Wednesday, October 15, 2008

Breaking Financial News

Budget Adjusts for Tough Financial Times
General Conference eyes hiring freeze, pledges prudence

by Mark A. Kellner, News Editor, Adventist Review, with reporting by Ansel Oliver, Adventist News Network, writing from Manila, Philippines

“The financial situation of the Seventh-day Adventist Church is under pressure from the turbulence rocking world financial markets, General Conference financial officials report, but world church leaders are taking what they call prudent steps to manage during the crisis.

“On Oct. 13, the Annual Council of the General Conference of Seventh-day Adventists, voted to accept a 2009 budget based on 2007’s income levels, along with a resolution allowing the GC Administrative Committee, or ADCOM, to make interim adjustments to the budget between the Manila session and the Spring 2009 business meeting.

“In commenting on the financial situation and the need to have the ability to adjust the church’s budget as conditions shift, General Conference Treasurer Robert E. Lemon said the General Conference operates in a way that’s different from some other organizations.

"’Our budgets are not built on the dollars we have,’ Lemon noted, "but on the blessings we anticipate." This means, he said, "We don't know what effect the markets will have" on future income.

“In light of this, church leaders are already making moves to economize, Lemon said. "We will be holding off as long as we can" on filling vacancies at the world headquarters, he noted, though the hold is "not a total freeze" on filling vacancies, that might occur. Similarly, the voted approval of a 3-percent increase in appropriations included in the 2009 budget might have to be delayed – or even eliminated – depending on economic realities.

“A major portion of the Oct. 13 Annual Council discussion surrounded the General Conference’s operational funds equity investments. Some of these have taken a 30- to 40-percent “hit” in recent days, but they represent a very small portion of overall operating funds for the world church. Associate Treasurer Roy Ryan said the purpose of most equity investments is to generate sufficient returns to compensate for inflation and to preserve purchasing power. Ryan said it is not prudent to attempt to “time the market.”

“In other financial news, church leaders said the “extraordinary tithe” reported earlier as the proceeds from a family’s sale of a private business has reached just under U.S. $102 million, to which another U.S. $2.8 million in interest has been added. Of the U.S. $104 million available for allocation some U.S. $75.7 million has been allocated to world divisions, as well as GC institutions and programs aimed at world evangelism. Another U.S. $15.7 million is reserved for future allocation, leaders said.”

Check out “” for
Kellner’s complete financial report.

EDITORS COMMENT: This current financial report answers some critical questions as to the present financial position of the Adventist Church. It also finally reveals the amount of the “special tithe” the GC received “from a family’s sale of a private business”.

What is lacking is an accounting of the specific equity investments that took a “hit” in the GC stock portfolio and what “a very small portion of overall operating funds for the world church” means in dollars and percentage of. How much money is required to provide “sufficient returns to compensate for inflation and to preserve purchasing power”? A definition of “purchasing power” would also be helpful.

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