News Archives

Financial cloud lifts as NCC drops debts, doubles assets

10/1/2003

By Linda Bloom*

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National Council of Churches logo. Photo number W03025, Accompanies UMNS #467
NEW YORK (UMNS) - The National Council of Churches is debt-free and has doubled its assets in the past year.

That was the news from the council's 2002-03 fiscal year, which ended in June. The budget audit was shared Sept. 30 with members of the council's executive board.

The Rev. Robert Edgar, a United Methodist who serves as the NCC's chief executive, said it was a "historic moment." He reminded the board of the situation four years ago, when the financial crisis was so great that the United Methodist Commission on Christian Unity and Interreligious Concerns temporarily suspended funding from the denomination until assured that a viable recovery plan would be implemented.

The suspension eventually was lifted. Various denominations, including the United Methodist Church, pledged a total of $2 million to help stabilize the ecumenical agency's finances. With action by the council - ranging from a significant staff cut to aggressive solicitation of donors to the streamlining of business functions and accounting procedures - a balanced budget has been achieved for the second year in a row.

"We've now shaped the staff component to meet the revenues coming in," Edgar told the executive board.

More importantly, thanks to a $6.3 million anonymous unrestricted gift in March, the NCC has more than $9 million in its long-term reserves. At the end of the previous fiscal year, the reserves were $2.5 million. Total assets doubled from $6.3 million in 2001-02 to $12.6 million in 2002-03.

Five percent of the interest and earnings from the reserves will be allocated to the regular budget. Because some NCC members are facing their own financial difficulties, the anonymous gift "makes up for the downturn in funding from some of our member communions," Edgar said.

In 2002, the NCC also received a three-year, $500,000 grant from Lilly Endowment to help develop resources for new programs.

Edgar told United Methodist News Service he eventually would like to see $25 million to $30 million in long-term reserves, noting that the rule of thumb is that interest earnings on reserves should equal 20 percent of an annual budget to ensure smooth sailing when regular income does not meet expectations.

He pointed out that the NCC had $24 million in reserves as late as 1994, but that amount had dropped to less than $3 million at the end of 1999. Edgar became the council's leader in January 2000.

The council's budget crisis was attributed to the depletion of unrestricted reserves in 1998 and to 1999 expenses of nearly $4 million that were authorized by the executive board but not part of the regular budget. About half of those expenses involved payment to a consulting firm hired to review and redirect the council's fiscal management policies and practices. Other items included a pension contribution adjustment of $680,000 and a contribution to the council's burned churches fund.

United Methodist Bishop Melvin Talbert, an executive board member, said he still believes the United Methodist suspension of funding four years ago was necessary "for the good of the whole ecumenical movement" to serve as a catalyst for action.

"I was never of the opinion that the council would fail," he said. But he added that NCC leaders needed to commit to live within their means and become aggressive fundraisers. The accomplishment of both those tasks "has made it possible to get us where we are."

Now, Talbert said, "communions can feel excited about being a part of this organization."

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*Bloom is a United Methodist News Service news writer based in New York.

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