wfn.org | Raising Funds for LWF's Work a Challenge and Commitment

["Frank Imhoff" <Frank_Imhoff@elca.org>]

Raising Funds for LWF's Work a Challenge and Commitment for Everyone
LWF Treasurer Stoll Calls for Payment of Fair membership Fees and Priority Setting Process

LWF-Council Meeting, Geneva 1 * 7 September 2004

PRESS RELEASE NO. 05-2004

GENEVA, 2 September 2004 (LWI) * The Treasurer of the Lutheran World Federation (LWF), Mr Peter Stoll, today called on LWF Council members and the member churches to share in the process of fund raising, saying this should be a challenge and commitment for everyone. "Please try to bring us new ideas," Stoll appealed in his report to the Council meeting in Chavannes-de-Bogis near Geneva. Apart from efforts to raise earmarked funds for projects and programs, there should be emphasis on the payment of fair membership fees and on the Endowment Fund.

The present income was not sufficient to carry out all the tasks of the LWF. Setting new priorities would not be a solution "because all our priorities are on the same level," said Stoll who was elected treasurer of the LWF in August 2003 by the then newly elected Council in Winnipeg, Canada. Therefore is was necessary to have a proper priority setting process in which "some less important priorities can be set aside to wait for better times." 

Eighty-seven percent of the financial resources available for the LWF's work were earmarked and therefore tied to clearly defined projects, programs and units. The non-earmarked income of the LWF consisted to 2.5 percent of membership fees of which 0.1 percent came from the LWF Endowment Fund and one percent from interest on LWF investments. However, "non-earmarked" did not imply that this money was freely available. "Owing to previous decisions, the use of the non-earmarked funds has also been predetermined," Stoll explained.
The treasurer pointed out that the General Reserves was at a minimum level of USD 8.6 million representing 9.4 percent of the annual expenditure. It was crucial that this level is maintained to cover any unforeseen emergencies in the future. To draw further on the reserves would clearly contradict the idea of sustainability, Stoll emphasized. In the midterm, the budget must be balanced without having to fall back on the reserves. 


Evidence of Financial Solidarity in the LWF, but Reduction toward Geneva Coordination Budget

Although there was clear evidence of great financial solidarity in the LWF over the past few years, the income for the Geneva Coordination Budget had been going down, the LWF treasurer reported. With the current income pattern, the new level of a sustainable Geneva Coordination Budget was CHF 12.5 million. This constituted a reduction of CHF 1 million compared with the 2004 budget and of CHF 2 million against the 2001 budget.

The LWF's budget consists of two parts: the Geneva Coordination Budget (A-budget) and the Statement of Needs for programs and projects (B-budget). Stoll said that the A-budget was around 8-10 percent of the total expenditure. It was very difficult to raise funds and have program cooperation agreements that covered the A-budget in Geneva, although most of the work carried out in Geneva was actually program work, he said. Personnel costs comprise 80 percent of the A-budget, so reductions there, he noted, would imply staff reduction.

The total income in 2003 amounted to USD 94.8 million USD compared with USD 89.7 million the previous year. Of this amount, USD 10.7 million was allocated to program and coordination work in Geneva, while USD 84.1 million was spent on programs and projects outside of Geneva, Stoll reported.

The total expenditure in 2003 was USD 97.8 million compared with USD 91.1 million in 2002. Of that amount USD 11.2 million was allocated to the Geneva Coordination Budget. Programs and projects outside Geneva accounted for USD 86.6 million.

The net balance for the LWF's activities in 2003 reflected a deficit of USD 552,000 whereas the budget had allowed for a deficit of USD 660,000. The General Reserves had declined by 552,000 USD to USD 6.4 million at the end of 2003, the treasurer observed.


Need to Respect Sustainable Development Guidelines

As a basic principle for LWF's work, Stoll referred to the need to respect the guidelines for sustainable development in the projects and programs. So it was only natural "to choose the principle of sustainability as the guiding principle for the management of our finances here in the LWF". The management of finances should serve the aims of the LWF. It should be conducted in the spirit of good stewardship. The finances should serve the work of the LWF rather than the LWF serving the finances. But the effect of the financial situation required limitations on some activities.

