Wednesday, February 11, 2009

Church of the Brethren faces challenging financial situation.

The Church of the Brethren is facing a challenging financial situation at the start of 2009, according to the church’s finance staff. The denomination has recorded a total net loss of $638,770 for the year 2008 (in pre-audit figures).

A cluster of factors have brought about the situation, including loss of investment value, higher costs for fuel and utilities that have increased travel budgets and mission expenses, the exchange rate for the US dollar, and a decrease in donations from individuals and congregations.

The loss in value of the denomination’s investments is one contributing factor. As of the close of 2008, the Church of the Brethren had unrealized market losses of about 35 percent of the value of its total investments, coming to a little more than $4,863,900 (in pre-audit figures). This loss of investment value will continue to affect the church’s budget in coming years, staff reported.

However, a financial strategy to level the amount of investment income the denomination actually takes in each year has helped protect the church from what might have been a more severe loss of income in 2008. The denomination currently takes the average of the past five years of investment balances in any given year.

Expenses budgeted for 2008 have proved to be realistic, but a budgeting practice for anticipating giving may have been overly optimistic. For several years, a practice for calculating what to expect in annual giving from congregations has linked expectations to a high water mark set some years ago.

Although giving from congregations and individuals has declined, the decline has not been as sharp as it might have been given the gloomy state of the economy. The rate of giving may show a continuing commitment to denominational work, even as members and congregations face their own financial difficulties. The total in giving from congregations and individuals came to $3,611,460 in 2008, representing a decrease in giving of $150,560 or only 4 percent of the actual donations received in the previous year (in pre-audit figures).

Factors posing financial challenges also include the sharp rise in gas and fuel costs experienced last year, which in turn affected the costs of utilities as well as food, travel, and other expenses. The low value of the US dollar has made international mission work more expensive, in countries where costs of goods and services have increased for mission staff and sister churches.

In another financial note, the New Windsor (Md.) Conference Center at the Brethren Service Center experienced a loss of $201,040 in 2008 (in pre-audit figures). The loss came from the conference center’s self-funded budget and did not affect the core ministries of the denomination. The loss is attributed to many groups canceling bookings as the national economy fell.

The denomination’s loss for 2008 has been able to be absorbed by net assets that had been built up over the last five years. General secretary Stan Noffsinger has called on staff to seek new ways to cut expenses and to trim spending from their programs in 2009. "We want the best thinking that you all can give to face this situation," he told staff at a recent meeting. Plans for capital improvements at the denomination’s main facilities in Elgin, Ill., and New Windsor, Md., are being revisited as well, among other measures.

"Our big concern now is that giving is behind already for 2009," said treasurer Judy Keyser. "It’s not just the 4 percent of last year. If the shortfall of giving continues at the current rate, it’s something like 13 percent. We’re carefully considering what the impact will be on both the 2009 budget and further years. Adjustments to the 2009 budget are expected at the March board meeting."

Executive staff will bring options for action to the Church of the Brethren’s Mission and Ministry Board at its next meeting on March 14-16, to be held at the Brethren Service Center.

Source: 02/11/2009 Newsline

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