BOD adopts $80.6M budget for FY25

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The Lutheran Church—Missouri Synod (LCMS) Board of Directors (BOD) met May 16–18 on the campus of Concordia Theological Seminary, Fort Wayne. A key item of business was the consideration and adoption of the Synod budget for Fiscal Year (FY) 2025, which runs from July 1, 2024, through June 30, 2025.

After a series of in-depth mission and ministry presentations from Synod leaders and extensive discussion among BOD members, the board approved an $80.6 million operating expense budget for FY25. The budget reflects an anticipated $78.6M in total revenue and net asset releases, $2.01M in board-designated releases, and a surplus of $51,000. The board also approved a capital budget of $1.75M, driven by two large items: the implementation of a new lcms.org digital platform and the continuation of the move of KFUO’s tower, begun last year.

Budget overview

LCMS Chief Financial Officer Nathan Haak began his budget presentation by reviewing third-quarter (through March 31) financials for FY24. He highlighted corporate Synod’s current strong financial position, noting in particular:

An increase in unrestricted gifts and grants ($3M year-to-date, compared to $2M and $2.6M in the previous two years);

Unusually high unrestricted bequests, with total bequests projected to finish FY24 at $20M, up $10M from FY23; and

Spending that is under budget by about $9M.

Haak said he expects the year to finish in line with or ahead of the current operating surplus, with additional bequests expected, largely unrestricted. He emphasized that the management team and board will have to consider carefully how these “final gifts” can best serve the Synod into the future.

Haak then introduced the FY25 budget. He pointed out that while the operating budget proposal is significantly up (15%) compared to where FY24 will likely end at the present spending pace ($70M), it is up only 2% relative to the FY24 budget ($79M).

“We are well-positioned financially,” said Haak, “to fill out ministry positions and test engagement and responsiveness … so long as we remain prudent.”

Haak explained that the FY25 budget is down in most areas relative to the FY24 budget. However, the proposal includes new investments in the lcms.org digital platform — $516,000, plus $500k in the capital budget — along with accounting and related process and system upgrades ($400k) and five new positions in LCMS Mission Advancement (together with other Advancement activity investments, including travel and training, $750k). Other than these five positions, which were added because there are far more donors than current staff can manage, there are no new base personnel additions. The included operating expenditure contingency is also increased from $300k to $725k. Excluding these items, budget-to-budget change is a reduction of almost $0.5M.

Haak highlighted the most substantial changes in program and support expenses relative to the FY24 budget. LCMS Office of International Mission (OIM) and Office of National Mission (ONM) expenses will decrease 5.9% and 7.9%, respectively, while LCMS Communications will increase 28.2%, primarily due to the digital platform upgrade. Concordia University System (CUS) support will increase 42.9% to $1.8M, largely due to interest-driven increased CUS debt payments, a realization that adjustment to the reduced grant of the last year was not achievable by the CUS, and the new work assigned to the CUS by the convention. The legal budget will increase 49.8% due to currently increased activity, and “Commissions, Task Forces, Etc.” will increase $109k, a 104% increase, principally for the curriculum standards task force initiated by the 2023 convention. On the support side, Finance/Accounting/Audit/Etc. is increasing 20.7% to $2.7M.

Haak noted a continued emphasis, with regard to program spending, on winnowing the annual expense budget to include only items that are realistically achievable, given availability of funds, rather than including many items unlikely all to be funded in total (i.e., by gifts restricted to individual specific projects) and implemented.

Reports

LCMS President Rev. Dr. Matthew C. Harrison, First Vice-President Rev. Peter K. Lange and Chief Mission Officer Rev. Kevin D. Robson briefly extended their written reports to the board.

Harrison said that he has “never felt so engaged in and proud” of what the Synod is doing. “We are hitting our stride” in international mission, in relationships with our seminaries, and in the ONM, Harrison said, where ONM Executive Director Daniel Galchutt “gets it done.” He noted his confidence that the Synod’s strong financial situation is going to be sustained and improved into the future. There remain challenges, but “considering where the world is, we are remarkably blessed as a Synod.”

Lange shared that work on district visits is ramping up. He reviewed the structure and content of these visitations. Harrison noted the great value of relationships built through visitation.

Robson highlighted several of the areas under his supervision, particularly noting work underway by the OIM and ONM and their respective mission boards to carry out assignments from the 2023 convention.

CUS Chairman Rev. Mark Braden reported on his board and gave a brief overview of each CUS university and of work related to 2023 Resolution 7-04B, which triggered a revision of all CUS governing documents. He noted the retirement of CUS President Rev. Dr. Dean Wenthe and the impending appointment of a new CUS president which, with the acceptance of a call by the Rev. Dr. Jamison Hardy, has now been finalized. Plans are underway to recognize Wenthe’s service. Finally, Braden noted a redesign currently in process for the CUS logo, letterhead and website. He concluded his remarks by giving “all thanks and glory to our Lord Jesus Christ for the grace He has shown us and the CUS.”

Other business

Finally, the board heard reports from the Audit, Governance and Personnel committees; listened to an update from Concordia Plan Services CEO James Sanft and Vice-President/Chief Product Officer Kevin Herweck; and approved several other action items, including board appointments to Synod entities, authorizations for Lutheran Church Extension Fund loans, and a contingency plan for interim leadership for corporate Synod in the event of an unexpected vacancy.

Posted July 1, 2024