Budget Shortfall of 20 Percent: GC Committee Meeting
From ANN and APD, April 18, 2016: The instability of the global economy, particularly the weakness of the United States Dollar in currency exchange rates, resulted in the General Conference of the Seventh-day Adventist denomination receiving about 20 percent less income in 2015, reported Pastor Juan R. Prestol-Puesán, chief financial officer, at the spring meeting of the denomination’s governing body last week in Washington DC. Consequently, the budget adopted last fall for 2016 must be revised, he told the GC executive committee.
The governing body of the global Adventist denomination meets twice a year. Policy items and major programs are on the agenda at the annual meeting in the fall and financial items are the major focus of the spring meeting, providing opportunity to tweak spending plans for the new year.
“My fears … came true,” Prestol-Puesan reminded the committee that he had cautioned the group about market uncertainties that might lead to losses on October 12 last year at its annual meeting. While giving remained strong worldwide, fluctuations in currencies resulted in an income loss of $19.4 million during 2015. (18.7 million Swiss franc or 17.2 million euros) The GC operates in U.S. dollars, but 53 percent of its funds come in from other currencies.
The reduced income came from three of the denomination’s “divisions” or regional organizations the financial statement indicated: The Inter-American Division due to a banking crisis in Mexico; the Southern Africa-Indian Ocean Division due to a decline in the value of the South African rand; and the Trans-European Division where there was a continuing decline in tithe revenues.
It is also true that other Protestant organizations in the United States with similar numbers of missionaries supported around the world in partnership with overseas Christians have had to make even larger budget adjustments. The Southern Baptist Commission World Mission Board, for example, has announced that large numbers of its missionaries are being brought back home or cut loose from its financial support.
Prestol-Puesan recommended to the leadership group that $9.9 million be taken from a reserve fund and put into the 2017 budget if the declining income continues through 2016. (That is 9.5 million Swiss francs or 8.7 million euros.) The 2017 budget for the GC will a very difficult one to prepare in any case “given the number of programs and commitments that we have,” he said. “Our approach to budgeting and finances for 2017 is one of caution, prudence, and common sense,” he stated. The 2017 budget will be initially voted at the annual meeting of the committee in the fall of 2016.
The Adventist denomination has a particularly complicated financial structure. The major source of its income is from the practice of tithing, followed by a strong majority of its nearly 20 million members around the world. They give ten percent of their personal income and these donations are largely managed through a Tithe Fund which is shared between the local conferences who cover the salary and benefits of pastors and underwrite Adventist schools, the union conferences and the GC, including its divisions. In North America, at least 85 percent of the Tithe Fund is consumed by the local conferences. Roughly half of the remaining 15 percent is used to support missionaries overseas.
What makes the system very difficult for the average member to understand is that a number of offerings and countless personal donations go to many other projects, agencies and special funds. On top of which, there are many programs and policies whereby various units of the denomination and even independent organizations share the costs, as well as necessary pooling of operations for things such as retirement plans for ministers and teachers where it would be impossible for a number of units to meet legal and fiduciary requirements separately.
Concern has been expressed by a number of analysts that as the growth of the Adventist faith move more and more into the southern hemisphere and developing nations, this complex financial structure will become more and more difficult to sustain. If the average income of Adventist givers is declining and international exchange rates bleed off the value of their giving, then situations such as confronted right now by the GC executive committee will occur more and more often.
“Major systemic changes may have to be made,” a retired church administrator told Adventist Today. “But the Brethren hate to do that. They generally prefer established policy and traditional methods over new arrangements. Unfortunately, that is not always the best way to deal with economic change.”
The GC executive committee also devoted time to hearing reports about urban mission strategies in each of the divisions, as well as new missions in areas where there are relatively few Adventists. Three new appointments were made in key leadership roles for the denomination as Adventist Today has already reported in separate news stories. Several items of less importance were also on the agenda as the meeting wraps up.
The Adventist News Network is the official news service of the denomination and APD is the Adventist news service in Europe.