Treasurer reports progress in reducing budget deficits
By: Ryan Schwarz, NALC Treasurer
As a whole, the North American Lutheran Church is on solid financial footing, but operating expenses have exceeded income over the past few years.
While the budget is not yet balanced, I am glad to report that significant progress has been made in reducing these operating deficits.
A bit of background: For the past two years, NALC Convocations approved budgets with significant operating deficits, principally so that new resource persons could be added to serve NALC congregations in key ministry areas — domestic mission, communications and youth and family ministry, among others.
These deficits were financed with surpluses accumulated in the early years of the NALC. While the church was fortunate to have those accumulated surpluses, they are not unlimited. With that in mind, the NALC Executive Council and staff believe it is important to move toward a balanced budget in the near term. Fortunately, progress has already been made.
The 2018 NALC Operating Budget, approved by the 2017 Convocation, called for an operating deficit (amount by which expenditures exceed income) of almost $145,000. Due to strong congregational benevolence in the first part of 2018 and some temporarily unfilled staff positions, we now forecast that the actual deficit for 2018 will be approximately $100,000 — 31 percent smaller than budgeted.
The proposed 2019 Operating Budget, which will be considered by the 2018 Convocation, includes a deficit which has been further reduced to less than $50,000 — which is 67 percent lower than the 2018 budgeted deficit. This savings is the result of decisions by the Executive Council and staff to prioritize spending around key ministry initiatives and reduce or eliminate certain other expenditures. Proposed spending reductions include elimination of cost-of-living salary increases for the executive staff, decreased funding for the Global Forum of Confessing Lutheran leaders hosted in past years by the NALC, phase out of the paper version of theNALC News, use of creative scheduling plans to reduce costs for task force and committee meetings, closure of the NALC’s small Ohio office, and the conclusion of the work of the Task Force on Structure.
The resulting deficit is relatively modest and certainly within reach of closure. Moreover, forecasted increases in congregational benevolence are relatively small. For 2018 and 2019, we forecast a 2.5 percent increase in benevolence each year — after a very rapid 7.8 percent increase in 2017. Even a small additional increase in benevolence next year would make a significant dent in the remaining operating deficit.
The NALC maintains its commitment to a lean organization focused on service to its congregations. Yet, there are so many additional opportunities to invest in missions, pastoral development, congregational services, discipleship mentoring and youth, family and senior ministries, if funding is available. For that reason, I would like to thank all NALC congregations and individual donors for your partnership in funding and advancing the ministries of the NALC.
The table above summarizes the NALC Operating Budget for 2018, our current forecast for 2018, and the proposed budget for 2019. The full Operating Budget will be included in the package of reports for the Convocation and posted on the NALC website.
NALC members with questions may direct them to firstname.lastname@example.org.