Synod BOD apprised of tough philanthropic climate

(LCMS/Erik M. Lunsford)

By David Strand

Against the backdrop of the FY20–21 budget preparation season now underway, the Synod’s Board of Directors (BOD) received an unsettling report on the state of philanthropy in the United States at its Feb. 7 meeting in St. Louis.

Mark Hofman, executive director of LCMS Mission Advancement, summarized how changes in U.S. tax laws and other forces are combining to put additional financial stress on nearly all nonprofit organizations, including but not limited to religious groups and churches.

Following the 2017 Tax Cuts and Jobs Act, “the U.S. nonprofit sector entered a philanthropic contraction in 2018,” Hofman said, “and the contraction is continuing. Charitable giving in the U.S. is now at its lowest point since the Great Recession. After dropping 1.8 percent in 2018, donations given to nearly all nonprofit types declined nearly 7 percent through November 2019.

“Giving to religious organizations is declining the fastest, falling below 30 percent of total charitable giving for the first time,” Hofman said, quoting figures gleaned from the most recent annual study released by The Giving Institute.

Across the nonprofit sector, “individuals inclined to make annual gifts seem to be retreating,” Hofman continued, although “the Synod, compared with the average for other charities, is holding its own in terms of its contributor retention rate.”

Meanwhile, he noted, those donating are now more likely to “bundle” — giving nothing in one year and then much more in a following year (in order to exceed the standard deduction). “Such patterns will impose difficult challenges on those who are setting nonprofit fundraising goals and revenue forecasts.”

“This current nationwide contraction,” Hofman observed, “is unprecedented. Previous philanthropic contractions were linked to an economic recession or depression. But here we have a contraction in the midst of a stable if not strong economy, low unemployment and a stock market flirting with record levels.”

Hofman’s counsel to the BOD included “carefully assessing our ability to adapt in times of fiscal stress, closely monitoring contributor retention rates, and not simply assuming growth in gross contribution revenues commensurate with the overall economic expansion. People who give voluntarily are not ATM machines,” he said. “We must take very good care of them; they deserve no less than our best.”

President’s report

In his remarks to the Board earlier in the day, LCMS President Rev. Dr. Matthew C. Harrison had touched on a related topic. After expressing joyful appreciation for the consistently strong financial support LCMS missionaries are receiving from people all across the church, Harrison shared his concern for other areas of the Synod’s mission struggling to receive gifts, especially those gifts that can be used wherever the financial pressures or opportunities for impact are greatest.

Ongoing declines in congregational worship offerings forwarded to districts and the Synod create significant challenges. Harrison said that “giving to nonprofits and churches on the whole is down — and this is a constant concern.”

He ranged over other topics, both foreign and domestic. “The situation with our church in India is much improved,” he said, now that “an administrative court decision has rightly determined the proper oversight of a large trust controlled by that church. We’re in [a better] position now.”

Our world missions are “calm,” he continued. “[The Rev. Dan McMiller, executive director of the Office of International Mission], is doing a good job. Our regional directors are focused. There are blessings and challenges everywhere.”

He noted, too, that “we are close to moving forward on a Church Relations staff person,” a position vacant for nearly a year and which serves the Synod’s current international partner churches and emerging or potential partners.

Harrison said he was “very pleased” with the Office of National Mission (ONM), which oversees the Synod’s new triennial emphasis, Making Disciples for Life (MDFL). “The first [MDFL] conference, in January, was a success,” he said, “a ‘sellout.’ In fact, we had to turn away 125 potential registrants. We’re looking forward to the second conference taking place in April in Fort Wayne.”

These gatherings, Harrison said, “pull all our best resources together and invite a broad cross-section of the church, along with our ONM staff and others, to come talk and learn from one another. We’re mentoring leaders and improving how we do ministry across the board. Everyone shares the goal of helping our congregations become as strong as possible.”

Feedback on MDFL

In his report, Chief Mission Officer (CMO) Rev. Kevin Robson continued the theme of the MDFL initiative. “Through the plenary sessions, breakouts and table-talks at the January conference, we received excellent, critical feedback on how to sharpen and shape future conferences,” he said.

Further, he added, the creation and ongoing enhancement of a web-based hub “will give laypeople and church workers tremendous access to the best resources the church has to offer. An AI [artificial intelligence] component will help us understand the critical questions being asked, enabling us to more directly route users to effective answers.”

Robson updated the Board on the church-worker student-recruitment project, now completing its research phase. A focus-group study has been conducted, and following a forthcoming, expansive survey of LCMS church workers, youth and youth directors, the effort “will move into its outward-focused campaign to dramatically increase the enrollments of future pastors and all other church workers at our seminaries and Concordia universities.”

The CMO returned later to apprise the Board of progress made toward fulfilling 2019 Convention Res. 4-04A, which directs the boards for International and National Mission to, in Robson’s words, “invite deeper and wider participation by congregations, circuits and districts in working with the mission priorities and emphases of the Synod.”

“Working with” means becoming familiar with these things, studying them from a theological perspective, and learning how to better frame them or formulate new ones for consideration at future conventions. To that end, Robson said “a new tool is coming — a discussion guide — to engage the Synod in conversations about what the church’s mission priorities and emphases are all about.”

‘Cautious’ about budget

With the retirement of Chief Financial Officer (CFO) Jerald C. Wulf, Chief Administrative Officer Frank Simek has taken on the role of acting CFO. A committee of the Board interviewed candidates for Wulf’s full-time successor in the days prior to the meeting; the full BOD will interview the finalists at the Board’s May meeting.

In his financial report, Simek noted that while the Synod’s revenues were down as of Dec. 31, its bottom line stood at $235,000 in the black thanks to several units underspending their budgets.

“We’re trying to control costs as much as we can,” he said. “In today’s market, our investments are performing very well, but unrestricted revenues are down $400,000.”

Overall, Simek expressed a cautious attitude about budget preparation and forecast for the coming year. “There is big pressure on the Operations Team to balance the FY20–21 budget,” he said. “Do we push off new hires? Reallocate workloads? Certainly we will spend only as necessary. We have to figure out where the ‘gives’ and ‘takes’ are.”

Other business

The Board also:

Received reports from its Personnel, Audit and Governance committees;

Heard an update from BOD member Christian Preus, chairman of the Res. 7–03 Committee, which is tasked with proposing a new governance plan for the Concordia University System;

Elected Rick H. Stathakis, supervisor of Shelby Township, Mich., as a voting member of the BOD, filling the vacancy created by the retirement of James Carter;

Elected Patrick R. Kyler, Columbia City, Ind., as the Board for National Mission’s lay member representing the Central Region;

Appointed the Rev. Dr. Scott R. Murray, Houston, to the Supervisory Board of the International Lutheran Society of Wittenberg (ILSW). Murray replaces the Rev. Dr. Michael L. Kumm, chairman of the Synod’s BOD, who has retired from the ILSW board; and,

Deferred until May any action on repurposing Board-designated funds.

As always, readers interested in more information from the meeting can read the Synod Secretary’s minutes once they are posted on the BOD’s website.

The Board next meets May 15–16.

Posted Feb. 25, 2020