BOD adopts first-quarter budget for FY21

The Lutheran Church–Missouri Synod (LCMS) International Center in St. Louis, where meetings of the LCMS Board of Directors (BOD) are sometimes held. Due to COVID-19 guidelines, the most recent BOD meeting was held remotely, via video. (LCMS/Erik M. Lunsford)

By David Strand

For the first time — and perhaps not the last — the Synod’s Board of Directors (BOD) held a regularly scheduled quarterly meeting “virtually,” a term so familiar in recent weeks it hardly needs quotation marks.

Speaking to 19 other faces (Board members, officers and staff) on his Zoom meeting screen, BOD Chairman Rev. Dr. Michael L. Kumm welcomed the group, laid down ground rules to help the meeting go smoothly, and asked Synod First Vice-President Rev. Peter K. Lange to open with prayer.

COVID-19 challenges

The reason for the unusual setting, of course, was COVID-19, which also figured largely in the Board’s main business of the day: reviewing and approving the Synod’s budget through the first quarter of FY21.

Normally the Board, at its May meeting, would set the Synod’s budget for the entire upcoming fiscal year, which starts on July 1. Owing to near-term COVID-related challenges, most notably the preparation of a reliable assessment of revenue impact, the Board in April had endorsed a proposal from the Operations Team — Chief Administrative Officer (CAO) and Acting Chief Financial Officer (CFO) Frank Simek and Chief Mission Officer (CMO) Rev. Kevin D. Robson — to issue disciplined spending-control guidance to their respective units, and to prepare corresponding spending forecasts through the end of the current fiscal year and abbreviated budget proposals for just the first quarter of the next.

This the units did and, after a detailed presentation compiled by Simek and Robson — an outlook based on such factors as revised spending plans, projected cash-flow sensitivities and various “best-to-worst-case scenarios” — the Board approved a “continuing budget resolution” covering the period through Sept. 30. It will adopt the budget for the balance of FY21 at its August meeting, in preparation for which each of the Synod’s unit executives will present a revised strategic and operational plan to aid the Board in understanding and considering their budget requests within the context of near- and long-term disruptions emerging from the COVID crisis.

“We need to come up with millions of dollars in proposed expenditure reductions,” said Simek, “because even the best-case scenario, based on anticipated downward pressure on offerings flowing from congregations through the districts and on to the national Synod, will call for significant spending rollbacks.” Guidance already issued by the Operations Team included freezes on hiring and salaries; bare-bones capital expenditures; and major cutbacks, deferrals or eliminations of travel, event hosting, new initiatives, and partner grants in both domestic and global operations.

“We can’t ‘efficiency-increase’ our way out of this,” said Robson.

The CMO continued: “This is a time that calls for inspiring, prudent leadership, and the Board of Directors, acting on sound recommendations, is strategically tightening operations while maintaining the mission and ministries of the church in pursuit of the Synod’s constitutional and convention-mandated objectives and priorities.

“With these extraordinary interim measures,” he said, “under a principled austerity made necessary by COVID, the Board has adopted a well-thought-out, near-term budget through the first quarter of the next fiscal year. God is always good; disruptions of this magnitude present unique moments of opportunity not to retreat but to grow stronger. The Synod is thoroughly and methodically examining every available option to deal creatively with looming probabilities unlike anything seen in LCMS history.”

Good news

While big changes in Synod operations may be on the horizon, critical programs proceed with immediate positive impact. As of May 22, the ongoing “Soldiers of the Cross—Amplified” effort, in partnership with Lutheran Church Extension Fund (LCEF) and administered through the districts, had awarded 310 grants totaling $455,752, offering benevolent relief to LCMS church workers (ordained, commissioned and lay) in financial crises around the country, thus far just “scratching the surface” of anticipated total grant applications. In support of this effort, LCMS and LCEF donors already have provided more than $2.7 million (with much more to come) to relieve church workers of immediate burdens in order that grant recipients may focus on their God-given vocations. (Click here for the most up-to-date information about the Soldiers of the Cross—Amplified process.)

“This is the church, under God’s blessing, at its best,” said Synod President Rev. Dr. Matthew C. Harrison. “Here we are, going through a very hard time, and yet our wonderful people, many of whom are suffering themselves, are stepping up to help their beloved church workers in need.”

