Sagging global stock markets have caught churches and organizations in a double bind, forcing investment income reduction and rendering donors reluctant to give, and leading to cuts in social programs.
Tapping into reserves is commonplace for churches. Some have done this for years as routine, but financial advisers point out that selling investments during a slump means losses are crystallized and assets may be surrendered at less than their purchase price.
For the Church Commissioners, the main funding body of the English Church, the effect of the stock market slump has been alleviated by their relatively large holdings in property - 28 percent in 2001. Assets shrunk by 5.7 percent in 2001 compared to a loss of 8.9 percent recorded by a national "benchmark" of comparative returns. "In the past the commissioners were criticized for the size of their property holdings, but now it looks decidedly better," said Lou Henderson, a spokesperson for the commissioners.
With investments and reserves worth 4 billion pounds at the end of 2001, the commissioners are responsible for stipends of bishops and deans, some clergy pensions and support for parish ministry.
The same financial problems are seen throughout the world. The World Council of Churches is projecting a deficit for 2002 of CHF (Swiss francs) 7.5 million ($5.2 million) - CHF 1.8 million worse than expected, partly due to reductions in contributions, the WCC said.
At the Geneva headquarters of the world's largest church grouping, which has about 180 employees, staff fear drastic retrenchments in jobs and programs following a task group review whose findings are being considered at an officers' meeting on November 14-15. The WCC also has contingency plans to take out a mortgage on its headquarters building, but officers have been instructed to try to avoid using this source of credit "by all means possible."
By Albert H. Lee