LCMS Convention Workbook St. Louis, Missouri — 2026, Page 184

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OFFICER, BOARD, AND COMMISSION REPORTS

184

eligible borrowers of LCEF under LCMS bylaws and related resolutions. Such development work, as it relates to this question, would
include third-party investors and developers that may be for-profit
entities. Per LCEF, LCEF would not be making significant capital
contributions to the project. The LCMS-related entity would retain
some yet-to-be-determined ownership or control over some of the
property for ministry purposes post-development. Other portions of
the property could be used for other purposes, including housing or
commercial use.
Question 1:

Is such LCEF development work consistent with
Synod Bylaws 3.6.4 and 3.6.4.4.1?

Opinion: The question here boils down to whether development
activity that includes some ministry-specific purposes and other,
non-ministry purposes falls within LCEF’s charge under Bylaw
3.6.4, which provides that LCEF “is operated ... to further the
objectives and duties of the church extension fund by providing
financial resources and related services for ministry, witness, and
outreach” within the Synod and in limited circumstances beyond
the Synod. The answer to this question will depend on the specific
development project being presented; a blanket answer that all are
permitted or all are not permitted is not possible. The answer for a
specific project involves looking at two factors—the who and the
what.
As to the who, LCEF is permitted to provide financial resources and
related services within the Synod, to and within partner churches
that are in altar and pulpit fellowship with the Synod and, upon
the recommendation of the President, to certain Lutheran entities
formed and operating outside of the United States (which are not
understood to be at issue here). If the recipient of the financial resources is a professional church worker, a congregation in the Synod, or an agency of Synod, then the resources would be “within
the Synod” and this factor would be satisfied (as it would be if the
entity is, or is within, a partner church with which the Synod is in
altar and pulpit fellowship, subject to Board of Directors approval).
However, if, as the background from LCEF suggests, the recipient of the financial resources is, directly or indirectly, a subsidiary
of, or a joint venture with, persons and/or entities that are not professional church workers, congregations in the Synod, or agencies
of the Synod, then the recipient would not be “within” the Synod
(similarly, with a partner church). In such cases, providing financial
resources would be beyond LCEF’s authority.
As to the what, the development would need to “further the objectives and duties of the church extension fund” (Bylaw 3.6.4). The
“purpose, function, and assigned areas of responsibility” of a synodwide corporate entity are “set forth in [the Synod] Bylaws” (Bylaw 3.6.1, see opinion to Question 2, Op. 24-3043, minutes of Feb.
3, 2025), and the entity operates within such limitations (Bylaw
3.6.1.6). With regard to LCEF, the bylaws specify that it provides
“financial resources and related services for ministry, witness, and
outreach” (Bylaw 3.6.4). It does so by providing “financing and
services for the acquisition of sites, for the construction of facilities,
for the purchase of buildings and equipment, for operating expenses,
for professional church worker education, for the residential housing needs of professional church workers, for promoting strategic
ministry planning and assisting in capital campaigns; and for other
purposes approved by its governing board and the Synod Board
of Directors, which purposes shall be consistent with the ministry
and mission of the Synod” (Bylaw 3.6.4.4.1). The commission understands that the specifically enumerated activities and any “other
purposes approved by its governing board and the Synod Board of
2026 Convention Workbook

Directors”—as these relate to property development—must be to
develop facilities for “ministry, witness, and outreach,” consistent
with the general statement of purpose in Bylaw 3.6.4 (see also Op.
24-3043, Background, Part C, “The ‘Constructive’ Constitutionality of Church Extension Work”). Admitting that ministry property
may have incidental commercial use (for example, a parking lot
rented to a neighboring office building during the week, or retired
school facilities leased to Head Start), the commission finds such a
situation to be clearly distinguishable from investment or activity
for the purpose of significant commercial development, even if it
in some sense is intended to support or facilitate space for ministry.
In such development, where the commercial aspect is not merely
incidental to ministry but substantial and significant, the benefit
to “ministry, witness, and outreach” of LCEF assets or activity in
support of this aspect would be derivative, not direct. As such, this
is not development contemplated in the bylaw-assigned work of
church extension.
Question 2:

In connection therewith, various special purpose
entities (“SPEs”) may be created or utilized to accommodate the various ownership and management interests of LCEF, the LCMS-related entity,
and third-party investors and property developers.
If LCEF is the sole or partial member of an SPE
that functions in an ownership or investment role as
opposed to a development role, does that SPE need
to meet all the requirements of an “agency” under
LCMS bylaws, resolutions and CCM opinions?

Question 3:

If LCEF either directly or through an SPE of which
it is a member has a partial membership interest
(more likely a minority interest) in an SPE that has
the primary development role of a project (a “Development SPE”), does that Development SPE need
to meet all the requirements of an “agency” under
LCMS bylaws, resolutions and CCM opinions considering that other third-party stakeholders will also
have an interest in that Development SPE?

Opinion: For purposes of answering these questions, we assume
that the hypothetical development project is one that satisfies the
requirements set forth in our opinion on Question 1 above.
Regardless of what the ownership structure ultimately looks like, as
set forth in our Op. 23-3005A (see minutes of August 9–10, 2024,
item 44), the new entity here would be, as an agency of LCEF and/
or the LCMS-related entity, an agency of the Synod. This is true
regardless of how many levels there are between LCEF and/or
the LCMS-related entity and the ultimate property-owning entity.
Starting with the entity that LCEF and/or the LCMS-related entity are directly members of, that entity would be an agency of an
agency, which makes it an agency of the Synod as well. Were that
entity a member of another entity, then that entity would likewise
be an agency of the Synod. This would continue down throughout
the ownership chain until it terminated with the property-owning
entity, which would also be an agency of the Synod. Since all the
entities would be agencies of the Synod, the requirements related
to agencies generally would apply to all of the entities in such a
development.
While not directly asked, it is important to note that one of the requirements of an agency that is created by another agency is that
the creating agency must be the sole member of the new agency
(see 1981 Res. 5-07). All of the background provided by LCEF