The Norwegian Church Endowment – Ovf
The Norwegian Church Endowment (Ovf) is regulated in the Norwegian constitution and its assets date back to the Middle Ages and the presence of the Roman Catholic Church in Norway.The fund is an independent legal entity, with the majority of assets in real property and financial assets.
Sustainable administration in accordance with church values
The aim of 'Opplysningsvesenets fond' is to increase wealth for the Norwegian Church. In managing property and financial capital for the fund, we are committed to taking into account ethical, cultural heritage and environmental considerations. We also strive to ensure that the administration is commercially justifiable. Therefore we have:
About Ovf and yearly summary 2015
One of the fund’s major obligations is to provide homes for the Norwegian Church’s clergy. Ovf owns 408 vicarages, including bishops’ residences. 150 of these residences are listed cultural heritage properties. The total area of the buildings, including garages etc. is approximately 197 000 square meter. Over the last five years, more than 330 vicarages have been upgraded and refurbished.
By the end of 2015, Ovf had close to 7 000, of which approximately 5 000 are let for residential and leisure purposes.
Ovf has a total of 156 farm leases. 130 of these are purely land leases for agricultural purposes. The 26 working farms are primarily kept due to their cultural and historical heritage importance.
Cultural heritage properties
The long history and foundation of the fund has resulted in an extensive portfolio of cultural heritage properties. Ovf’s strategy is to maintain this portfolio.
Ovf owns 89 500 hectar of forests and uncultivated land. Nearly 60 % (50 200 hectar) is operated as commercial forestry. 88 000 m3 of timber is felled in the course of 2015, 4 % less than the previous year. Regeneration through growth and replanting of the forest accounted for approximately 124 000 m3 in 2014. Total forestry income was NOK 39 million in 2015, same as the previous year.
Real property and estate development
Ovf is working with a portfolio of 50-60 property development prospects, including a few real estate developments. The main purpose of the property development is to regulate the sites before selling them. Some major sites, in high value areas, are to be developed and kept with a view to further increasing the fund’s annual operational cash flow. Many of the projects are to be transferred (sold) to Clemens Eiendom, Ovf’s wholly owned subsidiary.
Clemens Eiendom is a real estate company which is engaged in commercial development of Ovf’s properties. Clemens Eiendom is also the manager of Ovf’s commercial real estate properties.
Small Hydro-Electric Power (HEP) plants
Small Hydro Electric Power is a business area that exploits Ovf’s waterfall rights. The business area is organized in its own division; Clemens Kraft. Clemens Kraft AS, has partial ownership in 16 operational power plants. Ten power plants will be under construction in 2016 with the intention to further increase the portfolio in the years to come. Clemens Kraft is a leading player in this field in Norway.
Ovf provides not only IT solutions and services for its own organization, but also for other church related organizations such as the National Council of the Church of Norway and the Diocesan councils, among others.
These services are performed by Kirkepartner IKT, an Ovf subsidiary and a company central in realizing the Norwegian Church’s IT strategy. By year-end this company served approximately 1 100 clients with the strategy to offer IT services to all church related environments.
Grants for ecclesiastical purposes
Pursuant to section 2 of the Act governing the Norwegian Church Endowment, Ovf’s activities shall benefit the Norwegian Church as a whole. Grans and contributions are given in various forms, both financial and in terms of the endowment maintaining homes for clergy in the Norwegian Church. The Endowment provides services of various kinds which the recipient does not pay market prices or cost absorption prices for.
Total disbursements of the Norwegian Church, including the rehabilitation of housing for the clergy, amounted to NOK 129 million in 2015, compares to NOK 130 million in 2013.
In 2015, Ovf spent a net NOK 56.6 million on managing homes for the clergy. This figure includes operating costs, maintenance costs and upgrading costs, adjusted for rental income.
Ovf is offering better-than-market loans to church related purposes and has per 2015 almost NOK 85 million in outstanding loans. The benefits in kind amounts to NOK 1.5 million as a result of subsidized interest margins. Ovf has also contributed directly by way of financial support in order to establish the Kirkepartner companies so that the Norwegian Church’s IT strategy can be realized.
In addition to the benefits mentioned above, the Endowment has made various financial contributions for ecclesiastical purposes. In 2015, these aggregated to NOK 71.5 million. These financial contributions comprise contributions for ecclesiastical purposes and contributions to country council owned rectories/clergy homes. The financial contribution for ecclesiastical purposes in 2014 was adopted in the national budget for that year.
In 2015, financial terms contributed a book profit of NOK 81.2 million compared to NOK 174.2 million in 2014. The fall in net financial result was mainly due to strong development in the investment portfolio.
Summary of annual accounts
Ovf’s net operating income was NOK 397 million in 2015, up from NOK 359 million in 2014. Operating costs totaled NOK 327 million, an increase of 16 % from NOK 280 million the previous year.
Ovf’s net income in 2015 was NOK 151 million, down from NOK 254 million previous year. This was mainly due to weaker results from Ovf’s financial portfolio.
(Amounts in NOK 000s)