Editor’s note: This article was written by Roger Simpson. Roger is a regular commenter at SBC Voices, a retired software engineer, and decades long Southern Baptist. His statistical analysis in this post is very much appreciated.
I. Introduction
The International Mission Board is again facing a shortfall in recurrent sources of funding. Recurrent revenue sources are received periodically such as a portion of Cooperative Program gifts from the churches forwarded to the IMB via the Executive Committee, Lottie Moon offering monies, and other gifts.
Many will remember the “hand raising opportunity” which was a program to induce personnel, both in the field and in Richmond, to leave the IMB. Now, in 2017, the IMB is implementing a second wave of staff reductions to reduce expenses. This time, the epicenter of the staff reductions is with the Information Technology group in Richmond.
In both cases, IMB management liquidated assets to be able to fund ongoing personnel expenses. But in both cases, the liquidation of assets, while giving temporarily relief, did not solve the underlying problem of inadequate revenues to meet salaries, pensions, benefits, and other personnel related expenses. As a result, Unrestricted Net Assets are significantly reduced without any permanent benefit to the stability of the organization.
II. First Use of Unrestricted Net Assets to meet Operating Expenses [2007 – 2011]
Unrestricted Net Assets were at an all time high at year end 2007. They stood at $256,036,000. By year end 2012 Unrestricted Net Assets were down to $91,078,000. At year end 2012, Unrestricted Net Assets were reduced to only 35% of the 2007 value. It became evident that the problem meeting the payroll, and associated personnel expenses, was going to have to be solved by increasing revenues or cutting manpower because raiding Unrestricted Net Assets, while possibly being a wise move during a temporary revenue dip, was no longer tenable. The decrease in revenues was not just a situation that was unique to 1 or 2 years; in fact it was recognized as longer term trend. As a result, management instituted the “hand waving opportunity”.
III. Second Use of Unrestricted Net Assets to meet Operating Expenses [2013 – 2015]
Unrestricted Net Assets recovered from a low point in 2011 to $118,987,000 at year-end 2013. Since 2013, Unrestricted Net Assets have been in decline. Liquidating assets is again being used by IMB management in an attempt to maintain staffing levels. As we now see for the second time, liquidating assets is not able to solve the revenue shortfall problem. So the IMB announced a “Phase II” headcount reduction in the first half of 2017. The cut back was centered on the Information Technology group in Richmond. From year end 2013 to year end 2015 Unrestricted Net Assets fell from $118,987,000 to $76,057,000.
IV. Unrestricted Net Assets, Temporarily Restricted Net Assets, and Permanently Restricted Net Assets
Total Net Assets are divided into several classes. These classes are (1) Unrestricted Net Assets, (2) Temporarily Restricted Net Assets, and (3) Permanently Restricted Net Assets. Temporarily Restricted Net Assets can be moved to the Unrestricted Net Asset account under a proviso specified in the notes to the Financial Statements for a given year. The most recent Financial Statements of the International Mission Board is for the year ending 2015. These Financial Statements appear starting on page 281 of the 2016 SBC Annual. Note 10, on page 291 of the 2016 SBC Annual, states “Net assets were released from donor restrictions by incurring expenses satisfying the restricted purposes . .” In Note 10 a total of $35,875,000 is declared as being moved from the category of Temporary Restricted Net Assets to Unrestricted Net Assets. This reassignment was broken down between years 2014 and 2015 as follows: Year 2014 = $18,552,000; year 2015 = $17,323,000. The net result of this transaction is that about $35.9 million of Temporarily Restricted Net Assets were released so they then became Unrestricted Net Assets.
V. Summary
IMB management should address its plans going forward on (a) The moving of Temporary Restricted Net Assets to Unrestricted Assets, and (b) Its plan to use Unrestricted Net Assets to cover annual operating expenses. Management should make the case that [1] continuing to “raid assets” provides more than just a temporary “band aid” solution to budget shortfalls, and [2] that any use of Unrestricted Net Assets does not draw down asset accounts to a level that is not consistent with prudent management of funds. Two real-world cases since 2007 demonstrate that asset draw downs — while delaying headcount reductions for a few years — have not fundamentally altered the trajectory of the financial stability of the organization.
VI. Questions relating to reducing personnel costs in the IMB
- Can the IMB reduce full time staffing proactively and move to a shared cost model where churches supply and finance personnel for selected projects?
