Financial cloud lifts as NCC drops debts, doubles assets
10/1/2003
By Linda Bloom*
National Council of Churches logo. Photo number W03025, Accompanies UMNS #467
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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."
# # #
*Bloom is a United Methodist News Service news writer based in New York.
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