The Sydney Anglican Diocese is an example of a body that cut back spending during the GFC because of losses. The UCA Synod (region) of Victoria and Tasmania has gone through a painful season of selling property in 2013-2014 to make up for school losses.

By the end of the GFC continuing to spend meant that the UFS’s capital was significantly reduced.

In response The Property Trust, holder of UCA property in NSW and ACT, which amount to an insurable value of approximately $5bn, took out a loan of $100m from a bank in 2013, and used it as immediate liquidity to invest capital in UFS.

The loan was needed because a certain amount of capital is required to enable UFS to function prudently.

“Based on our investing activities, it was considered as prudent to have capital of around $100m”, a Synod working paper states. This was needed to make sure the property and other investment risks of UFS met the prudential risk-weighted capital adequacy standards that would apply if it were a comparable commercial entity.

The interest bill of the Synod is well covered by the UFS earnings, leaving a surplus of approximately $4.5m to distribute. Having staved off a crisis during the GFC the UCA in NSW and ACT now has breathing space to work out how to repay the loan and adopt a new funding model.