On Tuesday afternoon at the 61st General Conference Session, GC CFO/Treasurer Paul Douglas delivered his Treasurer’s Report, giving an overview of the financial position and performance of the global Seventh-day Adventist Church over the past seven years.
Douglas began his presentation by recognizing how the present financial position of the Church would not be possible without God’s constant leading and providence—not only over the past seven years, but since the Adventist Church began in 1863.
“In 1863, when the General Conference was organized, the records tell us that there were 125 churches reporting a total tithe of $8000,” he began. “Nearly 160 years later, with more than 90,000 churches, the data shows approximately $2.7 billion in tithe, $1 billion in local church offerings, and $81 million in world mission offerings. This, my friends, is God’s money to be used for the mission He has entrusted us.”
“What a privilege is ours to partner with the Divine!” he said.
FINANCIAL POSITION AND PERFORMANCE 2015-2019
According to his report, the last quinquennium saw modest increases across world tithe and mission offerings, although considerably less than compared to the previous five-year period. While $12 billion was returned in tithe from 2015-2019, representing a 6 percent increase compared to 2010-2014, the previous quinquennium’s total world tithe increased by 32 percent. In comparison, $429 million was returned in world mission offerings from 2015-2019, representing an increase of 3 per cent compared to 2010-2014, although this previous quinquennium had an increase of 37 per cent.
“Giving for world missions has been on a steady decline over the years,” explained Douglas. “Today, for every dollar in tithe returned by church members, an average of 3.5 cents is provided for world mission offerings. In the 1930s, the peak of giving for world missions, the average was 60 cents.”
Despite only modest increases in tithes and offerings, the overall financial position of the Church at the end of 2019 was positive. At the end of 2019, the balance of cash and investments held by the GC was $344 million, a 7.9% increase from the start of the quinquennium in 2015. In addition, total assets increased by 5.6% to $513 million, and total liabilities decreased by 7.1% to $462 million.
Total revenues and gains for the quinquennium was an annual average of $243 million, of which more than 70% was from tithe and offerings. Meanwhile, total expenses were an average of $240 million, of which 32.3% was for appropriations to world divisions, GC institutions and the 10/40 Window. For a more comprehensive breakdown, you can read the full Treasurer’s Report.
POSITIONING THE CHURCH DURING COVID-19
After outlining the overall financial position of the church from 2015-2019, Douglas acknowledged the difficulties of COVID-19 for the first half of the new quinquennium—including the threat to life, widespread lockdowns and church closures preventing “the flow of tithes and offerings,” as well as the ability of many members to give due to business disruptions or job losses.
“The effect of the pandemic has not been limited to the threat to human life or economic well-being. COVID-19 has also been a threat to sustaining the fellowship of our Church, in that many buildings remain closed more than two years later,” he said, also acknowledging the many faithful members who “waited until the situation improved to remit their funds.”
Douglas acknowledged how Church leaders prayerfully sought wisdom in response to the pandemic and made the decision to “survive the crisis without affecting core mission.” Specifically, this meant not suspending financial appropriations to divisions, unions and institutions, but instead reducing administration costs across multiple strategies, including: suspending all travel, authorizing personnel to work from home, holding meetings on Zoom, postponing salary increases and reducing certain benefits, and reviewing and adjusting the operating budget, among others.
“We praise God that the core mission was not negatively affected in 2020 because the General Conference had preserved an adequate level of working capital and liquidity that allowed it to withstand the financial downturn,” said Douglas. “We praise God and give Him all the credit for giving us the guidance to have made it all possible!”
CURRENT FINANCIAL SITUATION—2021
Comparing the financial situation of the World Church at the close of 2021 compared to 2019, Douglas highlighted the “picture of God’s blessings that comes into view,” and how the Church has rebounded despite the financial downturn during 2020.
The balance of cash and investments for 2021 was $414 million (20.3% increase from 2019), total assets were $594 million (15.9% increase), total liabilities were $62 million (23.1% increase) and total net assets were $532 million (15.1% increase). At the end of 2021, 69.6% and 77.8% of total assets and net assets were held in the form of cash and investments, respectively.
The total revenues and gains for 2021 was $270 million, of which approximately 60% were from tithes and offerings, while total expenses were $215 million, of which 32.4% was for division appropriations, GC institutions and the 10/40 window. This position is overall more positive than the average reported for the 2015-2019 quinquennium. In addition, the GC reported 97.61% of the recommended working capital and 112.61% of liquid assets as compared to commitments for 2021, both measures being higher than in 2019.
Finally, 2021 showed a positive gain of just over $29 million for the GC’s main operating fund. One of the key drivers for this was a large distribution from the life-estate of a member, savings from reducing operating costs during 2020 and positive increases in tithes and offerings.
