By Cheryl Magness
The Lutheran Church—Missouri Synod (LCMS) Board of Directors (BOD) met at the LCMS International Center (IC) in St. Louis May 18–19. Opening his report to the Board, LCMS Chief Mission Officer (CMO) Rev. Kevin Robson introduced what would become one of the themes of a meeting largely focused on the next fiscal year’s (FY) budget:
“With a couple of exceptions, you are not going to see a lot of ‘whiz-bang’ initiatives or positions or programs presented today. We are intending, in the coming year, to stay the course and remain steadfast with existing strategic and operational plans.”
Robson added, “We are always self-evaluating” so as to “shed programs that are providing little impact to the mission and ministry of the church.”
Strengthening connections
Robson introduced the chairmen of the LCMS Boards for National Mission (BNM) and International Mission (BIM), the Rev. Steven Briel and John Edson, respectively, who were invited to the meeting for the second year in a row as part of a larger effort to strengthen the working relationship between the BOD and the mission boards. Briel said, “We appreciate being with you. … It’s a marvelous thing that you invite us in to do this. It keeps our boards together.”
Briel described the mission boards’ work over the last triennium to visit, either in person or via video conferencing, all 35 LCMS districts to discuss and assess the Synod’s triennial mission emphasis and mission priorities. The visits grew out of 2019 Resolution 4-04A, “To Expand and Strengthen the Input with Which the Synod’s Triennial Mission and Ministry Emphases Are Determined.”
About the visits, Briel said, “We had some great comments, but we also discovered that some of our districts don’t use [the mission and ministry emphases] at all. … We want to … look at that process and see how we can help them utilize those mission priorities as part of their mission and ministry to the Synod.”
President’s report
LCMS President Rev. Dr. Matthew C. Harrison spoke on several topics, focusing on preparations for the 2023 Synod convention and highlighting what are expected to be the major items of business at the convention, including a new governance proposal for the Concordia University System; the recent attempt by Concordia University Texas (CTX), Austin, Texas, to remove itself from Synod governance; and the Synod’s relationships with its partner churches. Harrison also emphasized the importance of visitation at all levels of the church, from parish pastors visiting their flocks to district presidents visiting their congregations to Synod officers visiting international partner churches.
“It takes a lot of time,” Harrison said. “It’s expensive. I am on the road more than 200 days a year. … But it’s at the core of what Luther described as the office of the overseer. It’s the time that questions are asked, answers provided, rumors quelled. Sometimes it just means listening. But if it isn’t done, deterioration occurs. It’s invaluable.”
Farewell to Kumm
Following IC chapel on Ascension Day, May 18, Harrison invited outgoing BOD Chairman Rev. Dr. Michael L. Kumm forward to greet the assembly and introduce the members of the Board. Noting that several Board members, including himself, had reached the end of their service, Kumm said, “This is the last Board meeting for a few people here. This … is one of the most collegial boards I have ever worked with [in] my entire life. They work hard; they love their Lord; they love their church. Thanks be to God.”
Harrison acknowledged Kumm and the two other departing members, Keith Frndak and Ed Everts, adding, “It’s been a fantastic run, through unending challenges and blessings that have come in the midst of it all, and we can’t thank you enough.”
CUS governance
In light of the CUS governance proposal and the attempt by CTX to separate itself from the Synod, the Board spent a significant portion of its meeting discussing issues related to LCMS higher education. Res. 7-03 Committee Chairman Christian Preus reviewed the history of 2019 Res. 7-03, the third consecutive directive of the convention to revise university governance, which, rather than assigning the matter to a task force, this time entrusted it to the BOD.
Preus began with Res. 7-03’s adoption in 2019 and outlined the development of a proposal adopted two years ago by the BOD for distribution and comment. He described extensive meetings and conversations followed by the preparation of an alternative draft — taking into account input from various stakeholders — earlier this year. In light of continuing input on that alternative draft, the BOD adopted a resolution to submit a late overture for consideration by Floor Committee (FC) 7 on University Education.
More information about the late overture, the CUS governance proposal and the CTX are available at lcms.org/cus-future. FC 7’s proposed resolutions are printed in the first issue of Today’s Business, available at lcms.org/convention/national/publications.
Budget
Synod Chief Financial Officer (CFO) Nathan Haak, accompanied by LCMS Accounting and Financial Services Executive Director Chris Wood, reported on year-to-date finances and giving trends as of Feb. 28 and on projections through the end of FY23 (June 30). Haak noted that total revenue (excluding mark-to-market) is expected to meet or slightly exceed budget, expenses are well below budget in all areas, missionaries are funded 400 days out, and the Synod’s financial position and liquidity remain strong.
