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The Lutheran World Federation
Lutheran World Information |
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| 31.08.2005 |
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| LWF Closed 2004 with Balanced Geneva Coordination Budget |
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LWF Council Meeting in Jerusalem/Bethlehem,
31 August – 6 September 2005
PRESS RELEASE N0. 04-2005
LWF Treasurer Stoll: Gains from High Exchange Rates
BETHLEHEM/JERUSALEM, 31 August 2005 (LWI) - The Lutheran World Federation (LWF) closed 2004 with a balanced Geneva coordination budget, LWF Treasurer Mr Peter Stoll told the LWF Council at its ongoing annual meeting.
In the Treasurer’s Report to the Council, Stoll emphasized that apart from two exceptions, individual budgets of the departments as well as the program and project budgets were also balanced. The Council takes place August 31–September 6 at the International Center of Bethlehem, hosted by the Evangelical Lutheran Church in Jordan and the Holy Land (ELCJHL).
According to Stoll, the LWF’s financial situation was tight only twelve months ago, and “this is why we decided to seek ways to improve our financial sustainability.” He explained that the main reason for last year’s positive developments were the high exchange rate gains obtained via the higher market value of the Euro against the US dollar.
Stoll said budget projections for the years 2005 and 2006 did not indicate any deficits as yet. However, the Geneva coordination budget still reveals a “structural deficit” after 2006 if exchange rate gains are not taken into account.
USD 102 Million Total Income in 2004
Stoll reported that the total income of the LWF was USD 102 million in 2004, compared with USD 97 million in 2003. Of this amount, USD 14.59 million covered the Geneva coordination budget costs, which primarily includes staff and operational costs. Some USD 87.4 million was allocated to LWF projects and program activities.
The LWF’s total expenditure in 2004 was USD 105 million compared with USD 100 million the previous year. Of this amount, USD 14.16 million was allocated to the Geneva coordination budget, whereas USD 90.28 million covered costs of LWF projects and programs. The General Secretariat’s total expenditure stood at USD 3.9 million; Department for Theology and Studies (DTS), USD 1.1 million; Department for Mission and Development (DMD), USD 13.2 million; and USD 86.9 million for the Department for World Service (DWS).
Although the Geneva coordination budget had a surplus of USD 427,610 at the end of last year, projects totaling USD 589,833 had to be written off, which led to a deficit of USD 162,232. The latter involved funds that had to be used for programs and projects of the General Secretariat, DMD, and DWS, and which could not be covered by the so-called B-budget (Statement of Needs for programs and projects).
The General Reserves and other net assets freely available to the LWF amounted to USD 10.7 million at the end of 2004, Stoll reported.
“Structural Deficit” Anticipated from 2007 Onwards
In contrast to 2004 and the expectation that budgets are balanced for the years 2005 and 2006 as well, the LWF treasurer said he anticipates that the “structural deficit in the Geneva coordination budget” will reach CHF 800,000 – 900,000 per year as of 2007. At least from 2007 onwards, it will no longer be possible to count on high exchange rate gains.
He emphasized that “on the contrary, when the USD starts to appreciate against the Euro, we will have great difficulties in avoiding currency losses.” Another reason for the forecast deficit is the lower contributions from Germany, although these contributions remain far above the fair membership level. Careful planning of work was needed to ensure that the Geneva coordination budget could be balanced.
In order to increase income, Stoll suggested more focus on fair membership fees and the Endowment Fund, besides trying to secure earmarked money for projects and programs. The fair membership fee is based on the number of members in each church and the wealth of a given country. Some member churches pay the full amount of the fair membership fee or even more despite the fact that they have some financial problems themselves, the LWF treasurer noted.
If all member churches could pay the full fair membership fee, this would bring additional income of around CHF 400,000 annually with the current EUR/USD rates. “We have to ask those member churches that have not been paying the full fair membership fee up to now to increase their attempts to reach the goal of full membership fee,” Stoll said.
LWF Endowment Fund Amounts to CHF 8.9 Million
Stoll further emphasized the significance of the Endowment Fund for the financial future of the LWF, and reminded the member churches to take part in the subgoal of reaching CHF 10 million. Right now the level of pledges and capital are encouraging at CHF 8.9 million.
The LWF Endowment Fund was set up in 1996 with the primary purpose to provide financial support for the work of the LWF. Since 1999, the fund is registered under Swiss law in the Canton of Geneva. The long-term goal is eventually to reach CHF 50 million.
DWS Program in Jerusalem under Serious Threat
Focusing on the financial risks and uncertainties, Stoll expressed concern for the situation of the Augusta Victoria Hospital (AVH) on the Mount of Olives in East Jerusalem, especially in view of a court case over an employer’s tax levy for the health institution. Moreover, the high level of program deficit, consequences of the construction of the separation wall and the future of UNRWA patients (United Nations Relief and Works Agency to help Palestinian refugees), are all big threats for the Jerusalem program.
Furthermore, the LWF treasurer reported that the Strasbourg Institute has realigned its research staff to meet with the level of income by reducing the number of full time posts to more part time adjunct professors. The budget projections for the next four years thus show balanced budgets for the Institute.
Future Cooperation within the Lutheran Communion
In his report to the Council, Stoll also referred to the consultation held at Chavannes-de-Bogis near Geneva in June 2005 on “The Future of the LWF in the Context of Ecumenical Reconfiguration.”
During this meeting, which was attended by more than 40 representatives from the LWF member churches, national committees, partner organizations and LWF staff, participants agreed it was important to strive for cooperation and synergy rather than competition with other actors. Better program coordination and joint planning of agendas within the ecumenical community was also called for.
It was proposed at the consultation that the LWF “should be willing to let go of all that hinders it from doing what the communion of churches is uniquely called to be and do,” Stoll added. (1,074 words)
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There are around 170 participants in this year’s Council meeting, including representatives from the LWF member churches on the 49-member governing body. Also attending are officials from LWF partner organizations, invited guests, stewards, interpreters and translators, and LWF staff. The Council is the annual governing body meeting between Assemblies held every six years. The current Council was appointed at the July 2003 Tenth Assembly in Winnipeg, Canada. It comprises the President, Treasurer and 48 persons elected by the Assembly. Other members include advisors, who are ordained and lay persons representing the different LWF regions.
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