IMB sailing through an ocean of red ink

I knew things were tight at our International Mission Board. I didn't know that the extent of the financial shortfalls.

The Board puts out their plan to balance the budget here.

The Board has a helpful series of FAQs, here.

A bit of optimism is in order. We will soldier through this as a convention. Things are tight and things are tough but the one SBC entity that cannot fail is our venerable flagship IMB. We could lose a couple of seminaries and not miss a beat in theological education. NAMB has lurched through several crises the past decade or so but slogged on before straightening things out. State conventions have dealt with severe reductions in revenues the past seven years or so, have cut jobs and programs but have survived without churches noticing a lot of difference.

There is no entity that can do what IMB does. Churches cannot come close to matching the overall strategy and levels of support for overseas work. Independent organizations do not have the resources to do what the SBC does nor would they act in accord with what Southern Baptists believe is necessary and proper in reaching the world for Christ.

Our IMB has to succeed. The Cooperative Program will provide almost $100 million for the IMB and the Lottie Moon Christmas Offering for International Missions will fund at a level of around $150 million annually. These are not insignificant nor are they expected to disappear. The trajectories for these two major funding streams are slightly declining in regard to the CP and flat or possibly slightly increasing in regard to the LMCO. In my book a quarter billion dollars is a huge sum. Let's be thankful for that as we adjust for the future.

Absent a significant new source of revenue the IMB will have to adjust to a reality of fewer traditional, fully-funded, overseas personnel; hence, the plan to balance the budget and prepare for the future.

A few observations:

1. The previous IMB financial plan is a failure, a statement of the obvious. The press releases admitted as much. It was overly optimistic to expect to cover tens of millions in budget shortfalls by cannibalizing and selling assets overseas and by using reserves.

2. I recognize that the Board has been through the retirement of a long time leader, a short term caretaker leader, and the global recession and recovery. The severe shortfalls probably should have been addressed more seriously earlier but hindsight is a great thing. We need all our energy for the future.

3. The reduction from a high of 5,600 missionaries to the goal of a sustainable number of 4,200 is severe and depressing but reality isn't always pleasant. We do what we can and must. Thank God for the ability to put 4,200 in places where the Gospel is needed and where we can provide a permanent and secure presence.

4. The Board indicates an intent to appoint 300 new personnel annually and I trust the leadership to decide what this number should be. It would be foolhardy to close off new appointments completely and allow resignations and retirements to reduce the number to the proper level. Shut off new appointments for a several year period and the stream of new personnel would dry up.

5. The offer of incentives to motivate retirements is the proper route. Whether or not it will work is not known. I can see some unpleasantness down the road in this regard. Since 80% of the Board's expenses are for personnel, Sutton's Law applies. There's no other way to get to stability than to cut personnel.

6. The Board self-insures and provides benefits for retirees. One might see increasing burdens in this. It may be that with the changes in national health insurance policies and options that the Board will be pushed towards providing retirees an allowance to obtain their own health care.

7. It is not unreasonable to conclude that the Board could have and should have spent more time communicating with Southern Baptists on the depth and extent of the financial problems. I'm seeing longtime SBC insiders express surprise at the severity of the IMB financial crisis.

8. The Great Commission Resurgence had a marginally positive impact on IMB revenues. Those who now say the GCR movement of state conventions keeping less of a CP dollar and sending more is a failure just don't understand the math involved. Moving state conventions from 63% to 50% (if they ever get there and I don't think they will) is a good thing but would not come close to generating enough additional revenue for the IMB to cover their deficits.

David Platt has a tough job. The money part is easy: you take actions that must be taken to balance the budget, accumulate reasonable contingency reserves, and secure the future of the work. The hard job is in keeping IMB personnel away from debilitating anxiety and focused on their tasks and in keeping Southern Baptists informed.

I'd say to Platt, the IMB trustees, and all IMB people: It is imperative that you succeed. I want you to succeed in the tasks assigned. You have my prayers and support.

Feet to the fire: Plodder's 2011 Predictions

Last December, I made some predictions for 2011: Plodders predictions, er, conjectures for 2011

I am hereby holding myself accountable for the rash things I offered then. Here's a look at them one year later.

1. International Mission Board. I predicted that trustees would settle on "a known SBC figure rather than an obscure missions-driven person" to be CEO. I further specified that the individual "will either be a megachurch pastor or have strong mega connections."

