Kuchta: Increase unrestricted revenue, or ministries suffer

In a March 19 memo to the LCMS Board of Directors, Synod Vice President-Finance/Treasurer Tom Kuchta noted that the national Synod’s “unrestricted revenues have decreased every year after June 30, 2001” — the end of tkuchta-side.gifhe fiscal year when unrestricted revenues for the Synod totaled nearly $28.4 million, compared with “unrestricted revenues [for 2009-10] … estimated to be $20 million.

“This is $1.5 million less than last year,” Kuchta wrote, concerning 2009-10 unrestricted revenue anticipated for the Synod budget.
 
“It should be evident that ministries will be adversely affected in the future,” Kuchta wrote after observing that “there is no reason to expect unrestricted revenues to increase in subsequent years. The obvious question, then, is how will we achieve balanced budgets in the future?”
 
He also pointed out in the memo about “various financial matters” that over the same seven-year period, “actual financial results show a negative budget variance of approximately $5.1 million. The negative variance was funded by prior years’ accumulated unrestricted net assets, with the consequences being that unrestricted assets are negative ($305,000) at June 30, 2008.  In laymen’s language, we have depleted our accumulated operating profits.”
 
Kuchta wrote that before the 2004 Synod convention, he expressed concerns that the “Synod was facing serious future problems in being able to sustain its level of financial support for mission and ministry because of decreasing unrestricted income.
 
He went on to explain in the memo that most of those concerns were addressed in Resolution 4-07 of the 2004 LCMS convention, which established the Blue Ribbon Task Force for Funding the Mission.
 
However, as he pointed out, that task force’s recommendations to the 2007 convention were not presented to the convention, since the floor committee that received them felt no action should be taken until the newly formed Blue Ribbon Task Force for Synod Structure and Governance (BRTFSSG) would make its recommendations to the Synod.
 
“In my opinion, the current recommendations by the BRTFSSG will have an immaterial effect on the financial operations of the Synod,” Kuchta wrote.
 
Kuchta also pointed out that at the fiscal conference held in February, 2007, “the districts agreed to annually increase the subsidy paid to Synod.  Unfortunately, district remittances continue to decrease,” he wrote.
 
“I believe it is evident that two conventions, two blue ribbon task forces, and a fiscal conference have not positively impacted Synod’s unrestricted income,” Kuchta wrote. “I also believe that the [Board of Directors] needs to understand the seriousness of our fiscal position.”
 
While emphasizing that the Synod is not “going bankrupt,” Kuchta went on to explain that, without a solution, “it will be necessary to reduce significantly the financial support to ministries” for annual budgets in years to come.
 
“I find this to be unacceptable, as I’m sure each of you do,” he concluded.
 
After ruling out the option of the Board’s borrowing funds and writing of  the difficulties of making decisions to “redeploy existing assets,” Kuchta revealed that he is looking into a third option available to the Board — to “initiate a program of fundraising for unrestricted revenues.”
 
He indicated that he has met with LCMS Foundation President Tom Ries, who “committed to developing” such a fundraising plan for the Board’s consideration.
 
“I believe that we have a crisis of not being able to fund the needs of the national ministries,” Kuchta concluded in his memo. “Inaction will worsen the crisis. We must act boldly and fulfill our responsibility as stewards of the church.  For His sake, we must provide the resources to spread ‘The Word.’ ”

Re-posted Sept. 8, 2009  
 

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