A special message from President Mark Schroeder
The recent economic difficulties in our country have begun to have a direct impact on our synod, particularly as the budget planning for the next two years begins. These new developments are serious, and we are making immediate changes to our current and future ministry plans. But we also trust in our unfailing God.
First some background. Just four months ago, we were celebrating God's blessing of a budget surplus, thanks in large part to the generous support of our congregations following the last synod convention. Still, from the time budget planning began, we knew that it would be a challenge to incorporate the $2.6 million added by the convention on an ongoing basis, and that support from congregations and individuals would need to increase to this level and grow from there. We knew that it would be a challenge for our congregations to do this, but we believed that it would be possible.
Recently, however, we learned of two developments that will make an already challenging situation even more difficult. Because of the recent downturn in the stock market and the related economic problems, expected major financial support for the synod from two sources will be significantly reduced.
One situation involves large gifts from an individual donor. Two years ago, the donor expressed his intent to provide $3 million per year for the following five years. He has already provided that gift for the last fiscal year and is committed to making the second installment for this year. The five-year commitment was based on the value of stock owned by the individual. In the last months, the value of the stock has plummeted and the donor has informed us, much to his regret, that he will not at this time be able to forward next year's installment of the intended gift. He has expressed his sincere desire to forward this gift, as he had originally intended, when market conditions enable him to do so. For the immediate future, however, this is a source of financial support that we can no longer include in our planning.
We also learned on Thursday, Nov. 6, that the same market conditions have affected the Schwan Foundation. The foundation is providing $8 million for our synod's mission and ministry programs this calendar year. The foundation informed us that the grant to the synod in the next year will be significantly reduced. We will find out in December the exact extent of that reduction.
After more than a year of very positive financial news and amazing blessings, we are now confronted by a new set of challenges. It's likely that the two circumstances described above will reduce our anticipated financial support by about $4 million. This is in addition to the convention-directed budgetary increase of $2.6 million that needed to be included in our planning. While this is a serious shortfall, we can also say that the total impact of this news is not fully known at this time for a number of reasons: we do not know the exact amount of the reduction in support; we do not know what benefits we will realize from the Year of Jubilee offering; and we will not have complete information on Congregation Mission Offerings for the next year until late January.
Regardless of what the final situation proves to be in terms of financial support, we are confident that with last year's budget surplus and the following steps we can achieve a balanced budget for this fiscal year.
First, we pray and trust. We were facing huge financial challenges in the summer of 2007. We prayed and we trusted, and God graciously blessed us. We can and should do nothing different as we face this new challenge.
In the remaining six months of the current budget, every area of ministry will be asked to economize and reduce expenditures. This directive will ask that all activities be reviewed, including existing ministry programs and travel and meetings, and that only absolutely necessary activities be carried out.
With only a few vital exceptions, current vacancies in called and hired positions will not be filled and no new positions will be added.
Looking ahead to the next biennium: Areas of ministry have already submitted budget estimates for their programs, but the areas of ministry will be asked to revisit those decisions and to consider how they might significantly alter ministry programs and reduce planned expenditures. As they consider reducing or eliminating programs and positions, they will be asked to keep in mind the priorities established by the last convention and reduce or defer spending in those areas of lower priority. The areas of ministry will also be asked to consider a greater use of the special funds that they have on hand to maintain or transition ministry programs.
The results of the Year of Jubilee offering will have a large impact on the challenge before us and could prove very helpful in meeting it. If the Year of Jubilee succeeds in eliminating our synod's $22.4 million capital debt, the $2.7 million now used for debt service will nearly offset the loss of the major gift. All congregations are encouraged to redouble their efforts in highlighting the importance of the Jubilee offering.
The impact of this current challenge will also be affected by the Congregation Mission Offerings (CMO) committed for next year. Most congregations will be determining those commitments in November, December, or January. We realize that congregations will also face challenges because of the current economy, but a significant increase in CMO will be vital in enabling us to avoid severe reductions in our synodical mission and ministry efforts.
Our financial staff is compiling a growing list of measures that can be considered as ways to reduce expenditures or as ways of utilizing other resources available to us. That list, along with additional alternatives, will be presented to the Synodical Council for discussion at its meeting on Nov. 14-15. A final budget will not be adopted until February, after we learn the results of the Year of Jubilee Offering and the Congregation Mission Offering commitments for the coming calendar year.
In his love and wisdom, God has seen fit to place another serious challenge before us. But, as he has so clearly demonstrated in the past, he promises to bless us even in circumstances that seem difficult and troublesome. It is not a time for panic or frustration. Rather, we look to God in confident faith. We return to the foot of the cross to see his faithful love demonstrated. And we commit ourselves to work together, united in our mission, to continue to carry out the work that God has given us.
Serving in Christ,
Mark Schroeder
Note: Look for further updates of the financial situation in next Monday's edition of "Together" following the Synodical Council meeting.
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GJ - I expected this to happen. Similar things developed during the much smaller meltdown of the dot coms and 9/11. Wealth disappears and the overflow with it. Most people and institutions have lost large percentages of money, unless it was kept in cash equivalents, like CDs and federal notes. Storing cash was supposed to be unwise.
This Depression is so universal and so badly managed that I see nothing good emerging for a long time to come. The Chi-Coms have dumped $600 billion+ into their economy to rev it up. In China they have shuttered one steel factory after another. No, I am not weeping for them. Deflation is harder to fight than inflation.
Postal workers have been laid off - 40,000 of them. When did that ever happen?
Two solutions have not been tried and they will not be tried with the new rulers installed. One is reducing capital gains taxes, which would stimulate investment. Another is reducing taxes all around, with major government reductions.
Instead, the government is expanding its reach into socialistic control of financial institutions. No one is an expert about where this will lead.
Rev. Bruce Becker picked a fine time to get an additional staffer at The Love Shack. Keep following the budget at St. Mark, Depere. I think you will find they were glad to have one less on the staff. Ditto, St. Marcus in Milwaukee.