Stoll stressed, "We are a communion and we can build on our togetherness." Some of the largest member churches were facing considerable financial difficulties which inevitably had an impact on their support of the LWF. For example, the German Church Development Service (EED) will cut its support toward the LWF Geneva Coordination Budget by 30 percent over the period 2005-2009, the LWF treasurer reported. On the other hand, there were some member churches which could increase their support if the LWF were a high priority in their life. "Therefore the understanding of the LWF as a communion of churches with all its implications should be spread and owned everywhere," Stoll observed.

The LWF relies on its member churches and their related agencies. So far it had been agreed that the LWF would not raise funds directly in the member churches' constituency. "However, sometimes the LWF may have programs or projects which are not a priority either of the member church or its related agency but which their constituency, such as dioceses, still might want to support," Stoll continued. His question to the Council members was, "On what terms could there be direct links between the LWF and the constituency of a member church?" He pointed out that so far the mission agencies of most of the Nordic member churches have had relatively little cooperation with the LWF. Increased multilateral cooperation through the LWF would bring more funds for both the programs, projects and coordination, the treasurer noted.

Other resources must be used for the financial stability of the LWF while at the same time working to solve the financial problems, Stoll underlined. He urged Council members to visit the member churches in their own and other regions in order to increase awareness and ownership of the communion. All member churches should pay the full fair membership fee, Stoll emphasized. This would bring in additional income of around CHF 700,000 annually. Promotion of and wider participation in the LWF Endowment Fund were also necessary. A subsidiary aim was to increase the capital in the Endowment Fund to CHF 10 million. The current level of pledges and capital amounted to CHF 8 million with a long term goal was eventually to reach CHF 50 million.

Proposals to Work More Efficiently

Concerning fair membership fees, Stoll explained that this was calculated on the basis of membership size and the overall financial situation in each country. Some member churches were already paying the full amount of their fair membership fee or even more despite the fact that they had financial problems themselves. But there are churches that had not been paying their full fair membership fee, and were thus urged to reach this goal. The Nordic churches, especially, needed to raise their membership fee amounts, the treasurer noted.

To improve efficiency, Stoll suggested the period between two Council meetings be reduced from 12 to 14-18 months, a proposal already presented in the General Secretary's report to the Council in 2001. This would result in savings of around CHF 350,000. The cost of future Assemblies should also be reduced, he noted.

As an additional possibility for reducing the costs of coordination and administration, Stoll put forward for discussion the idea of moving the LWF Geneva office to some other place. He explained that this idea had already been examined some years ago. At that time it had been concluded that the costs of closing the Geneva office and of the removal were too high in comparison to the annual savings at a new site. But the situation might have changed since then, Stoll suggested.

Another proposal made by the treasurer was to combine the resources of the LWF Department for Theology and Studies, Office for Ecumenical Affairs and the Institute for Ecumenical Research in Strasbourg, France. In doing so, he said, either some money could be saved or more work than before could be done with the same amount of money.

Also if the LWF could combine more resources with those of the World Council of Churches and other sister organizations, that would save money. (1,438 words)

There are around 100 church representatives including the 49-member Council attending this year's meeting at Chavannes-de-Bogis near Geneva. In addition there are 70 participants comprising invited guests, LWF staff persons, stewards interpreters and journalists. The Council is the LWF governing body between Assemblies, normally held every six years. The current Council was elected at the July 2003 LWF Tenth Assembly in Winnipeg, Canada, where it held its first meeting. The Council comprises the President, the Treasurer and ordained as well as lay persons drawn from the LWF member churches. The LWF currently has 136 member churches in 76 countries all over the world, representing 62.3 million of the estimated 66 million Lutherans worldwide.  

During the Council meeting, the LWF Office for Communication Services can be reached by telephone at +41 22 960 8282, or (mobile) +41 (0)76 396 2863.

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(The LWF is a global communion of Christian churches in the Lutheran tradition. It was founded in 1947 in Lund, Sweden. The LWF acts on behalf of its member churches in areas of common interest such as ecumenical and inter-faith relations, theology, humanitarian assistance, human rights, communication, and the various aspects of mission and development work. Its secretariat is located in Geneva, Switzerland.)

[Lutheran World Information (LWI) is the LWF's information service. Unless specifically noted, material presented does not represent positions or opinions of the LWF or of its various units. Where the dateline of an article contains the notation (LWI), the material may be freely reproduced with acknowledgment.]

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