BOD weighs monetary, membership challenges

By David Strand

NEW ORLEANS — At its meeting here Nov. 16–17, the Synod’s Board of Directors (BOD), both on its own and in a 90-minute joint session with the Council of Presidents (COP), fixed its gaze on “facing the realities” of the Synod’s finances and membership demographics.

LCMS President Rev. Dr. Matthew C. Harrison noted that a recent demographic study of the LCMS suggests that the Synod will continue to lose membership over the next 10 to 15 years before seeing that number stabilize. Rather than relying on a single solution to address this issue, thereby ushering in a new era of growth, he suggested that a combination of approaches is called for, and that the church already is positioning itself to bring that about.  

For one thing, “we must evangelize,” Harrison said, pointing to the promise of the Synod’s new Every One His Witness outreach program. He also noted that the Synod’s congregations need to focus on the retention of current members. “The baby boomers are well along in moving through the church,” he said. “Then come the millennials, the largest demographic group ever; we need to concentrate on them.”

Meanwhile, he added, “the LCMS is diversifying [in membership] slowly over time, which is a good thing.” But while the potential for increased diversity is strong, especially among African immigrants, “very few ethnic mission starts become self-sustaining congregations.”

Speaking about the LCMS Inc. budget, Harrison said the national office is “holding steady” while continuing to be “very cautious” and always on the lookout for savings. He praised the generosity of LCMS donors whose response to the rash of natural disasters in 2017 has netted (as of this writing) more than $7 million, of which, after donor-care costs, at least 94 percent will go toward helping affected people.

Budget ‘full of challenges’

At the Board’s joint session with the COP, LCMS Chief Financial Officer Jerald Wulf, along with LCMS Executive Director of Accounting Ross Stroh, gave an overview of the Synod’s national-office budget, with emphasis on giving patterns over the past 40 years.   

“Our budget is full of challenges,” said Wulf. “It has many moving parts, and we rely heavily on restricted funds.” 

Even though total congregational receipts (Sunday-morning offerings) have continued to grow, now nearing $1.5 billion a year, Wulf said that over the past 30 or so years, the district and Synod shares of that pool “have stayed relatively flat [regarding the districts — although the last three years have shown a decline] and continued to decline [regarding the Synod — although the last three years have shown less of a decline].”

A telling statistic: In 1975, for every dollar contributed to the districts from congregations, the national office received 6.1 cents. Today, the Synod gets nine-tenths of a penny.

Accounting for inflation, since 1981, the purchasing power of the share of offerings passed from congregations to districts (of which the contribution from districts to Synod is also a shrinking part) has declined approximately five-fold.

Said Wulf: “As mission opportunities and tasks assigned by the convention are always increasing — along with offerings to congregations — revenue shared with districts and Synod has not kept up with the work to be done.”  

“The Board of Directors knows our finances are not what they used to be,” said BOD Chairman Rev. Dr. Michael L. Kumm. “We are working hard to trim the budget, doing the most with the dollars we have.”

Both Kumm and Harrison expressed gratitude for newly arrived Chief Administrative Officer Frank Simek, who will play a key role in finding efficiencies in the Synod’s corporate operations and exploring ways of sharing expenses with Synod-related entities like Concordia Plan Services, Lutheran Church Extension Fund and the LCMS Foundation.

Response to Hurricane Harvey

For his part during the joint session, COP Chairman Rev. Ken Hennings, president of the Texas District, spoke mainly about disaster-relief work in the Lone Star State. 

“Harvey was an interesting hurricane,” he said. “He came ashore in Texas three times.”

Hennings spoke of “a spirit of getting things done by all involved — Synod, district, congregations, Recognized Service Organizations, families and neighbors, everyone. Our working with St. Louis has been wonderful.”

Chief Mission Officer Rev. Kevin D. Robson, calling the Harvey relief effort “a 24- to 36-month response,” said the Disaster Response arm of LCMS World Relief and Human Care “has funded virtually every request received from ministries in the Texas District.”

Ongoing efforts, he said, will focus on the provision of materials, the long-term care of professional church workers, and community development work, not least in “inner-core” urban neighborhoods.

Hennings said the members of the COP “continue to engage in honest, open dialogue with one another,” and that such “candid communication needs to keep growing.”

Kumm, likewise, characterized the BOD as “very collegial,” boasting a “vast spectrum of knowledge and experience.” The great majority of the Board’s decisions, he said, “come by consensus rather than conflicted votes.” 

Two overarching goals of the Board, Kumm added, are “bringing the corporate entities of the Synod closer together” and “making the BOD more efficient as a governing board.”

Concordia Plans ‘well-positioned for future’

The Board heard a presentation from James Sanft, president of Concordia Plan Services (CPS), the LCMS entity that administers the health and retirement plans of the church. Sanft was introduced by Frederick G. Kraegel of Richmond, Va., the outgoing chairman of the CPS Board of Directors who, after nearly 12 years on the board, is reaching his term limit. The Board warmly applauded him for his service.

Kraegel opened by saying “the Plans are adequately funded and well-positioned for the future,” adding that the 2014 retirement-program changes are having the desired effect of putting the Concordia Retirement Plan on track to meet long-term funding targets.

Sanft shared that CPS, as a leader in the church-benefits community, continues its work with regulators and legislators in the nation’s capital. Recent successes have come in the areas of regulatory relief for religious employers under the Affordable Care Act and in getting church-plan issues recognized in tax-reform efforts.

Sanft reminded the BOD that Plan demographics are lay-worker driven and highly dependent on educational institutions. Compared with other denominational benefit plans, he said “the lay and education workforces of the LCMS give us a real advantage in managing these programs over the long term,” describing these groups as the “economic engine of the Plans.

“This is what makes our schools so important,” he explained. “A robust and growing school system, including our Concordia University System, employs a great number of lay personnel, many of them generally young and healthy. This helps broaden our risk pool and keep our rates more stable for everyone.”

Other business

During the balance of its meeting the BOD, among other business:

• heard an external audit analysis of LCMS Inc.
• received reports from its Personnel and Governance committees.
• received an update from Synod Secretary Rev. Dr. John W. Sias on a BOD task force taking up recommendations from a Board retreat last summer regarding the BOD’s role in helping the Synod move forward on its priorities and objectives, clarifying the Board’s expectations of related corporate entities and their officers, and other topics.
• welcomed Steven Winkelman, head of school at Concordia International School Hanoi, and Dr. Mary Scott, head of school at Concordia International School Shanghai, to discuss proposals for expansion of work at both sites.   
• adopted a resolution to update BOD policy affirming the chief mission officer’s responsibility, per LCMS Bylaw 3.4.3.6., to oversee, coordinate and approve all departmental and unit plans “that include fundraising activities or otherwise involve revenue and charitable contributions” such as gifts, grants and bequests — this being the conclusion of a gradual process of revision begun with the Synod’s 2010 restructuring. 
• adopted a resolution for an infrastructure loan request, a property purchase, and renovation costs at Concordia College, Bronxville, N.Y.; Concordia University Chicago; and Concordia Seminary, St. Louis, respectively.
• suggested the Synod’s Operations Team work with unit executives early in the budget-setting process for the upcoming fiscal year (2018–19) to “right size” the Synod’s expenditures in accord with revenues and continue intensive efforts toward a stronger financial position. 

The Board next meets Feb. 16–17 in St. Louis.

David Strand (david.strand@lcms.org) is executive director of LCMS Communications.

Posted Dec. 19, 2017