Update from Finance & Planning

August income
holds steady at projections

By Ronald Kelly

PASADENA—Once again, we have closed a month with member donation income right at our forecasts.   August contributions totaled $1.44 million, and we had estimated income at that same amount. When all the dollars and cents are calculated, we actually received $272 more than we expected.

Donations down from last year

However, I do want to keep you informed that August donations this year were down just over 11 percent from August 2002. Obviously that statistic is a concern to us. If income continues on a negative scale, we will have to make even greater reductions in our projected expense budgets for 2004.

I have mentioned throughout the course of this year that we expected 2003 to be a year of positive cash flow. The reason for this is the continued sale of selected parcels of property that are not part of the proposed development plan for the campus sale.

In early August two peripheral properties closed escrow—the tennis courts on Del Mar Boulevard and a small parking lot adjacent to what was once our Transportation Department. These sales brought a cash gain to our reserve fund for 2003 of just over $2 million.

2004 budget planning

We are now hard at work on a 2004 budget that balances income and expenses based on projected donation income. In late August our headquarters staff met with our international mission development team and our U.S. district superintendents in the desert city of Palm Springs. By meeting in the hottest month of the year, we obtained attractive room rates that included the use of conference room facilities.

This was a wonderful week of meetings, camaraderie, fellowship and discussions. We are blessed with a great group of men and women dedicated to serve our congregations around the world.

In some of our meetings, we had animated discussions about church income and budgeted expenses. In order to achieve our goal of a balanced budget, I mentioned last month that we would divide our expense funding into two categories: 1) Expenses attached to the maintenance and sale of the campus and 2) expenses for the denomination’s congregations, ministry, missions and headquarters operations.

Sales fund property upkeep

This second category will be funded by the regular contribution income of members and co-workers. The first category will be separately funded from peripheral property sales and other funding packages we are in the process of developing. In other words, member donations will not be used to fund the maintenance of the campus and costs attached to the property sales.

We actually have been using property sales revenues and other sources of revenue to fund the expenses of maintenance and sales. However, because all of our expenses have been in one package, we never thought to break them out into these separate categories.  

I realize that some associate their donations with mowing lawns, paying utilities and maintaining the Ambassador campus. So it might help to know that because of selling the former Big Sandy campus, the Orr, Minnesota, summer camp and other parcels, those funds have more than paid the expenses of campus maintenance and property sales.

Maintaining services

In addition to these costs, property sales have made it possible for us to maintain other programs and services attached to the work of the local congregations and service to pastors. Thus, member donations have only been used to fund our local congregations and our employees in Pasadena who serve on behalf of the denomination.

During the rest of 2003, in order to maintain our current level of service, programs and employees, we will continue to use the reserve fund on an as-needed basis. I mentioned above that we have added just over $2 million to our reserves between January and August, but I expect we will use a portion of that overage during the final quarter of the year.

In the meantime, we will be working on the 2004 budget and coming to some difficult decisions on balancing that budget with our projected expenses. Please continue to pray with us for God’s guidance and wisdom. Your prayers and concern mean a lot, and when we hear how many of you are so faithfully praying for us, it is indeed encouraging. And we in turn continually hold you up in our prayers to our loving God.

Copyright © Grace Communion International, 2003