Annual Council report says strong US dollar still impacting Church’s budget and tithe.
Published on: 10-18-2017
The chief financial officer/treasurer (CFO) of the General Conference (GC) encourages members to return to systematic giving and increase support for stewardship ministries. “Since the 1980’s the emphasis in stewardship has somehow dwindled,” Juan Prestol-Puesán, GC CFO, told members of the Executive Committee during the 2017 Annual Council. “Teaching giving is out of fashion. It’s not something that attracts. It is a lot more attractive to give to projects.”
This refocus on stewardship and systematic giving began in 2015 when the Adventist Church’s executive committee approved a plan for the General Conference to pay the salary, benefits and travel of a stewardship director for each of the Church’s 13 world regions, called divisions.
In September 2017, stewardship directors met at the Seventh-day Adventist Church World Headquarters for an advisory on how this focus impacted their regions. What emerged from this conversation was the fact that stewardship directors, although committed to strengthening this function of the church, faced many obstacles. Some needed further orientation and support from their division officers; others desired to be involved in interdepartmental activities. Some suggested stewardship should be taught at all levels—from primary school to seminary—and many asked for prayer and support as they receive little cooperation from local pastors.
Prestol-Puesán praised the fervor of the stewardship group and championed their commitment to systematic giving. He appealed to church members to return their tithes and offerings faithfully. “The Church doesn’t depend on big project givers,” he said. “It depends on the John Doe’s and Mary Jones’ who sit in the pew and give faithfully of their tithe and offerings. They are making the journey of the church possible. That’s who we are.”
Prestol-Puesán went on to say he supports project giving, but only when systematic giving is strong.
One of the biggest challenges the Church has faced in the past few years is the strength of the US dollar against other currencies, like the EURO or Brazilian Real. More than half of the church’s income comes from outside of the United States. Prestol warned, even though the dollar has weakened against some of these currencies, that can change quickly. “You only need one or two events to happen in the world and immediately that balance is altered,” said Prestol. “We are sensitive to it; we are vulnerable because of it. When that happens, it effects our finances immediately.”
The report also highlighted the budget for 2018 which included a 3.4% income reduction for 2018 (5,750,000 US dollars) and is partially offset by reduction of allocations of 2.1%, or 3.85 million dollars.
Historically, the budget is projected at the same amount of income from two years prior. The Church has continued that practice for the 2018 budget, with a few changes. This year treasury has calculated the amount to the local currencies instead of the US dollar. This allows treasury and the divisions budgets to remain consistent. In 2016 there were 53 Sabbaths instead of 52 so the budget has been reduced to reflect one week’s tithe (reduction of 1.9%) and as approved in 2012, the tithe percentage contribution from the North American Division will be reduced by 0.25% to 6.35%.
As with last year, the current 2018 budget is put together with the assumption that the current US dollar strength is temporary in nature and that it will weaken within the next 12 to 24 months, as the result of normal trade, economic and cyclical patterns. If this does not happen, the Church will be forced to implement structural and systemic changes within every portion of the budget.
Events and activities impacting the 2018 Budget:
Several events have also impacted the 2018 budget. In early September of 2017, the North American Division moved to their own office building. Within days, the General Conference started the process of renovating the space they occupied. Several departments and entities will be moving to different areas within the General Conference building. However, Prestol made clear that no tithe and offerings will be used in this renovation. The money comes from a separate fund that has been carefully saved and put aside.
Another impact on the 2018 budget is the sale of the Review and Herald property in the US state of Maryland. In 2010 the General Conference acquired a little more than 47 acres of land valued at 11 million dollars. At the time, this transaction prevented the Review and Herald from going deeper into debt. However, after the closure of the building and dismissal of the workforce, the property was put on the market. Unfortunately, because of market conditions, recuperating the entire amount paid is not a realistic expectation and will result in the lowering of working capital at the end of 2017.
An action taken during this year’s Treasurers report was to divide money from certain offerings between two of the Church’s media outlets. Adventist World Radio has long been a recipient of offering and systematic giving, while the Church’s other media outlet, The Hope Channel, has not. Members of the Executive Committee voted to evenly split the percentages previously allocated to Adventist World Radio (0.75% within the World Budget Offering used in the NAD and the 2.35% within the Combined Offering Plan used in most other divisions) between the two media entities, with each entity receiving 0.375% of the former and 1.75% of the latter. It was made clear that any offerings marked clearly by the donor for a particular organization would not be impacted—the split in the allocation only affects the World Budget and Combined Offering allocations.
The expectation at the end of the fiscal year is for the Church’s budget to reach a break-even point. However, that would mean a significant increase in tithe in North America to make up for the 53rd Sabbath in 2016 and keeping steady with expenditures at the World Headquarters.
Prestol outlined the financial management philosophy of the General Conference Treasurers as follows, “We see ourselves as stewards of the financial resources entrusted to this level of the Church,” he said. “We will endeavor to maintain its working capital and liquidity levels in order to be of assistance to the mission of the Church worldwide.”
Prestol continued, “A weak and decapitalized General Conference is of no use to the Church. We seek to arrive at the General Conference session in Indianapolis in 2020 with an entity that is positioned to fulfill the mission of the church for the ensuing term.”
In his closing remarks, Ray Wahlen, undertreasurer for the General Conference, assured the members the Lord was leading. “Despite the financial challenges we face, I’m grateful to the for the financial resources the Lord has provided to us, in advance,” he said. “I firmly believe the Lord will give us every penny that we ever need to accomplish the assignments He gives to us in spreading the good news of His soon return.”