Treasurer's Report
2004 ANNUAL COUNCIL
TREASURER'S REPORT
October 12, 2004
What a privilege we have to be able to attend this Annual Council and listen to the reports from the Council on Evangelism and Witness and the thrilling stories included in the Secretary's Report which Elder Bediako gave on Sunday! To think that there are approximately 3,000 new members baptized each day and 13 new congregations formed! But, we are sobered when we realize that 66% of the world's population lives in the 10/40 Window, an area which is virtually untouched by Christianity. With four new babies born every second, it is clear that the task is beyond our feeble abilities, but, Praise the Lord, we don't have to depend on our own strengths and abilities.
As we come to the last Annual Council of this quinquennium, it is appropriate for us to take a look back at the last five years to see how the Lord has led, and to look forward to see what may be some of the opportunities and challenges during the next quinquennium, if the Lord has not yet returned.
At the 1999 Annual Council, Elder Rawson, in his Treasurer's Report, indicated what he felt would be issues of concern for the new quinquennium:
- Tithe Sharing
- Wage Scale Philosophy
- Develop better channels to regularly report financial facts to our members
- Develop financial and administrative structures that can be more responsive to a rapidly changing world environment
- Mission Statement driven resource allocation
- Develop clarity and consistency in recognizing and responding to issues of ethics and integrity
- Move forward with confidence and prepare to meet our Lord.
Tithe Sharing Formula
It is true that the new tithe sharing formula has played a major role in our budget discussions during this quinquennium and has affected the funds available for distribution through the General Conference's World Budget. Unfortunately, some have misunderstood the implications of the change and have interpreted it to mean that the church is in financial trouble and does not have the funds available that it once did.
The church's total tithe has increased every year and the increases during the recent years of economic upheaval and recession cannot be considered anything short of a miracle. We praise the Lord for blessing His people and for their faithfulness.
What the new tithe sharing formula has done is allow for a more equitable sharing of the burden and permitted more of the tithe to remain within the division's own territory. Steve Rose, General Conference Undertreasurer, will share some graphs that show the impact of the new tithe sharing formula. The phase in period has tracked very close to projections presented in 1999.
Mission Offerings
The mission offerings form a major component of the General Conference budget. It has been of great concern to us that this important part of the support of the world-wide work has not been growing. The mission offerings have dropped as a percent of tithe from approximately 60% in the1930s to less than 5% today. With the huge challenge of the 10/40 Window and other unentered areas, we must find ways to better communicate the challenge of an unfinished work. While mission offerings have not kept pace with tithe, local church offerings have held at approximately 35% of tithe over the past 40 years.
What are some of the Challenges and Opportunities that we may face during the next quinquennium:
1. Finding better ways of communicating the challenges of an unfinished work.
We have a tremendous challenge in the unentered areas. In recent years our mission emphasis has focused to a great extent on telling stories of successes in the field. It may seem to some that the work is finished in the "mission fields" and that funds need to be kept home to finish the work at home. The Office of Mission Awareness will work to coordinate and focus the message. The answer is not fundraising, but rather, a shared vision of the need. We must lay before God's people the challenges of an unfinished work, and I believe they will respond in ways that we have not even imagined.
2. Developing more flexible organizational structures.
We need structures that allow more flexibility so the church can take advantage of new opportunities and meet new challenges. We have begun to review policies to determine whether more latitude should be given to the divisions and local organizations to adapt them to meet local circumstances. Two years ago, we adopted a new set of remuneration policies. This year, we will be looking at the investment policies and policies covering borrowing of funds and approval of capital projects.
We should to be open to reviewing the way we do things. This should not start from an assumption that what we are doing is wrong, but we must be willing to step back and look at everything without feeling threatened. This is, of course, easier said than done.