Haak then introduced the operating and capital budgets proposed by the Synod operations team for FY 2023–2024 (July 1, 2023, to June 30, 2024) and presented a proposed FY24 revenue estimate and a proposed FY24 operating budget expense request.
The Board heard presentations by officers and unit executives on strategic aspects of major blocks of the expense budget, including the Office of the President and KFUO Radio; the CMO (National and International Mission, Mission Advancement, Communications and Pastoral Education); Concordia Historical Institute; the Commission on Theology and Church Relations; the CUS; the chief administrative officer (BOD, Legal, Human Resources, Informational Technology and Support Services); the Office of the Secretary; and the CFO.
Haak then presented the FY2024 Mission and Ministry budget resolution, which included $83,412,301 in planned expenditure and a $28,407 surplus, supported by $79,370,708 in total revenue (including a $8.38 million release of restricted gifts already on hand) and $4,070,000 to be released from Board-designated funds.
The resolution was moved and seconded. The Board discussed the budget proposal, with BOD members expressing appreciation for the clarity of Haak’s presentation and his desire to take gradual steps in a multi-year timeframe to “correct course” from a budget balanced with one-time items, board releases and interest and investment income, toward a budget balanced in an operating sense. Board member Rick Stathakis commented, “This guy [Haak] just got here, and he’s already done some great things.”
Much of the budget discussion revolved around the $8.38 million in net releases of gifts on hand and the requested $4.07 million in board releases, with Haak noting that granting is a large contributor to the former, which can be moderated as needed if funds are not available. Also, FY23 planned a net release of $6.96 million in restricted gifts but instead realized an accumulation of $3.5 million — more funds awaiting timely expenditure. Haak added that the majority of the $4.07 million in requested board releases is, in this budget, for specific projects rather than annual operating expenses.
In response to a BOD member’s question as to whether Mission Advancement could simply raise the required amounts, Haak explained that raising for specific projects “perpetuates the problem”; the more projects are raised for, the more unpaid overhead is generated.
After some discussion, the Board unanimously referred the budget to the CFO with the instruction to reduce unrestricted expenses by $2 million, an amount slightly less than a $2.4 million reduction initially proposed.
Haak presented the revised budget to the Board in its June 7 meeting, noting that the proposed $2.017 million reduction amounts to 16% of “actionable” unrestricted spending, heavily weighted in support services, which are already, at 8.6% of the total expense budget, operating at a “best-in-class” ratio. He explained that while the reductions proposed would meet the Board’s specifications in a rapidly achievable way, difficult strategic decisions remain to be made in future fiscal years. Reductions included two vacant positions and the digital platform project in LCMS Communications ($795,000), approximately half the undesignated budgets to the Offices of National and International Mission ($249,000 and $87,000, respectively), a review process for Finance/CFO/Audit ($170,000), a reduction of officer contingencies and of one proposed risk management position, and various other minor reductions.
With these changes, the proposed budget includes $81,345,301 in planned expenditure and a $28,407 surplus, supported by $79,304,708 in total revenue (including release of $8.38 million in restricted gifts on hand) and release of only $2,069,000 in Board-designated funds.
After some discussion, the Board adopted Haak’s amendment and then the amended operating budget, with Kumm and Harrison commending Haak and the Operations Team as well as all staff who engaged in a difficult labor to achieve the requested reduction. Haak noted that staff will exercise great care not to start activities or hire staff in areas that will not likely be able to be sustained, and again noted that the right long-term strategic changes will require consistent work, including by the Board, in months to come.
Other business
In other business, the Board approved:
- A variety of appointments to Synod entities;
- The establishment of a not-for-profit association in Papua New Guinea;
- The adoption of a new policy for standardizing the Board’s handling of subordination of reversionary rights with regard to property held by agencies of the Synod; and
- Phoenix as the location of the 2026 Synod convention.
In executive session, the Board also interviewed finalists to fill the role of LCMS chief administrative officer (CAO), replacing retiring CAO Frank Simek. On May 25, the Board announced the hiring of Felix Loc, a member of Messiah Lutheran Church, Keller, Texas, as CAO, with an expected start date in July. More information about Loc and his installation, scheduled for Sept. 14, will be provided when available.
Full minutes of the May BOD meeting will be posted, when available, at lcms.org/bod.
Posted July 18, 2023/Updated July 20, 2023
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