wfn.org | Church Extension Weathers Rough 2001 Economy Well,

["Communication Ministries" <wshuffit@cm.disciples.org>]

Annual Report Shows; Q1 2002 -- Ahead of Budget
Date: May 9, 2002
Disciples News Service
Christian Church (Disciples of Christ)
E-mail: news@cm.disciples.org
Web: http://www.disciples.org

Contact: Contact Erick D. Reisinger, Church Extension
317-635-6500; bce@churchextension.org 

02a-45

     INDIANAPOLIS -- Church Extension, a Disciples-related
financial unit, did not escape the economic and emotional
challenges of 2001, according to an annual report issued
today. Nevertheless, a revamped 2002 budget and general
overall strength should leave Church Extension with modest
gains by the end of this year.

     "The economic downturn of 2001, the tragic events of
Sept. 11, and a record number of interest rate cuts during
the year, resulted in Church Extension's first net
operating loss since 1986," said the organization's
president, James L. Powell.

     Church Extension experienced a 2001 operating loss of
$357,252, down from operating income of $72,582 in 2000.
(An audited financial report is posted online at
http://www.churchextension.org.)

     Most of the loss was attributed to economic factors.
Federal Reserve interest rates
dropped a record 11 times during 2001, to their lowest
level in 40 years. Poor performance by market investments
accounted for an additional non-operating loss of $185,612,
Powell said.

     "While the economy is showing signs of recovery, we
know it usually takes an
organization more than one year to rebound from this kind
of loss," Powell said.  "We continue with a conservative
fiscal posture for 2002. With the approval of our board in
March, we cut operating expenses by more than $250,000 in a
revised 2002 budget. Further, we are focusing our efforts
to increase gift income." 

     The revised 2002 budget projects about $30,000 in
operating income, according to Erick D. Reisinger,
executive vice president and treasurer. 
     
     "Through April, at least, we are ahead of our budget,"
he said. "Perhaps more important, Church Extension remains
in a healthy financial position overall." 

     Church Extension's $21.83 million in net assets
represent 16.56 percent of the
organization's $131.78 million in total assets. The
industry standard is for net assets to
represent at least 3 percent of total assets.

     Further, investments continue to keep pace with loan
demand.
                                 
     "Investment notes placed with Church Extension grew by
more than $15 million during 2001," said Reisinger,
"totaling more than $109 million at the end of the year.
These investments are the keys to making loan funds
available to congregations as they build, renovate or
expand their facilities."

     The Sept. 11 tragedy slowed loan requests in the fall
of 2001. But by the end of the
fourth quarter, requests had regained their strength. That
growth continues in 2002, Reisinger said.

     Loans approved and not yet disbursed stand at $26.5
million, up from about $21.5
million at the end of 2001. 

     Furthermore, the 2001 loss didn't dampen commitments
to the New Church Ministry
movement, Powell said. 

     Church Extension is "well on the way" toward a
$265,000 goal in annual gifts for New Church Ministry in
2002, Powell reported. Disciples started 40 new churches
last year, about four times the annual number typically
started in the recent past. 

     "That momentum appears to be building this year, with
churches in a variety of stages of growth," said Powell.
"This is a movement that is already taking off for
Disciples. The desire is there. We need to be sure the
necessary funds are in place to fuel that passion."

     Despite the financial loss, Church Extension will
rebate $1,200 to the church wide
offering, Basic Mission Finance. The amount, which
represents 1 percent of Church Extension's 2001 allocation,
will go to assist other BMF partners who are in critical
financial condition. 

     Meanwhile, consulting and fund-raising staff logged
more than 710,000 miles in 552
church visits during 2001, according to the annual report.

                           -- end --

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