3. Addressing ascending liability issues without compromising unity.
If there is one strategic value that stands above the others as requiring specific attention from the General Conference, it is the value of unity. There are many strains on unity with a rapidly growing community of believers such as ours. The issue of ascending liability has been with us for years, but the cost of protecting the church from ascending liability has grown dramatically in recent years and is putting strains on the system. We are reviewing various aspects of the church's operation in an attempt to reduce this liability, but ascending liability cannot be completely eliminated without jeopardizing the unity of the church. We must do all we can to reduce exposure but it must never come at the cost of unity.
4. Empowering all members to become full partners in supporting and finishing the work.
There are areas of the world where our members need assistance in getting the work established and growing. We speak of the need for self reliance in financial matters, but often find it easier to seek help from others than to test what the local membership can do with God's blessings. We may be depriving them of the opportunity to rely on God to meet their needs while supporting His work.
God has blessed His children and we need to give all the opportunity to share in finishing the work. One hundred years ago, there was a tremendous expansion of the work around the world. Just take a look at all the 100th anniversaries' celebrations that are being celebrated around the world. I hope that we can have a similar expansion of the work in the 10/40 Window during this next quinquennium. Considering how small our membership was 100 years ago, we should be able to accomplish far more today.
Every organization should seek ways of lessening their dependence on appropriations to free up resources for use in unentered areas.
I remember in one conference in which I served, we were forced to reduce the number of pastors serving local congregations. None of the churches wanted to share their pastor with another church. But when we started talking about opening work in new areas where we had no church or Adventist presence, a number of churches volunteered to even go without a pastor and allow the elders to care for the church. We must make certain that when we ask areas to share their resources for entering new areas that these resources truly go to opening new work and not just to other areas that are already established.
The story is told of a local church which had been struggling with its finances for many years. One day the pastor got up and announced that he had good news and bad news. The good news, he said, is that the church now has all the funds needed to carry on its ministries and meet all of its obligations. The bad news is that the money is still in your pockets.
God has provided His people with all the resources needed to finish the work.
5. Evaluating all expenditures on a cost/benefit basis using "Kingdom" criteria.
We need to spend time evaluating all expenditures on a cost/benefit basis.
There is sometimes a resistance to any measurement of outcomes for the church as people say you cannot quantify the work of the Holy Spirit. That is true, but there are still many measures that can be applied to be sure we are getting the outcomes we are seeking.
But, as we do the analysis, we need to be sure that we understand the organization and do not just apply what is used in industry without understanding the nature of the church. We need to use "kingdom" criteria. Many businesses would not invest the amounts we will have to invest to enter new areas (markets) that will not produce results for years to come. If we only look where we can get the most "baptisms per $1,000", we will only continue to work where the work is already well established.
We also need to properly assess the value of the church's structure and the benefits it brings. Nearly all the separately funded projects would fail to have lasting results if it were not for the organized church around the world which nurtures those brought in and keeps them connected with the family of God. There are many who criticize the various levels or administrative structure which we have in the church. We need to evaluate them based on the needs of the various parts of the world field, but let's be certain we are calculating the value they have to a voluntary organization and not use norms of a corporate-line authority structure.
I remember one individual who was very troubled that we needed twelve employees in the conference office to supervise the work of 28 pastors in the field. He said his business would be bankrupt if he had one supervisor for every 2.3 employees. I told him I agreed with him completely, but that he needed to take into consideration the fact that the conference staff is not only involved in support and supervision of 28 pastors, but also with 300 local church elders, Sabbath School leaders, church treasurers, etc. It is important to recognize that it takes much more time to direct and support a volunteer than it does a paid employee.
If you look at the appropriation in the proposed 2005 GC World Budget for GCAS of over $5 million and compare it to the total budgeted expenses of $120 million, you could ask why it costs us nearly 4% of the budget just to do the audits. That would be way above industry averages. But when you realize that the GC bears the costs of the audits of virtually all the denominational organizations outside of NAD and divide the $5 million by approximately $1.5 billion, it comes to less than one-third of one percent.
