wfn.org | United Methodist mission agency pursues budget cuts

[NewsDesk <NewsDesk@UMCOM.ORG>]

Oct. 26, 2001  News media contact: Linda Bloom7(212) 870-38037New York
10-21-71B{493}

NOTE: For related coverage of the United Methodist Board of Global
Ministries' meeting, see UMNS story #494. Stephen Feerrar's name is spelled
correctly.

By Linda Bloom*

STAMFORD, Conn. (UMNS) - Budget cutting and the re-designation of funds were
a major focus when the United Methodist Board of Global Ministries met Oct.
22-25.

The deliberations followed actions already taken by the board's staff
cabinet in early October to curb spending, including through staff
reductions. In total, 98 staff positions were cut, but only about half that
number represented people actually let go.

Cuts in staff and programs have not been made arbitrarily, according to the
Rev. Randolph Nugent, the board's chief executive. "In order to pay all
bills in 2001 and recommend a balanced budget for 2002, there needed to be a
reduction in the amount of $11 million," he said in his address to
directors.

"Our investment portfolio lost $21.3 million in value over a two-year
period," he continued. "The cabinet needed to find $11 million in cuts over
both years, and in the end you will see that the 2002 budget is $8.6 million
lower than the 2001 budget."

General funds that the board receives from the church as a whole also have
come in lower than projected. That was a factor as well when directors
approved a total budget of $96.6 million for 2002, compared to an original
budget of $105.1 million for the previous year.

Directors approved the re-designation of some net assets, with $3 million
allotted to support the 2001 operations and more than $8 million to be used
for the 2002 operating budget.

Joyce Sohl, chief executive of the Women's Division and the board's acting
treasurer, reminded directors that this is not the first time in the board's
history that cuts in program, staff and operating expenses have been needed.

Some of the current financial difficulties have their origin in problems
that occurred over a number of years, she added. One example was the cost of
missionary support in the former World Division. "It was eating up available
funds, and many a budget had to be readjusted to care for
over-expenditures," she explained. "This problem continues with increased
number of personnel, increasing costs of health care and increased costs of
providing funds for place of assignment needs. This is the major reason for
expenditure readjustments in 2001 and into the future."

Earlier in October, board officials cited higher-than-anticipated expenses
in the agency's popular "10-10-10" mission program as part of the current
budget problem, due to substantial insurance costs and less financial
support than expected from annual conferences. Actions to curb those
expenses, in terms of limiting salary and insurance benefits, were adopted
at this meeting. 

A declining stock market also has had a major impact on the Board of Global
Ministries, which had become used to higher returns. "Combine this with the
fact that recent changes in accounting rules require us now to book
unrealized capital gains and losses, (and) we see the balance sheet of the
board having peaks and valleys that we would not have experienced
previously," Sohl said.

During 1996-99, as the stock market was booming, the mission agency
designated its capital gains for new and expanded mission programs to be
implemented over five to 10 years. Those programs included new missionary
categories, such as the W.T. Handy Young Adult Missionaries, renovation of
health care facilities around the world and a land-mine removal project.
Some of those funds have been re-designated to help balance the budget in
2001 and 2002.

"In the midst of all the changing financial realities, the Women's Division
and United Methodist Committee on Relief (UMCOR) are holding steady," Sohl
told the directors. "Income from United Methodist Women appears to be
keeping pace with last year. The One Great Hour of Sharing offering (which
covers UMCOR's administrative costs), as of the end of September, is up 5.2
percent over last year."

UMCOR's current offering to assist in recovering from the Sept. 11 terrorist
attacks "is coming in at an increasing rate and has the potential for being
one of the all-time highs in designated giving through UMCOR," she said.

The Board of Global Ministries is continuing to plan for a major mission
event, the Global Gathering, set for April 2003 in Birmingham, Ala. The
fourth in a series of such events, the gathering is considered crucial
because "it mobilizes and energizes the church for the mission task in ways
which know no parallel in our denomination or beyond," according to the
mission development committee, which brought the proposal for funding.
Directors approved a recommendation that $1 million be set apart in 2003 to
create a fund for the gathering's expenses.

Other important mission work will continue next year through the board's
program development fund. For example, up to $150,000 was set aside for
expenses associated with the work of the Russia Initiative, and a $190,000
grant was approved for the United Methodist Russia Annual Conference for its
activities in Russia, the Ukraine, Moldova and Kazakhstan. The Russia United
Methodist Theological Seminary and its advisory committee also received
grants of $25,000 and $47,000.

A $300,000 fund will be used for new mission initiatives in Russia and other
countries, including Lithuania, Latvia, Senegal, Cameroon, Cambodia, Nepal,
Honduras, El Salvador, Vietnam, Laos and Mongolia.

Directors said farewell to Stephen Brimigion, who retired as the board's
treasurer in June, and elected Stephen Feerrar to replace him. Feerrar, a
member of Centreville (Va.) United Methodist Church, previously had been
chief financial officer for the international division of PPL Corp.
(Pennsylvania Power and Light).

# # #

*Bloom is news director of United Methodist News Service's New York office.

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