wfn.org | LWF 2006 and 2007 Budgets Register Surplus

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> LWF 2006 and 2007 Budgets Register Surplus.

Global Trends Have Financial and Operational Consequences for the

> LWF

ARUSHA, Tanzania/GENEVA, 26 June 2008 (LWI) ­ Because of
exchange-rate gains, the Lutheran World Federation (LWF) ended
the 2006 and 2007 financial years with a surplus for its Geneva
Coordination budget. Presenting his report to the LWF Council on
25 June, Treasurer Peter Stoll said the LWF had a surplus of USD
1.2 million for 2006 and USD 2.2 million for 2007.

After 2006, â??in 2007 we had another positive year,â?? Stoll
reported. All departments had a surplus?the General Secretariat,
USD 432,193; the Departments for Theology and Studies (DTS), USD
294,504; Mission and Development (DMD), USD 614,607; and World
Service (DWS), USD 840,387, the treasurer told participants in
this yearâ??s Council meeting. Since the accounts for 2006
presented at the March 2007 Council in Lund, Sweden had not been
audited yet, Stoll proposed that the governing body review and
approve both the 2006 and 2007 financial statements.

In addition to the Geneva Coordination budget, so-called A
budget, the LWF program and project budgets for the past two
years were mostly balanced. However, some write-offs amounting to
USD 282,943 in 2006 and USD 319,887 in 2007 were necessary.

The Evangelical Lutheran Church in Tanzania (ELCT) is hosting the
25­30 June Council meeting, in the northern town of Arusha. The
theme for this yearâ??s meeting is â??Melting Snow on Mount
Kilimanjaro?A Witness of a Suffering Creation.â??

> Consequences for the Global LWF Communion

Stoll pointed out that the LWF as a global communion was affected
by global trends, which clearly have an impact not only on the
organizationâ??s financial situation, but also on its operational
risks. These impacts have never been as strong as at present. The
largest influence has been that of exchange rate movements, which
have had a huge impact on the LWFâ??s financial results and budget
planning.

The global economic development also has a strong impact on the
ability of some member churches to pay their contributions and
contribute to the communionâ??s global activities and the Endowment
Fund, noted Stoll.

He went on to say that it was with pain that the LWF learned that
since the 2003 Assembly in Winnipeg, Canada, barriers between the
global South and Europe and Northern America have been reinforced
by such means as complicating visa procedures. This was having a
growing impact on the LWFâ??s ability to interview candidates for
positions in Geneva.

> Total LWF Income over USD 100 Million

According to the treasurerâ??s report, the total income of the LWF
for 2007 was USD 102.2 million, compared with USD 91.4 million in
2006.

The 2007 total expenditure was USD 96.8 million, compared with
88.1 million in 2006. As previously, around 80 percent of the
funds were earmarked for DWS.

The reserves, i.e. the net assets freely available to the LWF
amounted to USD 20.8 million at the end of 2007, according to
Stoll. Although the reservesâ?? target level is USD 15 million,
â??the situation is not quite as good as it looks.â?? The
renovation deficit of the LWF-run Augusta Victoria Hospital on
the Mount of Olives in East Jerusalem still amounts to USD 5.6
million. There are also some pending tax cases in DWS field
programs.

> Membership Contributions

Stoll reminded participants of the strong commitment made by
church leaders at the last Council meeting in Lund to pay fair
membership fees. The contributions have increased steadily over
the last decade, and amounted to USD 3.2 million in 2007. Part of
the increase is due to a stronger euro.

Around 70 percent of the member churches pay the membership fees,
said Stoll. He however noted that there were still too many
member churches that do not pay even a partial membership fee.
Other member churches, meanwhile, have increased their
contribution to the fair level. But much remained to be done
before the 90 percent target level by 2010 cStoll told the Council that it was â??crucial to manage the
different currency flows and treasury funds in such a way that
currency losses are minimized while at the same time trying to
maximize the interest gains.â?? This is because the LWF receives
income mainly in euros; US dollars; Danish, Norwegian and Swedish
crowns, and Swiss francs, while expenditure is mainly in USD, EUR
and CHF.

In this regard, the treasurer highlighted the cumulative surplus
of currency gains/losses of USD 5 million for the period
2001­2007. This surplus has actually been essential â??in
stabilizing the budget and in covering the regrettable
program/project write-offs. We have even succeeded in increasing
the reserves.â?? However, when the USD begins to appreciate, the
LWF will inevitably suffer some currency losses. Measures will
then need to be taken in order to minimize the negative impact of
a stronger dollar.

> A-Budget Situation Better

The Geneva Coordination budget is currently better than projected
three years ago. This is because support from German churches had
not decreased as much as previously anticipated. The financial
situation of German churches had improved with the economic
up-turn in the country over the last two years.

The 2009 projections of the A-budget currently show a balanced
result. However, much depends on the development of the Swiss
franc, euro and the US dollar.

> Eleventh Assembly in 2010

With regard to the 11th Assembly to be held in Stuttgart, Germany
in July 2010, Stoll reported that as of 31 December 2007, the
11th Assembly contributions amounted to USD 1.2 million. The
current projection was a total Assembly income budget of USD 2.15
million. In 2004, the Council approved and amount of USD 2.3
million for the 11th Assembly budget. The expenditure budget
would be adjusted according to this income projection, Stoll
indicated, but this would be the task of the 2010 Assembly host
church, the Evangelical Church in Württemberg. He warned,
however, of the substantial risks related to exchange rate
fluctuations.

> International Standards

For the first time, LWF accounts have been prepared according to
International Financial Reporting Standards (IFRS), Stoll
announced. After three years of account adjustments systems, the
LWF could now show stakeholders an internationally recognized
standard presentation of its accounts, an improvement that should
enhance the secretariatâ??s credibility.

Invoking the Council theme, Stoll called for a discussion of â??our
own impact on climate change,â?? and advocated investing in (carbon
dioxide) CO2 compensation for all air travel by LWF staff. This
could take the form, for example of a solar energy plant
installation on the roof of the Ecumenical Center in Geneva or
via DWS field programs. (1,095 words)

> *       *          *

There are around 170 participants in this yearâ??s Council meeting
including church leaders, officials from LWF partner
organizations, invited guests, stewards, interpreters and
translators, LWF staff and co-opted staff and accredited media.

The Council is the LWFâ??s governing body meeting between
Assemblies held every six years. The current Council was
appointed at the July 2003 Tenth Assembly in Winnipeg, Canada. It
comprises the President, Treasurer and 48 persons elected by the
Assembly. Other members include advisors, lay and ordained
persons, representing the different LWF regions.

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