wfn.org | Lutheran Church-Missouri Synod Creates Mission Reserve Fund

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LCMSNews -- No. 74
December 12, 2000

Board creates reserve fund
for mission opportunities

Just as reservoirs store water for times when rainfall is insufficient, a
new mission endowment fund will allow The Lutheran Church--Missouri Synodıs
Board for Mission Services to reserve funds for unexpected opportunities or
emergencies that would otherwise sap its regular budget.

An agreement between the Synod and the LCMS Foundation outlining the
arrangement for a new Board for Mission Services endowment fund was approved
by the Synodıs Board of Directors during its Nov. 30 to Dec. 2 meeting in
St. Louis.  The endowment reserve will be funded by gifts.  A designated
portion of the principal will be available for use in emergency mission
situations, while investment income will provide additional funding for
missions.

The Foundation will manage the fund in consultation with LCMS Vice
President‹Finance /Treasurer Paul Middeke and the mission board.

World situations can pose unexpected financial demands, according to Dr.
Glenn OıShoney, executive director of the Board for Mission Services.  For
example, a sudden war may force emergency evacuation of missionary teams and
their families ‹ an event that is impossible to anticipate in budget
development.

At other times, OıShoney said, mission fields may unexpectedly open as they
did in eastern Europe when the Berlin Wall came down in November 1989.  To
seize the opportunity, the board could draw from surplus endowment funds or
accrued interest rather than reallocating funds from other existing mission
programs.

Brad Hewitt, chief administrative officer for the Board of Directors, said
the ³risk management endowment² will serve as a model for other program
boards.

³It recognizes that the program boards need other tools in their financial
management toolboxes to help them manage both opportunity and risk,² Hewitt
said.  ³The mission board, especially Dr. OıShoney and board member Butch
[Kermit] Almstedt, deserve credit for developing creative models for
financial planning and management and, therefore, being good stewards.²

About 75 percent of the funding for missions comes from restricted sources
(gifts), which pose some unpredictability in developing each yearıs budget.
The endowment fund will offer stability by providing for shortfalls.  In
years when gifts exceed the budgeted needs of the mission board, half of any
unrestricted surplus will be put into the endowment, with the other half
provided to the Synod.

The plan calls for a portion of the principal to be protected to provide an
emergency fund.  Additional principal and interest earnings will be used as
a mission opportunity fund.

A similar endowment fund will be created as part of an agreement in which
the Board of Directors approved a $14 million loan guarantee to the
Concordia University System/Board for Higher Education. The LCMS will
guarantee a loan so Concordia University, River Forest, Ill., can proceed
with construction of a classroom-learning center.

With the guarantee, the university will be able to obtain tax-exempt
financing in order to complete capital projects leading to construction of
the Walter and Maxine Christopher Center for Learning and Leadership.

Meanwhile, CUS/BHE proposed an endowment to serve as an emergency fund which
would be used to cover LCMS debt guarantees.  In the future, when the fund
reaches $10 million, it will be used as an emergency fund if colleges or
universities are unable to meet debt covenants.

Hewitt said the Board of Directors spent ³a considerable amount of time² on
the action in order to formulate an approach that meets Board policy on loan
guarantees.

³It took a great deal of dialog to specify the process by which we can feel
comfortable with the guarantee,² Hewitt said.  ³In essence, this becomes a
guarantee of the Board for Higher Education, so it conforms to the policy of
the Board of Directors.²

He said this is ³a circumstance where a guarantee makes sense.²

Among other actions, the Board adopted a proposal by the Board of Managers
to amend the Concordia Health Plan to increase prescription drug copayments
by $5.  Another change ‹ affecting members who obtain maintenance
medications at the local pharmacy instead of through the mail-order service
offered by CHP ‹ requires members to pay the greater of the mail-order copay
or 50 percent of the cost of the drug.

Also approved was an amendment to eliminate the waiver of contributions to
CHP for a totally disabled worker.  Instead, the workersı contributions will
be paid by the Concordia Disability and Survivor Plan.

Other Board actions:
--Appointed Rev. Richard L. Thompson, Watertown, Wis., to a vacancy on the
Commission on Theology and Church Relations.
--Appointed John Edson, Plymouth, Minn.; Warren Puck, Manning, Iowa; James
L. Bode, Union City, Ga.; and Richard Peters, Amery, Wis., to three-year
terms as members-at-large of
the Lutheran Church Extension Fund (LCEF).  Ernst Heinecke, Collierville,
Tenn., and  Pat Cobb, Cedar Rapids, Iowa, were elected as first and second
alternates.
--Reminded the Board for Congregational Services that, according to the
synodical Handbook, it continues to be responsible for stewardship
activities even though the stewardship staff was recently transferred to the
LCMS Foundation.  The Board noted that a Handbook change must be made by the
Synod convention.

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