Another month has passed, and it is time again for my financial update.
In May income fell to the lowest level in recent history to a daily mail income average of only $124,332.
While this number is sobering, it is within the budgeted daily income average for the year of $122,000.
Contributing to a positive scenario overall is the fact that we have lowered expenses more than $10 million from last year.
Since income is holding within projections (although in real terms it is about 20 percent less than last year), and since we have cut expenses, we have collected a small gain to reserves so far this year.
We are likely to need this small cushion because, even though expenses are down overall, a few will be over their projections for unavoidable reasons.
Also, the summer is young, and, if our past experience is any indicator of this year, the summer months might tend to pull down the income averages and thus eat into our cushion.
I ask each of you if your giving could remain constant this summer. Doing so will greatly help the church.
In summary, income is down a bit, but within projections and more or less stable. I credit this stability, by the way, to the pledge system and the generous and faithful giving that comes from you members. Thank you from the bottom of my heart.
On a personal note, my daughter and son-in-law continue to keep me posted on the far-too-quick growth of my grandchildren. My wife, Arlene, and I are excited because plans call for us to visit them the last part of June, and then, a week or two after that, my daughter and the twins are coming to Pasadena for about two weeks.
I tell my daughter not to let them grow up too fast, but I get the suspicion I am being ignored. Oh well.
I am going to try and be humble when the kids get here, and all my friends tell me how cute they are and how they wish the twins were their grandchildren. I will try to be humble, but it will be hard.
You always give details about income in your monthly report, but you don't always give much detail about the expenses. Where does all the money we send you go?
I will be pleased to give you detail about expenses. To do this, I will from time to time submit expense reports with the regular income report. Then, I can comment on each report.
This month I include the accompanying graph of operational expenses for 1990 (actual) to the present (projected for this year since the year isn't over).
Expenses (and income since they are closely related) are about $120 million less this year than at our highest income and expense years.
And, this year's projected income and expenses are about $38 to $40 million--about one quarter of the highest figure.
The money sent here, while considerable, is only one quarter of what we used to receive. Some think that our cuts in local expenditures such as church hall rental was so headquarters could use the money here. As the chart shows, such is not the case.
The chart will show a drop of $120 million in income each year until income goes back up.
This means that the church as a whole is quite a bit smaller than it used to be, in financial terms. We are a small organization,
In fact, three or four super-congregations in some denominations may have incomes higher than our whole U.S. operation.
Though we are small financially, we still have more than 400 local congregations in the United States.
The reason for this is our history. Our churches sprang from a media ministry instead of being neighborhood churches.
We are happy to have each congregation. However, this number is disproportionate to our size and creates a resource allocation problem, a problem that would exist under any type of church organization structure.
Here are some other facts about the expense chart.
First, while media expenses once competed with Church Administration for being the largest expense category, such is not the case now.
Church Administration is by far the biggest expense category of the church. The majority of these expenses are for pastoral salaries and other field expenses. This shows that when income fell, the headquarters operation was cut to the bone in favor of continued support of field operations.
Second, media expenses were once as high as $54 million a year. This is more than the combined expenses of all categories now.
The media expense figure on this chart includes expenses that are offset by income from PTM. If media expenses offset by income from media were removed, their expenses would fall by about half.
Even then, within the media budget are numerous functions necessary for the church and which the media area only manages for the church. Thus, the real amount of their budget is probably less than a million dollars annually.
Third, even though we are at a base level of expenditures for the facilities, which is higher than we would like (because of the size of the facility), facilities expenses are dramatically reduced from their highest years. They probably cannot be reduced further and still meet the minimum maintenance necessary for proper prudence and safety.
And, finally, Finance and Planning expenses continue more or less unchanged because this area includes certain overall corporate expenses related to the other areas, including health care costs for the ministry and other employees, discretionary assistance to retired employees and liability insurance.
Some of these expenses will remain the same or grow until the property sells and a pension plan is funded.
June 24, 1997, WN, page 5
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