Membership Fee Contributions Have Decreased
LWI Council Press Release No. 06/2011 | Geneva, 10 June 2011 (LWI) – The Lutheran World Federation’s (LWF) governing body, the Council, has heard that while the communion’s bottom line has improved, challenges remain, as the LWF strives for its goals of a sustainable operating structure and a balanced budget.
In her first report to the Council as LWF Treasurer, Ms Christina Jackson-Skelton gave an overview of the 2010 financial results and other matters that will come before the LWF Council in the course of its 9-14 June meeting in Geneva, Switzerland.
The treasurer noted that the level of LWF income had been fairly steady for the last four years, with the 2010 receipts at USD 102 million compared with USD 103.4 million the previous year, a decrease of USD 1.4 million or 1.3 percent.
The total expenditure amounted to USD 100 million compared with 103.9 million in 2009, a reduction of USD 3.9 million or 3.8 percent. This included USD 84.4 million for the Departments for World Service (DWS); USD 11.7 million for Mission and Development; USD 0.9 million for Theology and Studies; and USD 3.2 million for the General Secretariat.
Some of the lower budgeted costs came primarily from lower staff and Council costs, Jackson-Skelton said, while noting that a decrease in membership income was of concern due to its importance in strategic planning.
Reserves
In 2010, LWF reserves increased from USD 21.9 million to USD 24.0 million, which is above its minimum target level of USD 15.0 million. However, only DWS reserves were at the proposed level; those of other units decreased in both 2009 and 2010, said Jackson-Skelton, who is also treasurer of the Evangelical Lutheran Church in America.
“Reserves” refer to net assets freely available to support the organization’s operations, without restrictions.
Membership Fees
At the same time, LWF membership contributions decreased over 2009 and 2010 to reach USD 3 million.
“Some member churches have experienced declines in income and had to reduce expenditures in order to balance their budgets,” said Jackson-Skelton. She underlined that “membership fee contributions are undesignated and provide stability for critical work other than programs and projects.”
“The level of membership fee contributions continues to lag the total of fair membership fees. Growth in this area would help to provide support for areas that have been identified as high priority in the strategic planning process, such as theological and ecumenical work.”
LWF’s fair membership fees are based on a formula indicating the relative wealth of the member church country compared with that of churches in other countries.
The treasurer said, “Overall, the financial results were positive, favorable compared to both budget and the prior fiscal year. Expenditures were well managed, including the 2010 assembly in Stuttgart, Germany, resulting in no negative impact on the LWF operating results.”
The LWF showed a positive operating net income from operations of USD 926,000 for the financial year ending 31 December 2010. The operating deficit for coordination in Geneva was USD 1.2 million, which was slightly favorable compared to the budgeted deficit of USD 1.4 million, and positive results of USD 2.1 million emanated from DWS filed coordination.
Pension Fund
Jackson-Skelton said that the Pension Fund Board had met recently and unanimously approved a proposal to merge the LWF Pension Fund with the Switzerland-based Abendrot Foundation as of 1 January 2012. She explained the Abendrot Foundation was established in 1984 and has 8,300 active members, 600 pensioners and assets of CHF 825 million.
The treasurer noted that the coverage ratio for Abendrot Foundation was 105.7 percent at the end of 2010, compared to LWF’s 100.1 percent. The benefits from the merger would include “greater efficiencies and investment options from a larger fund, and greater sustainability of long-term benefits.” She noted that the LWF demographic structure was not favorable as 38 percent of all members are pensioners. The Abendrot Foundation had, “socially responsible investment principles, which are very close to those of LWF,” she said.
While the Endowment Fund assets had recovered well following the 2008 downturn to reach a new high of CHF 12.2 million in 2010, additional efforts were still needed to achieve the goal of CHF 20 million by the year 2017, Jackson-Skelton added. (709 words)
Council 2011 News | Photos | Documents
See also:
- Chairperson of the Finance Committee
- LWF Council Looks to Reverse Decrease in Membership Fees
- LWF Treasurer Stoll Warns of Impact of Global Financial Situation on LWF’s Work
- Global Increase in LWF Churches’ Membership Pushes Total to Over 68.3 Million
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