The Baptist World Alliance executive committee heard good news and bad news about the organization’s financial situation March 3-4.
Meeting for its semi-annual session at the BWA offices in Falls Church, Virginia, the executive committee heard General Secretary Neville Callam report March 3 that giving to the general fund was down just 2.6 percent in 2008, to $1.09 million, despite the severe economic downturn. Meanwhile, he said, expenditures were held to 4.6 percent below budget.
Callam expressed deep appreciation to member bodies, churches, and individual donors, whose total giving reached $1.71 million. Callam said the BWA “ended the year in a much better position than we thought likely in late September 2008.”
Despite sustaining “enormous damage to our investments,” he said, BWA staffers “took steps to reduce spending and sought divine guidance for securing the continuance of the work to which we have all committed ourselves through the BWA.”
That was the good news.
A Budget and Finance Committee report the next morning elaborated on Callam’s allusion to investment damage and led the executive committee to approve a decrease of $862,000 – about 29 percent – to the previously approved $2.97 million budget for 2009.
The BWA’s budget of $2.81 million for 2008 anticipated income from several other sources, including previous donations that are in restricted accounts. The book value of those donations declined by $1.6 million, or 36 percent, during the first three quarters of the year, and the committee began divesting equities from its portfolio in order to protect the remainder. Losses continued into February before all stocks could be sold, however, totaling $2.35 million in 2008 and more than $200,000 in January and February.
BWA officials said accounting regulations do not allow restricted funds to decline in value, so it was necessary to transfer more than $2.3 million from unrestricted reserves to the operating fund during 2008 in order to protect the restricted funds. An additional $191,000 was transferred in January and another transfer is expected for February, leaving reserves very close to $500,000. That’s down from more than $3 million that had accumulated during the previous five years. BWA policy requires that a minimum of $500,000 be retained in reserves.
With little or no anticipated investment income for 2009 and a best-case scenario of flat giving from donors, the budget committee anticipated an $862,000 shortfall for the fiscal year. The executive committee adopted a motion to reduce the budget by that amount, along with an additional motion to increase spending proportionally if additional sources of revenue are found.
Ellen Teague, BWA’s finance director, said staff members will review and prioritize ministry plans for the year and develop a new budget to recognize the reduction, which leaves the budget at $2.11 million.
As executive committee members expressed concern about the potential impact of such reductions, investment committee chair and former treasurer Clem Gimbert underscored the new reality. Because of the financial situation, he predicted, “BWA is going to change, and maybe in some radical ways.”
BWA president David Coffey echoed the concern: “This is a very sober moment in the life of our BWA family,” he said.
Callam said BWA leaders have come to realize the need to build a much larger donor base and encouraged those who know the organization best – including those who were in the room – to set an example through financial contributions.
In other business, the executive committee voted to recommend Raimundo César Barreto Jr. of Brazil for the newly approved position of Director of the Division of Freedom and Justice, and named Leena Lavanya of India as the 2009 recipient of the Denton and Janice Lotz Human Rights Award. I’ll post more information about their intriguing stories on Friday: they deserve more than being buried beneath a gloomy financial forecast.
Professor of Old Testament at Campbell University Divinity School in Buies Creek, North Carolina, and the Contributing Editor and Curriculum Writer at Good Faith Media.