Important Financial Update

Thursday, January 26 2012 12:52

I want to update the congregation on this year’s Annual Fund Drive and also to share with you a broader picture of the church’s financial health and our path toward a robust financial sustainability.

Financial support for the church continues strong this year. Pledges are now approaching the level of last year, when we achieved a stunning 17% increase over the prior year. This year we’ve been able to pay off some long standing obligations and begin making investments in our future.

I want to thank the more than 950 individuals and families who have pledged so far this year and especially all the volunteers who delivered such a well executed fund drive.

Some of you were able to increase your pledges and that is greatly appreciated. Some had to reduce your gift to the church. In these times, we understand. Many of you held your pledge constant.

Taken all together, we haven’t quite reached last year’s level, and we had planned for an increase over last year. So we find ourselves more than 10% short of our goal.

I am going to ask you to dig just a bit deeper in a moment. That won’t surprise you. But, first, I want to tell you why coming close to our goal this year is so important.

We’ve been using the beautiful spaces in the Buchan Building for 6 years now. That building was a major achievement and an act of faith. We raised $7.3 million dollars to cover the cost of construction. That money came in as pledges over as many as 7 years. To cover the cost of the construction, the church took out a bank loan, secured by those pledges.

The funds raised covered all construction costs but not the carrying charges (the interest) on that loan or some non-construction costs involved. In addition, the recession has forced some families to reduce their payments.

The bank loan has a significant balloon payment due in April, next year (2013). The Board, with my recommendation, has decided to re-finance that outstanding balance. It will be about $1.5 million. One option was to try to raise that money in a capital campaign, but it is simply not a good time to come to you to ask for that amount of money, although we will ask those newer members who did not pledge to the capital campaign to contribute.

Here is where all of this impacts the Annual Fund Drive. Unlike the financing for the building to date, which has been paid out of those pledges, we will have to fund the payments for this re-financed loan from our operating budget. That will be in next year’s budget, but banks will require that we demonstrate the ability to carry the payments this year.

Looking even further out, the Northwest Academy, our weekday tenant in the Buchan Building, is planning to acquire its own property. Their lease ends in June of 2013. When they leave, we will certainly be able to find other tenants, but whether they will be at the same rental level ($100,000/year) is uncertain and there could well be a gap in our rental income.

Given what we know is in our financial future, you can see that a significant shortfall in the Fund Drive will force significant reductions in our spending. Not only must we live within our means, funding our programs only at the level of our income, but we also have to prepare ourselves for the financial challenges ahead.

We are asking you, if it is within your means, to increase your existing pledge or make a one time gift to the church this year.

To help bring us close to our goal, several families have offered to match the first $30,000 of our increased pledges, new pledges and gifts dollar for dollar. Every dollar that you increase your pledge is worth $2 to support the ministry of our church.

We will close the Annual Fund Drive on February 12 and we will celebrate our success. We need your commitment and your generosity to bring this home in the next two weeks.

I know this is a great deal of information, surprising to some, perhaps many of you. But both the Board and I felt that it was appropriate to err on the side of maximum transparency as we deal with our financial future.

I will be discussing these matters from the pulpit on Sunday and members of the Board of Trustees will be in Buchan Reception Room, B103, after both services to answer questions and to hear from you what other information might be helpful. They will be available the following Sunday as well.

First Church is healthy and vibrant. Our ministry in the community is thriving. We will get through these challenges as we do all of our ministry…together.

Thank you for your attention and your commitment.

Blessings,

Bill

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Last Updated on Tuesday, January 31 2012 18:41

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