wfn.org | LWF Council 04-2005 LWF Closed 2004 with Balanced Geneva

["Frank Imhoff" <Frank.Imhoff@elca.org>]

LWF Closed 2004 with Balanced Geneva Coordination Budget 
LWF Treasurer Stoll: Gains from High Exchange Rates

LWF Council Meeting in Jerusalem/Bethlehem, 
31 August * 6 September 2005

PRESS RELEASE N0. 04-2005

BETHLEHEM/JERUSALEM, 31 August 2005 (LWI) - The Lutheran World
Federation (LWF) closed 2004 with a balanced Geneva coordination budget,
LWF Treasurer Mr Peter Stoll told the LWF Council at its ongoing annual
meeting.

In the Treasurer's Report to the Council, Stoll emphasized that apart
from two exceptions, individual budgets of the departments as well as
the program and project budgets were also balanced. The Council takes
place August 31*September 6 at the International Center of Bethlehem,
hosted by the Evangelical Lutheran Church in Jordan and the Holy Land
(ELCJHL).

According to Stoll, the LWF's financial situation was tight only
twelve months ago, and "this is why we decided to seek ways to improve
our financial sustainability." He explained that the main reason for
last year's positive developments were the high exchange rate gains
obtained via the higher market value of the Euro against the US dollar.

Stoll said budget projections for the years 2005 and 2006 did not
indicate any deficits as yet. However, the Geneva coordination budget
still reveals a "structural deficit" after 2006 if exchange rate
gains are not taken into account.

USD 102 Million Total Income in 2004

Stoll reported that the total income of the LWF was USD 102 million in
2004, compared with USD 97 million in 2003. Of this amount, USD 14.59
million covered the Geneva coordination budget costs, which primarily
includes staff and operational costs. Some USD 87.4 million was
allocated to LWF projects and program activities.

The LWF's total expenditure in 2004 was USD 105 million compared with
USD 100 million the previous year. Of this amount, USD 14.16 million was
allocated to the Geneva coordination budget, whereas USD 90.28 million
covered costs of LWF projects and programs. The General Secretariat's
total expenditure stood at USD 3.9 million; Department for Theology and
Studies (DTS), USD 1.1 million; Department for Mission and Development
(DMD), USD 13.2 million; and USD 86.9 million for the Department for
World Service (DWS).

Although the Geneva coordination budget had a surplus of USD 427,610 at
the end of last year, projects totaling USD 589,833 had to be written
off, which led to a deficit of USD 162,232. The latter involved funds
that had to be used for programs and projects of the General
Secretariat, DMD, and DWS, and which could not be covered by the
so-called B-budget (Statement of Needs for programs and projects).

The General Reserves and other net assets freely available to the LWF
amounted to USD 10.7 million at the end of 2004, Stoll reported.

'Structural Deficit' Anticipated from 2007 Onwards

In contrast to 2004 and the expectation that budgets are balanced for
the years 2005 and 2006 as well, the LWF treasurer said he anticipates
that the "structural deficit in the Geneva coordination budget" will
reach CHF 800,000 * 900,000 per year as of 2007. At least from 2007
onwards, it will no longer be possible to count on high exchange rate
gains. 

He emphasized that "on the contrary, when the USD starts to
appreciate against the Euro, we will have great difficulties in avoiding
currency losses." Another reason for the forecast deficit is the lower
contributions from Germany, although these contributions remain far
above the fair membership level. Careful planning of work was needed to
ensure that the Geneva coordination budget could be balanced.

In order to increase income, Stoll suggested more focus on fair
membership fees and the Endowment Fund, besides trying to secure
earmarked money for projects and programs. The fair membership fee is
based on the number of members in each church and the wealth of a given
country. Some member churches pay the full amount of the fair membership
fee or even more despite the fact that they have some financial problems
themselves, the LWF treasurer noted.

If all member churches could pay the full fair membership fee, this
would bring additional income of around CHF 400,000 annually with the
current EUR/USD rates. "We have to ask those member churches that have
not been paying the full fair membership fee up to now to increase their
attempts to reach the goal of full membership fee," Stoll said.

LWF Endowment Fund Amounts to CHF 8.9 Million

Stoll further emphasized the significance of the Endowment Fund for the
financial future of the LWF, and reminded the member churches to take
part in the subgoal of reaching CHF 10 million. Right now the level of
pledges and capital are encouraging at CHF 8.9 million. 

The LWF Endowment Fund was set up in 1996 with the primary purpose to
provide financial support for the work of the LWF. Since 1999, the fund
is registered under Swiss law in the Canton of Geneva. The long-term
goal is eventually to reach CHF 50 million.

DWS Program in Jerusalem under Serious Threat

Focusing on the financial risks and uncertainties, Stoll expressed
concern for the situation of the Augusta Victoria Hospital (AVH) on the
Mount of Olives in East Jerusalem, especially in view of a court case
over an employer's tax levy for the health institution. Moreover, the
high level of program deficit, consequences of the construction of the
separation wall and the future of UNRWA patients (United Nations Relief
and Works Agency to help Palestinian refugees), are all big threats for
the Jerusalem program.

Furthermore, the LWF treasurer reported that the Strasbourg Institute
has realigned its research staff to meet with the level of income by
reducing the number of full time posts to more part time adjunct
professors. The budget projections for the next four years thus show
balanced budgets for the Institute.

Future Cooperation within the Lutheran Communion

In his report to the Council, Stoll also referred to the consultation
held at Chavannes-de-Bogis near Geneva in June 2005 on "The Future of
the LWF in the Context of Ecumenical Reconfiguration." 

During this meeting, which was attended by more than 40 representatives
from the LWF member churches, national committees, partner organizations
and LWF staff, participants agreed it was important to strive for
cooperation and synergy rather than competition with other actors.
Better program coordination and joint planning of agendas within the
ecumenical community was also called for. 

It was proposed at the consultation that the LWF "should be willing
to let go of all that hinders it from doing what the communion of
churches is uniquely called to be and do," Stoll added. (1,074 words)

*	*	*

There are around 170 participants in this year's Council meeting,
including representatives from the LWF member churches on the 49-member
governing body. Also attending are officials from LWF partner
organizations, invited guests, stewards, interpreters and translators,
and LWF staff. The Council is the annual governing body meeting between
Assemblies held every six years. The current Council was appointed at
the July 2003 Tenth Assembly in Winnipeg, Canada. It comprises the
President, Treasurer and 48 persons elected by the Assembly. Other
members include advisors, who are ordained and lay persons representing
the different LWF regions. 

During the Council Meeting, the LWF Office for Communication Services
can be reached at mobile telephone No. +972 52 378 1673 

*	*	*

(The LWF is a global communion of Christian churches in the Lutheran
tradition. Founded in 1947 in Lund, Sweden, the LWF currently has 138
member churches in 77 countries all over the world, with a total
membership of nearly 66 million. The LWF acts on behalf of its member
churches in areas of common interest such as ecumenical and inter-faith
relations, theology, humanitarian assistance, human rights,
communication, and the various aspects of mission and development work.
Its secretariat is located in Geneva, Switzerland.)

[Lutheran World Information (LWI) is the LWF's information service.
Unless specifically noted, material presented does not represent
positions or opinions of the LWF or of its various units. Where the
dateline of an article contains the notation (LWI), the material may be
freely reproduced with acknowledgment.]

*	*	*

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