Greetings from the Treasurer's office.
By now you have probably become very familiar with the format I use here each month, so I will launch directly into the report without background explanation.
As the attached chart shows, the daily average mail income for July was slightly less than $119,000. This is the lowest month so far and is marginally less than the budgeted and hoped for daily average of $122,000.
Nonetheless, when the monthly daily average is itself figured into the yearly daily average, the result is still $128,882 and thus slightly above our yearly target. In short this means that although July income was less than the targeted amount, the year itself is still within projections.
As I have said a number of times, we are not at all surprised to find that the summer months are our lowest income performers. Although we don't like to see a slump, a bit of a summer dip is expected. However, it is critical that income pick up for August and then for the rest of the year as we have come to expect and plan for. Otherwise we might not remain within budgeted projections, and a cash crunch could result.
In summary, July was a poor performer, but such a decline was not unexpected as the summer drones on. We are within projections and can remain on target if, as is hoped and expected, income begins to increase again. Please pray that income climbs upward again. Thank you for your continuing support.
I very much appreciate the Local Income and Expense Reports you send to our church area each month. Have you gotten any feedback from members and ministers about them?
Yes, we have had a fair amount of feedback. From most reports I have heard, the Local Income and Expense Reports have been helpful.
I believe they have served well to educate ourselves about where monies come from and where they go.
Many of you have complimented us for the thought and effort that has gone into the report. On behalf of all involved, thank you for your encouragement and feedback.
On the other hand, I have noticed at least one unintended consequence of the reports: They can, if we are not careful, create a misunderstanding about the nature of the church's finances.
To make sure all members and ministers are fully informed about our financial matters, I want to take a moment to explain what I mean.
As you know, we have a centralized financial system. Money is donated to the church headquarters from all over the country, without regard to where it comes from.
Monies are spent based upon our perceived group priorities and needs, according to a budget that serves to fund the priorities and needs, but not according to where the priority or need is geographically.
This ability of the church to collect monies from wherever people are and send it to where the greatest need and priority happen to be, is one of the greatest strengths of a centralized system.
For example, we have for many years had certain churches that gave a lot of money into the member assistance (formerly called third tithe) fund, although they themselves had few needy persons.
On the other hand, we have had certain churches that gave little into the assistance fund, but which, by virtue of location or happenstance, had a lot of needy people.
Our ministers informed us of the need, and we allocated the assistance accordingly. This means those who could help the needy did so even though the needy person wasn't in their church area.
Another example is ministers' salaries. Our ministers move from congregation to congregation over the years, and, for the most part, their salaries are not diminished because they are moved to a smaller church (which may be troubled and need the benefit of their seniority and expertise). In a decentralized system with local salary payments, their salaries would probably be reduced.
Now, back to my point. As I said, the Local Income and Expense Report, while valuable, can create a wrong impression if its purpose and nature are not understood in context.
The report shows local income and expenses, and it could therefore be inferred that our church is decentralized, but with centralized funds processing only.
That is, the report can imply that monies come from the local church, flow through the central processing plant (headquarters), and then flow back to the local church in an amount proportionate to the giving of the local area. This is of course not true.
It is true that monies flow between us--from the local church to headquarters and back to the local church. But it is not true that they flow back to where they may have come because they came from there, nor in proportion to the giving from the area.
Rather, they flow back to where the group needs and priorities are.
The implications of understanding this are far reaching. They answer the question some have asked about why larger churches don't get back a greater proportion of locally contributed funds for rent, ministers' expense, or evangelism, than the smaller ones.
It is because our money comes from everywhere and goes wherever the group-defined need or priority happens to be. (Right now, with our greatly reduced income, just meeting our salaries and basic bills uses up almost all the monies).
Sometimes the need or priority is in a bigger church, sometimes in a smaller one, and sometimes here at headquarters. But, wherever the money goes, it goes there because the need or priority is there, not because the money came from there.
In summary, the Local Income and Expense Report gives some important insights into local giving and local and general expenses.
But it is a stylized view of our finances to some degree. Because it gives local numbers it implies to some that the money should flow from its source to headquarters and back in direct proportion to where it came from.
In fact the money comes from the whole membership and goes where the group need or priority is, in proportion to the strength of the need or priority.
We have a centralized system that has certain advantages (and, arguably, disadvantages, of course) and that is how a centralized system works.
Thank you for your interest in the Church's financial system.
August 19, 1997, WN page 10
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