By Ronald Kelly
By Ronald Kelly
October income was $1.86 million, up from last October’s income of $1.75 million. So we continue to maintain a stable donation base.
However, expenses for October, as has been the case most of the year, exceeded the income by several percentage points. Almost every month I have mentioned that our 2003 financial picture has been positive because of a litigation settlement and the sale of selected peripheral properties that were not to be included in the development plan. This has made it possible to maintain our current level of salaried pastors, employees, programs and services.
Now, with 10 months of the year completed, we have used the reserve fund to the point we are at the same level at which we began this calendar year. We are thankful that this has been a year that gave us a little financial breathing room.
Discretionary assistance funding
In keeping with our policy of not using member donations to fund either our discretionary assistance program or our property holding and sales costs, the church has obtained a line of credit under favorable terms to cover these items on a moving-forward basis. We made this move after careful consultations with, and on the advice and aid of, third party financial experts who are familiar with prudent practices on such matters.
The line of credit will be drawn upon only as needed and will be repaid when the Pasadena property sale has been completed. This means that member donations will not be used for these three expense funds (property sales expenses, campus maintenance and upkeep and our discretionary assistance program), but will rather fund only the operations of the church, including funding all of our local congregations (by far the largest expense of the denomination), maintaining our international headquarters, our international missions, district supervision, youth activities and regional conferences.
On the whole, this is good news. However, we must still make important decisions. A primary requirement for this funding program is that the Worldwide Church of God must present and maintain a balanced budget for 2004. In other words, the expenses-for-operating-the-church side of the expense ledger cannot exceed the income received by the church.
Those of you who regularly read this monthly financial update know that for the past several years we have spent considerably more than income. We have been able to maintain an appropriate reserve level because we had properties, equipment and furnishing to sell.
Next year, we will not have these options and will balance our expense budget to match projected income. Even though we can now plan a balanced budget, it will be necessary, in order to achieve that balance, to carefully evaluate our expenses.
Preparing budgets
Our department managers have been hard at work preparing budgets to present to the church board of directors. In order to achieve a balanced budget we are planning to: (1) Slightly reduce the number of regional conferences and reduce the number of days for each conference; (2) Two district superintendents reaching their retirement years will be enrolled in the discretionary assistance program and will not be replaced, thus district boundaries will be restructured.
(3) Selected church areas, for example two congregations in the same city, might be combined into one (this will only impact a few congregations); (4) New church circuits will be created allowing some of our pastors to serve two or more congregations in a circuit; (5) We will not be able to maintain the level of financial contributions to international missions, but we will be able to fund our five mission development programs; (6) A few employees who have reached a normal retirement age might be enrolled in the discretionary assistance program and, if so, will not be replaced.
(7) A small number of pastors are evaluating transferring to other careers and being replaced by either a bivocational pastor or a nearby pastor joining the congregation in a circuit; (8) A few pastors who serve congregations or circuits that are unable to financially meet their expenses will seek part-time employment outside of the ministry and serve as what we call dual-career pastors, meaning the church will continue to pay a portion of their salaries plus their fringe benefits, allowing them to work part- time in another job to supplement their wages.
These budget-reduction plans minimize staff reductions that are often necessary when corporations downsize. Of course we may have a few reductions in staff as we complete our plans, but the major savings are a result of the points mentioned above.
As you can imagine, we have had a challenging month working on financial packages, projecting income and planning expense budgets. We trust that as we enter 2004, we will continue to enjoy a stable and prudent financial plan. Thank you so much for your prayers, concern and love as we all partner together to serve in the work of the church.
Copyright © Grace Communion International, 2003