imb_reserves_62303

Posted: 6/20/03

IMB has spent from reserves for three years

By Mark Wingfield

Managing Editor

RICHMOND, Va.–The International Mission Board spent nearly $37 million more in 2002 than it received in income, according to the treasurer of the Southern Baptist Convention agency.

In his report to IMB trustees May 7, Treasurer David Steverson explained reserve funds had been tapped to pay the bills in 2000, 2001 and 2002.

Steverson's comments are taken from minutes of the meeting made available to the Baptist Standard. The meeting was held in Framingham, Mass.

“Clearly, we cannot continue to sustain such a large gap between income and expenses,” he told the board. “We are fortunate in that we had reserve funds that could be drawn upon to support our work in 2002. These reserve funds were available because of additions to reserves in the 1990s, when we experienced good investment returns.”

Steverson said the board had tapped those reserves “some” in 2000, “more” in 2001 and then drew down “significant amounts” in 2002. The $37 million draw-down in 2002 covered 13 percent of total expenditures for the year.

“We need to keep in mind that when we spend reserve funds, it not only is reflected in a reduction in our total assets, but it also reduces investment income available to be budgeted in future years,” he added.

In light of the IMB's current financial challenges, trustees approved a plan to reduce spending this year by $10 million. The board recently announced elimination of 61 positions at its Richmond headquarters and said it will cease publication of its flagship magazine, Commission.

The $10 million figure came from the gap between $115 million in gifts to the 2002 Lottie Moon Christmas Offering and the $125 million offering goal. Gifts to the offering increased 1.15 percent over the previous year, even though the total fell short of the budgeted goal.

IMB officials have not publicly stated a projection for this year's total shortfall, although they have acknowledged missing the offering goal will compound an already tight situation.

In 2002, the IMB received 52 percent of its income through the Lottie Moon Offering and 32.6 percent through the SBC's Cooperative Program unified budget. The balance of income came primarily from investment income, hunger and relief funds, and field-generated funds.

The recent downturn in the national economy has hit the IMB hard, as it has many non-profits. Steverson reported the IMB's total cash and investments at year-end were $66 million less than the previous year-end. More than $50 million of that loss was due to sagging investments.

“We had $25.5 million in investment income in our 2002 budget and not only did not earn that amount, we actually had unrealized losses on our investments of just over $25 million,” he explained.

Unlike many religious agencies that have experienced declining contributions on top of decreased investment income, the IMB has continued to receive more money each year from Southern Baptists. In real dollars, combined contributions to the IMB through the Cooperative Program and Lottie Moon Offering have increased $58 million (32 percent) over the past five years, from 1998 to 2002.

In 1998, Southern Baptists sent the IMB $180.55 million. In 2002, the Cooperative Program and Lottie Moon provided $238.96 million to the IMB.

However, expenditures have increased even more rapidly, as the board has sought to send out more than 1,000 new missionaries annually. The 1,000 goal includes both long-term and short-term workers, with short-term workers accounting for about 60 percent of those sent.

“None of our income sources came anywhere close to keeping up with our expenditures,” Steverson told the board. “Our missionary support expenditures reflect the increased numbers of missionaries who are serving around the world.”

Other sources of overseas expense have been reduced to help feed the missionary expansion, he added.

Despite the deficit spending, the IMB does have something to show for its investment, Steverson told trustees.

“We have record numbers of new missionaries, as well as record numbers of baptisms, churches, new churches and outreach groups. Church membership is at an all-time high, and more people are involved in discipleship, Bible study and leadership training than ever before. … We can rejoice that while we have spent significant amounts, we have significant results to show for what was spent.”

The treasurer also added warnings, however, that the IMB “must make significant adjustments if we are to prepare ourselves for the future” and that the current pattern of spending is “not sustainable over a longer term.”