What is the Revolving Fund?
The Revolving Fund is managed by the Seventh-day Adventist Church in Canada. It is used to grant loans to churches, schools, and Seventh-day Adventist institutions within our territory, for the purpose of providing financial assistance with capital building projects.
Why and when was the Revolving Fund established?
The Revolving Fund was established to help churches and schools finance their building projects by providing loans at low interest rates. In 1992, the Seventh-day Adventist Church in Canada office started to operate the Revolving Fund. Prior to this, it was handled by the local conferences.
What is the most common source of funds?
Money is deposited under a charitable trust agreement in the Revolving Fund by members and institutions of the Seventh-day Adventist Church in Canada.
Who can use this service to make deposits and borrow?
Members and institutions of the Seventh-day Adventist Church in Canada can deposit money into the Revolving Fund. Churches, schools, and institutions of the Seventh-day Adventist Church in Canada can borrow from the Revolving Fund.
How many different depositors and loans are there?
There are 394 depositors and 92 borrowers as of December 31, 2019.
Do you turn away people who want to make a deposit?
Yes, there are times we turn away deposits because of the following reasons:
- The depositor is not a member of the Seventh-day Adventist Church in Canada.
- The depositor intends to deposit the funds for a short period of time (less than five years). The money is loaned to churches, schools, and institutions over a period of one to 15 years. Therefore, deposits need to be kept for a longer period in order to have funds to lend out to our churches, schools, and institutions.
- There is a surplus of deposits. We sometimes freeze the acceptance of funds if there is a surplus, until loans are requested by churches, schools, and institutions.
- The depositor wants to invest their money in a GIC (guaranteed investment certificate) or other type of investment. The Revolving Fund is not a bank or investment company; we do not offer any type of investments.
What is the rate of interest paid to depositors?
Since 2009, we have paid depositors an interest rate of 2.0% regardless of the amount deposited.
What are churches and schools charged?
Since 2009, the interest rate has been 3.75% for loans.
Why is there a difference between interest rate paid and the amount depositors receive? Where does the difference go?
The difference on the rate is to offset the interests we pay to depositors while the funds are not being used for loans. At the end of the year, the excess on the interest is divided between the conferences depending on how many depositors they have in the revolving fund.
Do you encourage people to put funds in for a just a few months?
No. This is similar to one of the reasons why we sometimes turn away deposits. This defeats the purpose of why the Revolving Fund was established. We rely upon the money deposited into the Revolving Fund in order to have available funds for loans to our churches, schools, and institutions.
When and how is interest paid?
Interest is computed monthly and paid to the depositors semi-annually on June 30 and December 31. If desired, interest may be credited to the account and compounded semi-annually on the above dates.
Can Canadians abroad deposit their funds with the Revolving Fund?
If the Canadian is still a member of the Seventh-day Adventist Church in Canada and has had an existing account before they moved out of Canada, then they can keep their funds into the Revolving Fund.
Can depositors make monthly deposits to their Revolving Fund account?
Lump sum deposits are preferred and encouraged to ensure that funds in the Revolving Fund are maintained and available for use by schools, churches, and SDA institutions in need.
Are deposits in the Revolving Fund insured?
Deposits in the Revolving Fund are not insured by any agency of the government. However, reserves have been placed in the fund by the local conferences in accordance with the General Conference policy, thus protecting depositors against any loss.
Terms of deposit.
All deposits are subject to the Trust Agreement and can be returned to the depositor at their request, but we would ask for 30 days’ notice. However, in case of an emergency, the deposit can be returned immediately upon a written request. When a new deposit is received, an agreement form will be sent indicating the amount of deposit, terms of deposit, and rate of interest.
In case of death, who should notify the Seventh-day Adventist Church in Canada?
The money in the Revolving Fund will become part of the depositor’s estate upon death. The depositor’s executor will notify us by submitting a copy of the death certificate and last will and testament.
The following are real-life scenarios of ways in which entities within the church have benefited from the Revolving Fund:
- Because of the lower interest rate, churches are sometimes able to make additional lump sum loan payments and pay off their loan earlier than the original approved term of loan. There is a church who was approved for a five-year loan, but they managed to pay their loan off in less than a year.
- Some churches cannot afford to pay their bank loans due to high interest rates and short payment terms. They can apply for a Revolving Fund loan, which will allow them to consolidate/transfer their loans to the Revolving Fund. This will reduce their interest rate and extend their loan term which makes their loan easier to manage.
- Churches borrow money from the Revolving Fund for various capital projects, including to purchase land and a building, fix the roof, install an elevator, and many other renovation projects. There are churches who have experienced emergencies like a broken furnace or roof leaking during winter. They need funds urgently and we are happy to release the funds to them in a timely manner. This allows them to take care of the temple of the Lord and continue their regular ministry activities uninterrupted.
- There are schools who borrowed from the Revolving Fund to construct new classrooms, repair bathrooms, extend their parking lot and various other renovations. There are also those that have purchased a house or property next to an existing school which allows for several possibilities like an increase in enrolment and expansion to more grade level.
We praise and thank God for our generous members who put their money and trust into the Revolving Fund in order to help our churches, schools, and institutions with their capital projects. There are some depositors who have shared with me that they would prefer to put their money in the Revolving Fund instead of earning higher interest in the bank because they believe in the purpose of the Revolving Fund: helping the work of the church. We extend a big thank you to all our depositors who support the work of the church through the Revolving Fund.