Update from Finance & Planning

February income totals
still not complete

By Ronald Kelly

This month we continue our good-new-bad-news scenario. The good news is that we are receiving thousands of offering envelopes at our denominational processing office in Pasadena. The bad news is that we don’t have sufficient staff to keep up with the workload.

As I reported income for January in last month’s WN, we got behind with the considerable increase in mail from December. For receipting purposes that mail had to be completed before we could tabulate January donations. We were behind almost two weeks by the end of January.

Two part-time employees have begun to help us process the mail. As a result, when we closed the accounting books on February, we were down to about a seven-day backlog. Our staff members feel confident they will be caught up by the end of March and the close of the first quarter of the year. We want you to know that prompt and accurate processing of donations has always been, and remains, a high priority.

Because of the unprocessed mail, our financial picture might at first glance seem a bit discouraging. For example, total income from all sources is running 21 percent below the same two months of 2001. But last year we were not behind in processing. So those seven or eight days could make up much of the difference.

Also during some months, higher income from estate donations will affect our finances. So far this year, we have not received quite the same amount as last year. And last year we auctioned many of the furnishings and contents of buildings no longer being used as a college campus or church headquarters.

However, we are now down to one building and will not be able to hold another auction until we relocate to new facilities.

So far this year we have banked $2.6 million in member donations. We have also received about $360,000 in other income for a total of $2.9 million. On the expense side of the ledger we have spent just over $4.4 million.

So already this year we have had to take almost $1.5 million from reserves. You can quickly see, even if we had been caught up with mail processing, we would still be dipping into the reserves at a greater clip than we would like.

Church administrators and board members monitor these figures on a regular basis. Obviously there is a limit to how much can or should be taken from reserves. So, as I write this month’s copy, we are discussing ways to trim expenses. Such meetings are difficult and emotionally draining. Making cuts almost always means termination of employees, however, pastors will not be terminated unless income from a congregation does not support a pastor. Cuts might include reduction of some worldwide activities and local programs that have long been part of our work to proclaim the gospel around the world. So we solicit your heartfelt prayers for the challenging evaluations that are essential to maintain a healthy financial footing for the church. We are committed to maintaining that financial well-being even though distressing choices have to be made.

The accompanying charts give you a snapshot of February figures as well as year-to-date figures for the first two months of the year.

How long we continue with our current financial procedures rests in the hands of Pasadena city officials. As the Legacy Partners development plans are evaluated by more and more Pasadena residents, more and more people are offering input. Some object to the project. Others strongly favor the development plans. Two or three times a week, articles and letters to the editor appear in the newspaper. Again, some actively support the project, others oppose it.

In the political world of city government, each side has to be given opportunity for input. At the final city council meeting in February, the mayor noted that such input would probably take many more months. Because Legacy Partners’ had targeted late March as the date to obtain final city approval that would allow escrow to close on the property, we were all greatly discouraged by the now-likely result that these procedures will probably drag on through the end of 2002.

I mention this, not to discourage you, but to keep you informed regarding the activities and finances of the church. It’s a lot more fun to report exciting and good news, but it’s equally important for you to have the best and latest information possible.

Our future is in the hands of a loving God. He could intervene in countless ways to resolve our problems. But sometimes, as he is doing now, he allows the normal course of events to take place. Through it all we develop patience and exercise faith.

In the case of the work of our church, God uses each and every one of us to work together to maintain stability for the church. We all see wonderful opportunities to advance the work of the church in the future. We just have to be patient and wait upon the Lord to get us over these current obstacles. Again, we cannot thank you enough for your dedication and willingness to sacrifice for the good of our denomination.

Next month I hope to have a more complete financial analysis for the first quarter of the year. And we’ll keep you posted on the work of the Pasadena city officials as well as the decisions we have to make to reduce our expenses.

Statement of Income and Expenses for

WCG and PTM combined for February 2002

For the Month For the Year-to-Date

Income

Mail Income $ 1,704,000 $ 2,605,000

Other income 106,000 364,000

Total income 1,810,000 2,969,000

Expenses 2,314,000 4,464,000

Net gain (loss) to bank reserves $ (504,000) $ (1,495,000)

Copyright © Worldwide Church of God, 2002