Single Global Agency explains $66* Million dollar increase in Excess Funds for 1997 to over $400 Million
Interpretation of General Board of Global Ministries Assets
The report of General Treasurer Stephen F. Brimigion to the Board of Directors at the Spring Meeting of the General Board of Global Ministries included information that clarifies the financial status of the agency and corrects misinformation that may have been distributed. Following are excerpts from the General Treasurer's remarks:
Net Assets of the General Board of Global Ministries
The mission agency ended 1997 with net assets of $402,047,203, an impressive number that represents the generous giving of United Methodists over the past century. What is important is the manner in which these assets must be classified, and the availability of those funds for mission.
The classifications for the assets must be consistent with rules implemented in 1995 by the Financial Accounting Standards Board (FASB).
Permanently Restricted Funds
The first FASB classification is Permanently Restricted Funds, or what we historically have called endowments.
Permanently Restricted Funds represent $103,140,492 of the Board's assets.
The category includes, among other funds, endowments and trusts by gifts and by bequests to mission from more than 1,700 individuals over the history of the United Methodist Denomination. All of these funds are restricted by law and must be maintained in perpetuity and the income is to be used exactly as specified by the donor. The proceeds are used to support some of the finest ministries in the world. For example, GBGM holds $5,266,000 in what are called "China Funds". When the Board could not use these funds in mainland China they were held awaiting the reopening of China. Today, the interest earned is used to support China projects which are primarily education and evangelism programs. These are having an astounding impact in bringing Christianity back to China.
Temporarily Restricted Funds
The second net asset reporting category required by FASB is Temporarily Restricted Funds, which amount to $141,847,829.
This category includes giving programs familiar to United Methodists, such as Advance Special giving, which represents local church and individual giving over and above the World Service Apportionment. One hundred percent of the funds collected through the Advance are spent on the projects for which they are donated.
Also included in this category is Supplemental Giving by United Methodist Women.
The unusual item in this category is missionary and deaconesses pension funds, which are substantial at GBGM. These funds are either donor or pension contract-dedicated and cannot be used for any other purpose.
The final FASB reporting category is Unrestricted Funds, which amounts to $157,058,882.
Included in this category is Unrealized Capital Gains. The term "unrealized capital gains, which may be unfamiliar to some people, refers to capital appreciation on investments that has not been realized, (i.e., the stock is worth more than you paid for it and you haven't sold the stock yet so you haven't yet taken the gain in its value). FASB rules require this unrealized gains be treated as Income and included in Net Assets.
As of Dec. 31, 1997, $52,878,705 of the Board's net assets were in Unrealized Capital Gains.
In 1996-1997, the Board leadership recognized that the Board's investments had participated in the excellent investment markets and decided to realize up to $23,000,000 of the Unrealized Capital Gains to help the unfunded health benefit program of our missionaries and to create the Millennium Fund for Mission, a fund to rebuild damaged church infrastructure in Africa, Eastern Europe, and the inner cities of the United States. GBGM had not historically been able to finance these needs.
In 1997, monitoring of the investments continued and the Board committed an additional $25-million of Unrealized Capital Gains to several categories of ministry for 1998 and 1999. These ministries will extend the evangelistic reach of the church in new and exciting ways through a "Missioners of Hope" program for Africa, the "Bishop Handy Young Adult Missioners" program, and an "Innovative Mission Volunteers" program.
$34,503,436 of unrestricted funds are held by United Methodist Women and utilized to support ministries with women, children and youth. Of this total, $24,553,869 has been designated by policy or by the Women's Division for specific usage. This amount also includes the valuation of property owned by the Women's Division and funds for maintenance and repair. The Women's Division systematically utilizes its investment funds responding to new mission needs and programming for United Methodist Women.
$13,127,792 of the unrestricted funds are held by the United Methodist Committee on Relief (UMCOR). These funds are used to respond to emergencies around the world. When disaster strikes, UMCOR immediately starts spending substantial amounts of money to respond, even before any special church wide offering to support the relief work is taken. The hope is that the funds will be replaced. This fund also is used to fully support any Advance Special endorsed by UMCOR if the donations fall short.
That leaves $109,310,515 unrestricted funds available to the parent organization, GBGM. $73,084,514 of this amount has been designated by the GBGM Board of Directors for programs around the world. These programs, which usually are multiple-year, include items such as pastor salaries in the former Soviet Union, support for African ministries, and new congregations in Puerto Rico.
In the final analysis, approximately $35,000,000 is available for emergencies that frequently occur, such as when missionary personnel must be quickly moved out of a trouble spot, and for cash flow, which always is a substantial problem for GBGM because the majority of any general church agency's income is usually received in the final quarter of the year.
United Methodists through GBGM enable mission of the church in more than 130 countries supporting or partially supporting thousands of ministries where emergency situations can and do occur.
There is an urgency and enormity to the church's call to faithful partnership in God's mission, which is reflected in the manner in which the General Board of Global Ministries uses the funds donated by members of our local churches to witness to God's presence on Earth.
* The original reported increase was $150 million due to the fact that the Women's Division Net assets were not reported on the official report of net assets. The total net assest increase has been re-calculated from the GCFA report of Excess Funds which includes the Women's Division figures for 1996
Back to UCM Homepage