Rather than using the windfall from this large distribution to balance the Church’s budget, Douglas explained how his team was “convinced that God was testing our resolve and testing our readiness to be bold about finding innovative and impactful ways to engage in mission.”
This conviction led to the birth of the “Mission Impact Fund,” which will support grassroots I Will Go initiatives around the world by granting financial resources for mission initiatives administered by local churches. To learn more about this Mission Impact Fund and how to apply, read our article here.
GLOBAL FINANCIAL PERSPECTIVE
One emphasis of this year’s Treasurer’s Report was on the global nature of the Church’s financial and operational structure, including how funds are distributed for mission, and how currencies and global markets have impacted the funds received by the GC. These were discussed in turn.
i. FUNDING DIVISIONS, INSTITUTIONS AND MISSION PROGRAMS
Each year, the GC provides regular and special appropriations to support the work of its divisions and attached fields for work in their respective territories, institutions and activities within the 10/40 window. In 2021, $67.6 million was distributed and this amount has remained relatively stable each year of this quinquennium so far.
In addition to funding the work of divisions and institutions, the Global Mission Program administered by the Office of Adventist Mission is specifically aimed at reaching people who have not yet received the gospel message. From 2015-2019, 5,467 projects were funded by a total $50.7 million, utilizing 1600 missionaries each year who entered new territories. The funding was split between the GC (41%), divisions (17.6%), unions (15%), local fields (20.1%) and other sources (6.3%).
Douglas addressed the work of the GC’s International Personnel Resources and Services (IPRS), the human resources department for missionaries and liaison between the GC and divisions in employing international service employees (ISEs). He highlighted how the GC Mission Board recently voted a proposal to refocus the resources available to IPRS according to new criteria that will target unreached people groups around the world. For more information on this “Mission Reset”, read our article here.
In his report, Douglas also highlighted the important work of the General Conference Auditing Service (GCAS) across the globe, which requires the second-largest allocation of the GC’s budget—at 6.7%, or approximately $22.6 million per year. This is used to employ approximately 300 professionals in 45 countries that service institutions at all levels of the church, including schools and colleges, ADRA country officers and other projects.
Finally, the topic of tithe parity was addressed in the Treasurer’s Report, which was decided at Annual Council in 2019 and will affect all 13 divisions. Put simply, to offset the disproportionally high tithe rate historically required by the North American Division, a newly established global rate of 3% tithe per year has been implemented for the remaining 12 divisions, up from 2% at a 0.1% increase per year over 10 years. To learn more about this, read our article here.
ii. FINANCIAL MARKETS, INFLATION AND LOOKING FORWARD.
Continuing to discuss the global nature of the church’s financial structure and outlook, Douglas presented a brief overview of the changes seen in global financial markets in recent years. The US dollar strengthened from 2015-2021, which meant that approximately 80% of funds received by the GC from certain countries were diminished by the behavior of six major currencies: the Brazilian Real, Mexican Peso, the Euro, Korean Won, Australian dollar and Philippine Peso. “This in turn decreased our ability to provide more support for the World Church,” he explained
Despite this, generally positive financial markets provided enough support for the Church’s financial operations throughout 2020-2021. Looking forward, however, the inflationary backdrop caused by government stimulus packages during the pandemic, as well as the Russia-Ukraine conflict, has changed the financial landscape and may pose future challenges.
“This was the start of an inflation cycle that is currently raging,” explained Douglas. “Labor costs, maintenance costs, operating expenses and materials have all grown more expensive for the Church as well as its members.”
Douglas also noted how the Ukraine crisis has placed increased stress on costs, and how the world seems to be “careening from one crisis to another, which surely, my friends, is a sign of the nearness of Time.”
“The Church is not immune to the prevailing economic realities and the turbulence these realities create as we engage in the Great Commission,” Douglas said. He then outlined five challenges the Adventist Church will face looking forward:
- Balancing growth and stability
- Ensuring sufficient working capital and liquidity
- Moving towards higher levels of self-support
- Dealing with uncertainties due to geopolitical conflict, currency volatility and changes in regulatory environments
- Understanding paradigm shifts brought about by crisis events, new technologies, and changes in generational thinking
Douglas finished his report by encouraging members that “regardless of the challenges enumerated and others that will emerge, we are assured that God is with us … As we partner with God, we have nothing to fear—not even failure itself. Jesus is coming my friends, let us get involved and finish this work, not by our might, nor by our power, ‘but by the Spirit, says the Lord’ (Zechariah 4:6).”
- Angelica Sanchez contributed to this report.
This article was originally published on ANN website
photo courtesy of Tor Tjeransen / Adventist Media Exchange