6. Finding effective ways of "Passing on the Family Business"
One of the biggest challenges we face is finding ways to engage the next generation fully and meaningfully in the life, mission and support of the church. Elder Carter, retired director of GC Trust Services, has a sermon entitled "Passing on the Family Business". He says that individuals who operate family businesses have been most successful in passing on the family business if the children are involved meaningfully in the business from an early age. Most individuals who have been successful in building up a family business have been careful to take out of the business only the minimum amount needed and reinvest everything possible in the business so as to build for the future.
The new generation is serious about their commitment to the Lord but we have struggled in our efforts to develop that same connectedness to God's visible family here on earth.
Many wish to see immediate results tied directly to their support and often channel their support to specific projects. We must become more intentional in seeking ways to give feedback and as to what their support of the church is accomplishing. The church cannot accomplish its mission by project giving alone. We need to find ways to better identify and communicate how tithes and offerings are being used.
7. Communicating financial information in more easily understood formats.
We need to communicate financial information to our members in formats that are clearer, more informative and understandable. We must make use of new technologies that can aid in presenting this information, but at the same time, be mindful of how the information on the internet can be used by individuals in some parts of the world for their personal purposes.
8. Developing clearer processes for identifying and responding to issues of ethics and integrity.
We are in the post Enron era. There is an atmosphere of suspicion and mistrust that permeates society and even the church. We need to be totally transparent and proactive in addressing any areas where there may be concerns.
9. Finding more effective ways to deal with the increased globalization of functions within the church.
We live in a very different world today than did my parents when they left for mission service in Africa in 1946. It took over a month just to get there and their first furlough was seven years later. Division boundaries were much easier to honor. At this Annual Council, we are recommending a change in the policy in which required denominational employees and volunteers get permission from the General Conference before traveling in the territory of another division. Our organizational structure assumes that the division committee and division administration are to control the work of the church within their territory. This is becoming less and less a reality.
Radio and television signals can now be beamed from a single point by satellite around the entire globe. The internet sends information to the far corners of the earth easily and inexpensively. AWR and ATN regularly broadcast to footprints that do not respect division boundaries. Church agencies, such as ADRA, work with external agencies that draw very different regional boundaries than does our denomination.
These technologies and developments present extraordinary opportunities for the church, but they also bring challenges. We have not done a very good job of developing mezzanine level structures within the church that can deal with the cooperation and coordination that is needed where division boundaries are crossed. There is a tendency to assume that every item which crosses a division boundary must be handled or coordinated by the General Conference. Unless we find better ways to deal with these issues, we will find more and more of the General Conference's time and energies diverted to these matters at the expense of focusing on its primary mission.
10. Gaining consensus on distribution of resources to fulfill the mission.
Over the past couple of years, we have been struggling with the issue of distribution of interdivision or missionary budgets. There always seem to be compelling reasons why budgets need to remain where they are, but at the same time, we must enter new areas and take advantage of new opportunities. Some tend to feel one area must loose for another area to gain. When we are refocusing on the work in unentered areas, everyone is gaining. Our ultimate objective is to finish the Lord's work and go home. As we direct our efforts toward the great unentered areas, everyone benefits.
As we come to the end of the five year phase in of the new tithe sharing formula, we have agreed that we will review the formula for the distribution of appropriations. This will be a difficult process if we are not all agreed as to what are the priorities, but it is vital to finishing the work.
Our resource allocation must be mission driven.
11. Dealing with Post 9/11 challenges
We are facing increased restrictions on the sharing of resources since 9/11. It is becoming more and more difficult to get visas, transfer funds, and function as a global church.
12. Use of Tithe
There are a number of realities that have changed since the last study of the use of tithe was done. New organizations, such as ADRA and AWR, that are not addressed in the policy. The role of interdivision employees has changed over the years. We need to review these and other issues. The outcome of this study will be very important to the future allocation of resources within the church.
Never forget that God is in charge
Sometimes we get so involved in trying to find solutions to issues that we forget Who is in charge. This is God's work and we don't have to worry about its ultimate success. We only need to make sure that we are helping and not hindering.
The church is in good hands – God's hands. Let us praise Him for His goodness and mercy.
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