- Can the IMB enlarge the scope of where it engages in work cooperatively, and more economically, in structures where it shares management of the given ministry in specified settings?
- Is it possible to navigate to a paradigm involving less labor cost without bringing about what Mark Terry has called “the ‘amateurization’ of missions”
This is fascinating.
I’m guessing these numbers aren’t adjusted for inflation to 2015 dollars? Not that it would help, but it would show just how much of a desparity in the “then and now.”
This is a real problem and the IMB’s failure to communicate the severity of the issue ultimately falls on the hands of Dr. Platt. While he may be a gifted communicator and preacher, his leadership ability and financial acumen ( and that of those he has hired—especially Sebastian Traeger) continue to be a question mark.
David Platt inherited the current mess. One can question the way he has dealt with the issue, and many have, but no one can suggest that he created the problem or failed to communicate the problem. In fact, most of us didn’t realize that there was a problem until David Platt took over and began dealing with it.
I don’t think that’s a fair assessment. First, these numbers are pre-drawdown. We don’t yet know what the results of that are. These numbers present an analysis of available information, which is valuable in its context. The danger is people jumping to unwarranted conclusions or not taking into account other data that may be relevant but isn’t presented here or available to us. Second, it has been communicated that the situation is serious. I don’t think that can objectively be called a “failure” to communicate. Maybe you think it should have been said differently or more emphatically. And there’s room to debate that – but that’s a matter of degree not failure.
The numbers come straight from the Balance Sheets for years 2013-2015 of the IMB as printed in the SBC Annuals. These numbers are not adjusted for inflation.
If there is sufficient interest I’ll augment my report by using Bureau of Labor Statistics inflation multipliers for each year relative to a baseline year of 2003 and restate the results. Then, for example, Unrestricted Net Assets for year-end 2015 rather than being $76,057,000 would be something lower.
The augmented report would have assets in terms of dollars in terms of spending power for year 2003. Year 2003 is the first year that I have included in my analysis since 2003 to the present includes those years where asset drawdowns have become significant.
The overall situation is that the 44,000 SBC churches are simply not supporting the IMB at a level that allows the IMB to maintain its head count at historic levels. As I write this, I am not able to assess the future. But I think the IMB must be proactive and advise the churches that if revenue levels increase / decrease at a certain rate over the next “n” years then the adjustments will be as follows: Such as — [A] we will cut back / expand certain job classes, [B] we will phase out operations / expand operations in xxx continent or region, [C] we will seek partnerships with churches and/or other groupings of Evangelicals so our contribution’s will be in areas where we have unique expertise that we can deliver on a financially sustainable basis.
One idea that I’ll toss out there is that of “outsourcing” such areas as training to others, such as the SBC seminaries, so that as soon as missionaries are on the payroll they are “on the field” — possibly working as junior partners or apprentices for a initial period of time.
Roger, isn’t it the case that the VRI and other reductions are going to significantly change the situation?
If I’m understanding you correctly, (and it’s possible that I’m not or only getting part of what you’re saying) the main point is that the assets sold are only a short-term answer and that the two options are dramatically reducing expenses or dramatically increasing income. The personnel drawdowns were aimed at accomplishing one of those goals – and we don’t have the indications yet (that I’m aware of) to see if it fully addressed that or only partially.
I’m going to be in prayer for the IMB. You guys are awesome, and you do amazing work.
A few thoughts:
1. First and foremost…the IMB & NAMB needs to step up their “ground game”. The vast majority of SBC churchgoers have absolutely now idea how the IMB/NAMB work. If you were to poll SBC attenders, I’m willing to bet that nearly 100% of them would be in favor of “giving to missions”, yet you would have a hard time getting 10-20% of them to correctly identify the name of the organization that runs those missions. It’s a branding issue and a communication issue.
2. SBC Disaster Relief has TONS of loyalty in West Virginia and Appalachia due their on-going help here cleaning up after the 2016 Flood. This would be a great opportunity to come to areas like this and say, “Hey, you know those great people who came to the rescue in your community? They’re part of NAMB/IMB projects….check out what else we’re doing!! [Play Video]” Again, you guys are heroes to people around here.
3. When the Bible talks about charity, it says, “Don’t the let right hand know what the left hand is doing.” In other words, doing charity as a way to brag on yourself or to be seen by others is wrong. However, it’s not wrong to brag up on others or to shine the light on others doing good works.
Bad — “Hey, look at me. Look at how wonderful I am. Give me money.”