I was right by a circuituous route, it turns out. Tom Elliff is a former mega pastor.
I also predicted that there would be continued funding shortfalls. Lottie Moon was down over $3m for 2010.

Plodder hits prediction paydirt on this one (though I wish I had been wrong on the LMCO).

2. North American Mission Board. I predicted that the new CEO would "make some major policy changes, including direct funding to some megachurches." I rate myself as half-right on this, the former true, the latter not true, yet.

I predicted that "the Annie Armstrong offering will yet again fall far short of the goal." Although the totals haven't been released, the goal will almost certainly not be met. I said that "declining Cooperative Program giving will force more staffing cuts." NAMB has stopped funding some positions, mainly as part of the shift in the kickback funds to state conventions.

I give myself a "half-right" on these.

3. Cooperative Program. I predicted that "the decades long decline in the percentage of church offering plate dollars devoted to the CP will continue." Well, the stats aren't in on that. The CP did show the tiniest increase for the fiscal year ending in September which, coupled with an overall decline in church revenues, may actually show an increase in CP church percentages.

I am still not optimistic that the percentage has hit its floor yet.

I rate my prediction "Undetermined."

4. Great Commission Resurgence Recommendations. I predicted that "Even though a number of state conventions declared they would move towards a 50/50 state/national CP split, little movement in this direction will actually occur."

Some state conventions made what I would term major moves in this direction. The South Carolina Baptist Convention made substantial and significant cuts to in-state stuff and even budgeted to send funds directly to the IMB, bypassing the Executive Committee. Overall, state conventions are still in the mode of making declarations. The checks haven’t been written.

I give myself a "undetermined" on this one.

5. Assorted odd stuff.

An SBC megachurch pastor will be involved in a major scandal. Nope. Not that I am aware of. Plodder strikes out on this one.

The Cooperative Baptist Fellowship will continue to eke out an existence but will not find their ‘revisioning’ sufficiently visionary to infuse new life into an organization that still has the identity of being the anti-SBC. I’ll renew this one for 2012. They’re still working on it.

The Southern Baptists of Texas convention will surpass the Baptist General Convention of Texas in revenues. Nope. Didn’t happen. The BGCT has stabilized somewhat and in 11 months has received more than the SBTC’s entire budget. It will happen one day but I'm Texas toast on this one.

GuideStone, recognizing that their health insurance product is struggling, that their pool of insured is older and sicker, and that they will soon to be priced out of the market, will make changes to keep it from total collapse. Premiums will nonetheless go up. Yep. Premiums up. Benefits cut. Same old story.

Frank Page will prove to be less hands-on with Baptist Press than his predecessor, even though he made BP part of his PR office. I don’t know about this prediction although BP has noticeably avoided certain stories.

OK, so I picked the low hanging fruit from last year's predictions. Next week I'll promise to go out on a limb with predictions for 2012.

Our sacred tax loophole, the housing allowance, survives once again

Suit against housing allowance dismissed


We ordained clergy like our tax break, the minister's housing allowance, because it makes us feel so special, that, along with not paying some of our taxes. The housing allowance permits us to exclude some of our income from income tax. GuideStone explains it here.

The minister’s housing allow­ance is among the most important tax benefits available to ministers. Section 107 of the Internal Revenue Code allows “ministers of the gospel” to exclude some or all of their ministerial income—as designated by their church or church-related employer—as a housing allowance from income for federal income tax purposes.

Not only that but when we take the housing allowance on a house we are buying and for which we have a mortgage, we get a double tax break by (1) being able to exclude income spent on housing (mortgage, repairs, furnishings, taxes, insurance etc) from W-2 wages, and (2) use interest expenses a second time if we itemize deductions. I know of no legitimate justification for this tax break, but then who said tax policy in this country had to be legitimate, sensible, or fair?

What a great country anyway!

Lest we become too proud the gummit insists that we pay Self Employment taxes on the amount of the housing allowance. Truth is, most SBC clergy pay far more in SECA taxes that income taxes.

Of all the issues raging in the SBC these days - Mohler on homosexuality, Great Commission Resurgence stuff, changes at NAMB, the runup to the 2012 election - what really counts for the bank accounts of SBC pastors and clergy might get lost.

Plodder is happy to keep the brethren/sistren informed.