Monday, June 28, 2010

Jesus First: Artifice Up Close?

You can decide for yourself if Jesus First implies that Rev. Matt Harrison is a liar in their glitzy “Special Edition” Delegate Letter #9. Or just skip it and read the response of the LCMS Board for Human Care Vice Chair John Edson, who nicely clears up Jesus First’s befuddlement. Mr. Edson's response can be found on the LCMS website:

The Truth about the Stewardship of
LCMS World Relief and Human Care
For the sake of our work of mercy and those in need around the world, and to provide reassurance to our donors, it is necessary to respond to the Jesus First Delegate Letter No. 9. As chairman of the Board for Human Care, I have requested our board Vice Chair, John Edson (a Certified Public Accountant), to prepare a response.
Rev. Bernie Seter
Chair, Board for Human Care
It’s amazing how easy it is to confuse matters with numbers. But that is exactly what has happened with Jesus First Delegate Letter No. 9. The author’s lack of understanding has led to all kinds of erroneous assumptions and conclusions that have called into question the integrity of the Board for Human Care, threatened to cast doubt in the minds of our donors, and potentially impeded the Lord’s work to show mercy to those who are suffering and in need of His help the most.

But it gets worse. In Jesus First Delegate Letter No. 9, the numbers have actually been twisted and turned in such a way that they no longer tell the truth. We will give them the benefit of the doubt that their raw numbers are correct, but their understanding and therefore their interpretation of the numbers is in error. I will make a promise to the author of that article: I won’t try to preach if he doesn’t try to do accounting!

Now the truth! The following information was provided to all World Relief and Human Care Board Members at regular board meetings. This information is available to anyone who asks. All the information is from financial statements prepared by the Synod’s accounting department.

Over the past 8 years (2003 through 2010), WR-HC has been responsible for expenditures totaling $108,458,610 (through May 2010). Of this, $14,200,077 has been given to support ministry areas within the Synod, and $67,164,394 has been granted to others. This total of $81,364,471 has funded the programs and mission of WR-HC. During this same 8-year period, administrative, fundraising, and communications costs have totaled $27,094,140.

In each of WR-HC’s monthly financial statements prepared by the Synod’s accounting department, a comparison is made to the benchmarks established by the Charities Review Council and the Better Business Bureau. Each of these agencies has established a maximum benchmark as to the amount of administrative, fundraising, and communications costs that a good charitable organization should maintain. The Charities Review Council benchmark is 30% of total expenditures, and the Better Business Bureau is 35% of total expenditures. The 8 -year history for WR-HC is 24.9% for overhead expenditures. 75% of donor dollars go to the mission and programs of WR-HC. To our knowledge, WR-HC is the only department in Synod that compares itself to these nationally established benchmarks.

Looking at the same 8-year period, the administrative, fundraising, and communications costs have ranged from 35.9% (2004) down to 13.2% (2006)—all within tolerable range of the benchmarks. At the same time, WR-HC has always maintained a positive fund balance (i.e., cash in the bank) which has helped the Synod as a whole cover cash flow shortfalls in other areas. In essence, the Synod has borrowed funds from WR-HC on an interest-free basis. This has been a great blessing to Synod, Inc., but is also a significant cost borne by LCMS WR-HC.

Jesus First would also have you believe that Lutheran World Relief (LWR) is a better-managed organization because their ratios appear to be better than WR-HC. But this is comparing apples to oranges. LWR includes “gifts in kind” (e.g., quilts and other material goods, etc.) in their revenues, representing approximately 30% of their total income. The Synod financial statements for WR-HC do not account for gifts in kind. That’s okay because when you do the right calculations based on the proper use of financial information, WR-HC meets the benchmarks even without accounting for material goods donated to us. Lutheran World Relief is a great organization, but WR-HC is not the same—neither with respect to mission nor to funding—and therefore any comparison should only be made with a complete picture in mind.

Let’s look at some other financial matters that have occurred during this same time period. WR-HC was the recipient of funding from the unrestricted funds of Synod, but during this time period those funds have gone from $800,000 in 2001 to zero in 2006. Thus, WR-HC is currently responsible for raising all of its own funds through its own staff with the assistance of the LCMS Foundation. During this same period, WR-HC also took on two major programs of the Synod—Veterans of the Cross, and Life Ministries. The Synod was struggling to fund Veterans of the Cross. In short, WR-HC costs corporate Synod nothing! In fact, WR-HC provides substantial funding to the Synod to pay for overhead costs for the International Center and support services. WR-HC pays its own way—and more!

Another transition has also taken place during this 8-year period. WR-HC has gone from an organization that was almost exclusively a grant-making organization to one that not only makes grants and supports human care projects, but also has its own internal capacity to meet human care needs. The internal capacities of WR-HC that have been built up over the past 10 years include district and congregational services, social ministries, pastoral counseling and clinical care, life ministries, health ministries, deaconess and intern programs, Medical Mercy Teams, and disaster relief both internationally and domestically. (See the recent publication, Decade of Mercy.) These programs would simply not exist if WR-HC had not made the transition to greater capacity.

WR-HC has taken the lead in maintaining integrity in relationships in the Lutheran crossroads. WR-HC is the primary interface with Lutheran World Relief, Lutheran Immigration and Refugee Services, Lutheran Services of America, and many other inter-Lutheran agencies. Over the past 10 years, WR-HC has provided a total of $27,392,251 to these organizations.

WR-HC is not a bureaucracy built to administer grants, as Jesus First would imply. It is a group of unbelievably dedicated people bound together in the name of Jesus Christ to address human need. Jesus First implies that this is an inept organization wasting donor dollars. They would have it disassembled under the restructuring plan which will, we believe, seriously cripple the future work of human care in our Synod.

The truth is that WR-HC is one of the truly bright spots of the Synod today, effectively carrying out its ministry and meeting its fiscal responsibilities at the same time. WR-HC is looked at as an example of a truly Gospel-driven outreach, and with good cause.

John W. Edson, CPA/ABV, CVA, CMA, CFF

1 comment:

Anonymous said...

Jesus First, more accurately, "PoliticsFirst" is simply a PAC for President Kieschnick. Rev. Coyne and Rev. Jim Rogers are their hatchet men, as evidenced by Coyne's consistent smear tactics and by Jim Rogers' "scarlet letter" tactic at the 2007 convention. One of their leaders openly campaigned to be his circuit's delegate to this year's convention. He is also the circuit counselor! They are politcs-centered, politics-driven, and politics-oriented. I have it on good authority that WR-HC has been investigated/audited twice in the last two years, and has been found to be "clean." PoliticsFirst ought to be ashamed of themselves.