April 13, 2016

Shaky Economy Costs General Conference Millions of Dollars

An unsteady global economy shaved 20 percent off the income received by the General Conference last year, and church leaders are reworking budgetary plans as they prayerfully seek to navigate the uncharted waters ahead.

While tithe and offerings remained strong worldwide in 2015, exchange-rate losses linked to the fluctuations of regional currencies against the U.S. dollar cost the General Conference, the administrative body that oversees the Seventh-day Adventist Church, a total of $19.4 million.

“My fears that were presented in October actually came true,” General Conference treasurer Juan R. Prestol-Puesán said in an interview.

Prestol-Puesán cautioned church leaders at the General Conference’s Annual Council business meeting on Oct. 12 that market uncertainties might lead to the loss of millions of dollars in church income. He confirmed that this had indeed happened at the General Conference’s Spring Meeting of church leaders on April 12.

“We are making a significant adjustment to the budget, and we are also looking at what could be in store for us for the rest of this year, 2016, and in 2017,” he told the Adventist Review.

“We are looking at a very difficult year financially for 2017, given the number of programs and commitments that we have,” he said. “Where will the Lord lead us in this? We are going to have to take it one year at a time.”

Prestol-Puesán, speaking at the Spring Council at the General Conference’s headquarters in Silver Spring, Maryland, said this year’s budget was prepared months before the end of 2015 and planners had not anticipated such a significant drop in income. The General Conference operates in U.S. dollars, but 53 percent of its income originates in other currencies.

Prestol-Puesán said his office recommended transferring $9.9 million from a reserve fund (No. 71120 Required Working Capital – Non-Tithe) to the 2017 operating budget if income continues to decline in 2016.

“Our approach to budgeting and finances for 2017 is one of caution, prudence, and common sense,” he said in prepared remarks.

Juan R. Prestol-Puesán, left, paying tribute to longtime General Conference comptroller Verland Erntson, who died in February at the age of 71. Also on the stage Tuesday are Erntson's widow, Jan, retired General Conference treasure Robert Lemon, and General Conference president Ted N.C. Wilson. (Kristina Penny / AR)

The General Conference would have had $19,441,294 additional income this year if 2015 exchange rates had remained the same as in 2014, according to the treasury report to the Spring Meeting. In another loss, the variability of financial markets cost the General Conference a total of $2.8 million in capital and unrealized gains in 2015. Those investments had represented a gain of $2 million in 2014.

In all, the General Conference received $94.8 million in tithe last year, a year-on-year decrease of $2.2 million. However, it says, only three of the world church’s 13 divisions showed losses if the tithe was calculated in the predominant division currency. Those divisions were the Inter-American Division, which experienced a banking crisis in Mexico; the Southern-Africa-Indian Ocean Division, because of a decline in the value of the South African rand; and the Trans-European Division.

“We wish to thank our members for their commitment in giving so that the church can function in the world community,” he said. “Their sincerity and faithfulness is evident when we see the giving in local currencies.

World mission offerings amounted to $84.6 million last year, a drop of $4.2 million.

Prestol-Puesán said the General Conference’s income also would be affected by plans by the North American Division to relocate from the General Conference headquarters to another site in April 2017.

“The budgeted cost of the rearrangement is still to be finalized,” Prestol-Puesán said.

He predicted, however, that the departure would “represent a negative impact of approximately $1 million to $1.2 million per year to our operations.”

With uncertain times ahead, Prestol-Puesán told church leaders that “we rest in the hands of the Lord and trust in the faithfulness and generosity of our members.”

“We have nowhere else to go,” he said.

He said a piece of counsel given by Adventist Church co-founder Ellen G. White was as relevant now as when she wrote it more than a century ago.

“Our heavenly Father has a thousand ways to provide for us, of which we know nothing,” he said, reading from The Desire of Ages, p. 330. “Those who accept the one principle of making the service and honor of God supreme will find perplexities vanish, and a plain path before their feet.”