no one wants to take the risk to put the millions in our treasury to work in higher-yielding assets.

If things go great, no one will notice. But even if we invest in 10 assets that do well as a portfolio, at least one of them will lose money and someone could come demanding an explanation for that piece. It’s all downside and no upside.

It somewhat reminds me of the parable of the talents. When a master returns and sees two servants who multiplied his initial gift, he praised them. “Well done good and faithful servant. You have been faithful over a little; I will set you over much.” But then the third replied that he had hid the talent in the ground, “because you are a hard man reaping where you did not sow, and gathering where you scattered no seed, so I was afraid, and I went and hid your talent in the ground.” Jesus calls him wicked and slothful, then takes his talent away and gives it to the others.

I was thinking of a way to alleviate this internal tension. How can we be good stewards while at the same time protecting church leadership? Someone gave me this idea that if a congregant gave their offering to the church in a risky asset like crypto, with an accompanying letter that their preference was to keep it there until the church needed it for ministry, the problem would go away. A small gift might also turn into enough to buy a building over 5 or 10 years, but no one would have cause for concern because the gift was given with these wishes.

I then asked my friend Jason from the Algorand Foundation how he’d construct a portfolio like this. “I basically don’t want to touch it for 10 years, because I don’t want to put the burden of rebalancing on the church staff who are already so swamped. What do you think?” He replied

“This space is changing so fast. I don’t think anyone knows what a good portfolio will be in one year, let alone in ten years! But what I’d do is set up a trust where your church is the sole beneficiary and you know any money will end up in their hands. They can draw down on it at any point, but in the meantime you can have a few trustees who check in once every few months to rebalance and make sure the portfolio’s in line with current trends.”

Then he lit up and added, “actually, if you set that up I’d love to give to my church through a vehicle like that. In fact, there are lots of believers who have made a lot of money on crypto, but they can’t sell and give cash for one reason or another. Sometimes it would trigger cap gains tax, sometimes their overly conservative, anti-crypto banks might give them a hard time. But if they could donate crypto directly to ministries there are billions of dollars that would open up to support people getting closer to Jesus.”

I’ve written before about some ideas for a Christian DAO, and this conversation got me excited about another idea. Secular DAOs like the LAO have set up decentralized venture capital funds to leverage the power of the community in earning outsized returns. What if a DAO could do that for churches? There could be so much more resourcing for the kingdom.

Stay tuned… :)

Lord, thank you for opportunities to demonstrate faith. Thank you for talents and minas that you bestow upon us to multiply for the kingdom. We have no idea what is in store, but we know it’s good. Because you are good. In Jesus’ name, Amen.

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