Speaking of “wonderful people,” amazingly, in a testament to the organizational structure and resiliency of the LCMS Office of International Mission, over 90 percent of the Synod’s 100-plus missionaries and their family households opted to stay on their foreign fields and continue serving as best they could amid the pandemic.

Current finances

In their financial report (this apart from the budgeting business, though certainly having a bearing on it), Simek and Executive Director of LCMS Accounting Ross Stroh reported on revenues versus expenses, actual and budget-relative, through the third quarter of FY20. As of March 31, although revenues year-to-date were down significantly versus budget, judicious underspending had more than offset the loss, for a positive revenue-to-expense variance, relative to the budget, of $63,000. Correcting for the non-uniformity of revenue and expense through the year, however, this may portend a year-end deficit for the Synod of at least $1 million.

As for the Synod’s cash position, “fluctuating daily receipts make trend analysis difficult,” said Simek, “but looking at a five-day moving average, we’ve had about a $100,000 decrease in average daily cash receipts since April 1.” Days of cash-on-hand, as of that same date, stood at 89.

Highlights of committee reports

Personnel: Committee recommendations to fill appointments on the boards of directors of Concordia Plan Services (CPS), the Lutheran Center for Religious Liberty, and the China Evangelical Lutheran Church—Limited Corporation were adopted, as were recommendations to fill members-at-large seats at LCEF.

An opinion by the Commission on Constitutional Matters frees the BOD to designate Board representatives other than the CFO at various other board meetings. (It had been agreed that the CFO is expected to participate in too many such meetings.) The committee will formulate a plan for doing this by the BOD’s August meeting.

Owing to “the throes of coronavirus,” the Board is pausing in its search and hiring process for a new CFO, according to Chairman Kumm.

Governance: To comply with resolutions adopted by the 2019 Synod convention, “significant modifications” will be made to Board policies on how Recognized Service Organizations are selected and approved. This is a “work in progress,” and the committee will bring its ideas to “streamline and simplify” to the Board’s next meeting.

Audit: The committee relayed an update from CPS on its retirement and other benefit plans, and then gave a status report on several Concordia University System (CUS) schools, based on a meeting with CUS leaders.

To accommodate the circumstances and timetable of the meeting, reports normally heard — such as those from Harrison and Robson — were instead placed in the consent agenda, which was adopted at the outset of the session.

Concerning future BOD meetings, in a cost-saving move, the Board adopted a resolution put forward by Kumm to begin holding two of its four annual regular meetings electronically. More than that, the resolution “encourage[s] the other boards, commissions, committees, and councils of Synod and its agencies to maximize use of electronic meetings, to meet in person only where required by a sound business case, and to intentionally evaluate, in light of new opportunities, and discern a manner and schedule of meetings that ‘best enhance its ability to accomplish its mission’ within a rigorous stewardship of donated resources.”

Prayer

Likely all would agree the most uplifting words at the meeting came in the aforementioned prayer of First Vice-President Lange, who based his petitions on John 14:1–14. Parts of his prayer are excerpted here:

“Dear Risen Savior … Today the hearts of all of us are troubled by many things, including this coronavirus crisis that grips our world, together with the resulting serious financial challenges facing most individuals and institutions, including our beloved Lutheran Church—Missouri Synod.

“Yet You promised us, ‘Whatever you ask in my name, this I will do.’

“So, we are bold today to ask, in Your name, for the speedy removal of this pestilence from our land and world. In whatever ways You provide — be it miracles, or medicine, or whatever — restore our nation and world soon!

“So, also, with this financial crisis, we implore You to direct the markets, and commerce, and all that is needed, to restore our economy speedily. According to Your will, allow our Synod offices, districts, agencies, congregations and schools to have the resources to move forward boldly with the work You have given us to do. And if our hoped-for financial recovery is not as quick as we’d like, teach us important and lasting lessons from this that we may be the best stewards possible of whatever You entrust to us.

“Finally, Lord, when this terrible season ends at last, leave us with a stronger faith that we may evermore firmly ‘believe in God’ and ‘believe also in You.’ ”

Posted May 29, 2020