Methodists give NCC loan not gift for bailout fund
By John H. Adams, The Layman Online, November 20, 2000
Instead of approving a bailout gift, the United Methodist Church has decided to lend the National Council of Churches $400,000 with strings attached.
The money is an advance on Methodist commitments in the future, and the NCC will be required to pay it back at an interest rate of 7 percent annually. If the NCC remits the full amount of the principle plus interest and “demonstrates positive net assets and a balanced operating budget,” the interest will be rebated in full.
That arrangement was approved Nov. 18 in Albuquerque, N.M., by the United Methodists’ General Council on Finance and Administration.
Loan is for debt-reduction
The $400,000 is earmarked for debt-reduction that is necessary before the NCC can balance and close its 1999 books. That year the NCC spent $6 million more than its revenue. The NCC used $4 million in reserves to cover most of the debt and asked member communions to contribute $2 million. With sharp cutbacks, the NCC says it reduced spending enough to provide an unaudited balanced budget for 2000.
Last year, leaders of the United Methodist Church pledged $700,000 toward the bailout, but, prior to the action on Nov. 18, the 2000 Methodist debt-reduction contribution was only $82,000.
Now, having secured $482,000 from the United Methodist Church, the NCC still needs an additional $218,000 from the Methodists that is being considered by the General Commission on Christian Unity and Interreligious Affairs. Claire Chapman, executive director of the commission, attended the meeting in Albuquerque but was not available for comment Tuesday (Nov. 20).
NCC needs additional $218,000
The National Council of Churches has already included the full $700,000 in the 1999 financial statement, which, if it all materializes, will leave a balance of $100,000 to start the 2001 budget, according to NCC budget estimates. Without the additional $218,000, the NCC will begin 2001 more than $100,000 in the hole without a shortfall cushion.
Furthermore, even NCC budget-makers say the first six months of 2001 will be precarious. The budget projection of $3.5 million for January through June 2001 includes $1,050,000 in money that is not guaranteed – $800,000 in ecumenical commitment funds from member denominations and $250,000 in new grants that have not been approved.
Philip Young, the NCC’s treasurer and one of the key people involved in implementing cost-cutting measures, has urged all the member communions to make payments to the NCC’s ecumenical commitment fund and to do so early in the year to avoid another budget crisis.
Income target may be unrealistic
But Young, an executive at the Presbyterian Foundation, has acknowledged that the $800,000 goal may be unrealistic. “Never, never” has the NCC raised $800,000 in ecumenical commitment funds during the first six months of a year, he said.
In fact, contributions to the ecumenical commitment fund have declined during 2000. Only 18 of the 36 communions have made any contribution to the ecumenical fund.
To date, the Presbyterian Church (USA) has been the most generous denomination in trying to help the NCC clean up its books after years of financial misspending and poor accountability. The PCUSA gift was $500,000 – $400,000 approved by the General Assembly Council and $100,000 by the Office of the General Assembly.