Seventh-day Adventist Church financial officers are cautiously optimistic as the financial markets make an "impressive" recovery amid the still uncertain global economic situation, a report by the world church's Treasury department indicated yesterday.
Most of the General Conference's funds are invested in fixed income investments rather than equities, meaning the rising stock market netted the church a US$310 million increase in investments between January 1, 2008 and December 31, 2009, the report stated.
That works out to a return of approximately 1.7 percent per year, church treasurer Robert E. Lemon told delegates at world church headquarters April 6 for Spring Meeting.
While the church has yet to recover the full amount of its investment losses since the market's peak in 2007, it has now offset almost all of its losses during 2008 and 2009, Lemon said.
World church headquarters operated $4.3 million under its expense cap of 2 percent of world tithe during 2009, Lemon said, largely due to a hiring and salary freeze and cuts in travel budgets. The measures were among those implemented in 2008 in response to the global economic downturn.
While financial markets have seen an upswing in recent months, returns in tithes and offerings indicate membership is still weathering the recession, Lemon said.
Lemon noted a 4.3 percent decrease in worldwide tithe for 2009. While the church saw an 8.6 percent increase in tithe in 2008, much of that upswing can be attributed to favorable currency exchange rates, he said. "For 2009, we see the opposite effect," he said, citing the strengthening U.S. dollar.
With nearly 40 percent of the General Conference's world budget now coming from outside North America, the church is now "more vulnerable" to exchange rate fluctuations, Lemon said.
In U.S. dollar terms, the church saw a decrease in gross tithe from regions other than North America, down from $1.04 billion in 2008 to $972 million in 2009. Tithe from North America also fell from $894 million to $879 million.
The church also received $4.3 million less in total mission offerings in 2009 than the previous year, but again, Lemon said, exchange rates are partially responsible for the drop. Over the past five years, the church has in fact seen "substantial growth" in both tithes and offerings from regions outside of North America.
The upside of a strengthened U.S. dollar, Lemon said, is how much further appropriations from the world church headquarters go when converted to local currencies. With reports indicating that the U.S. dollar is again weakening, church financial officers said they welcome the positive impact on the General Conference budget, but regret that appropriations will see less buying power.
For 2009, the church spent 91 percent of its operating budget cap, leaving almost $13 million in supplemental budget, church financial officers reported. After hearing the report, delegates voted to divide the remaining nine percent between the General Conference and appropriations to the church's 13 world regions, including additional assistance for Haiti and Chile following devastating earthquakes in those countries.
"We began the year with enormous financial uncertainties," Adventists world church President Jan Paulsen told the delegates. "That we were able to distribute an extraordinary budget in 2008 and now retain some is an amazing display of the blessings of God, the faithfulness of our members and the careful management of church funds."
Lemon echoed Paulsen's reaction to church financial reports, but said the global economic situation remains "turbulent" and the church should remain prudent in its handling of funds.
"We don't know when the interest rates will start to increase ... or how long the current stock rally will last, but we do know that the Lord is in charge and will see his church through whatever may come," Lemon said.