Good — “Hey, look at Charlie. He’s involved in an IMB/NAMB program. He’s doing great things for the Lord. Your financial support will ensure that Charlie and others like him can do even more great things for the Lord.”
Bottom Line: Advertising isn’t wrong. Fundraising isn’t wrong. Taking credit for good deeds isn’t wrong….so long as all 3 of those things are done the right way & for the right reasons.
There is an untapped market of willing donors in the SBC who simply don’t know that you exist. Don’t hide the IMB/NAMB under a bushel.
I think the hemorrhaging was stopped by the personnel reductions. Your figures certainly?put the matter plainly.
Brent:
No one can predict the future. And, of course, this includes me. But one thing we see from the past is that from 2007 until year-end 2015 [which is the most recent year for which we now have audited financial reports] we saw Unrestricted Net Assets fall from $256 million to $76 million. But even though this is the case, as recently as in early 2017, the IMB was still cutting back on manpower. So the sum total of annual revenue plus raiding assets still was not able to keep headcount on an even keel.
It could be that revenues to the IMB have skyrocketed during 2016. We will know this when the financials are released in the 2017 SBC Annual.
What we need from IMB management is a statement that says, “Given the revenue stream that we have historically seen and can REALISTICALLY project, and given likely unit cost per person on the payroll going forward, this is our business plan for the next five years. We present four versions of this plan — which address different revenue scenarios. ”
It should be noted that IMB management was on record as selling off assets for years and no one, including me, paid any attention. But now with the second headcount reduction, which happened in early 2017, people are finally, and at long last, waking up.
One thing is certain. There won’t be a repeat in huge asset drawdowns any time soon. That is because you can only go to the well so many times for Unrestricted Assets before the well reaches a level to where you just can’t prudently reduce it any more.
I did my small part this year by giving $5000 for Global Missions at the church I attend. The “problem” was that some of this didn’t help the IMB because it was going to homegrown missions support. If you take what happened to a portion of the five grand I gave and replicate it across 44,000 churches then I think you are looking at one of the problems the IMB has in funding its operations. In business terms, “there is too much competition for funds for missions operations in the SBC”.
I think that the IMB is going to have to look for synergies with non-IMB mission efforts — such as those funded via Great Commission Giving channels.
Roger
Your post got me digging this afternoon. You mentioned that no one noticed. So I went looking at other entity financials.
I noticed two things specifically.
One has to do with what appears to be borrowing from endowments at Southwestern. There is a $19MM line item on the budget that is due to their investments. This has grown over the past few years and is now more than half the budget. Does this mean they are borrowing from some quasi endowments to cover operating over runs?
Second, the cash on hand at New Orleans. It’s by far the lowest of any of the seminaries. Under $1MM. Others have $8MM, $10MM, $12MM. Southwestern is low too, but near the New Orleans number. What does a very low cash on hand amount indicate? Anything?
Jeremy:
I have some graduate level accounting exposure from when I was working on my MBA but I am not an accountant and specifically I am not an expert at reading financials of non-profits.
About all I know is that for a non-profit balance sheet we have:
Assets = Liabilities + Net Assets
In layman’s terms “net assets” are “things you have” in terms various items of value — either financial instruments or physical items.
“Cash” is just one type of asset. For non-profits typical assets include items such as: investments, endowments, property and equipment, and receivables.
If you are only looking at the balance sheet, which by convention comes first in the financials, then for a non-profit I think the key thing to look at is NET ASSETS — specifically unrestricted net assets.
In addition to the BALANCE SHEET which has balances [duh], we have a Statement of Activities which shows flows. The Statement of Activities shows Income and Expense during a given period of time such as a year.
On the other hand, the balance sheet shows balances at a point at the end of your reporting period.
This stuff is accounting 101.
The big question now is because we see recurrent drawdowns on Unrestricted Net Assets I think we deserve to know what the management of the IMB sees going forward. How do they plan to use the levers of more drawdowns of Unreported Net Assets and/or head count reductions as a function of various income scenarios.
If the IMB hands out pink slips for a third time then I don’t think it should take anyone by surprise. We need what shareholders demand for “for profit” operations. Namely “guidance”.
Since no one can predict with certainty future IMB income the guidance needs address various possible income scenarios — say [A] income at current levels and [B] income off year to year by 20% and [C] income increase year to year by 20%.
If we have guidance and income drops by xx% and guidance warned us that there would likely be a headcount reduction of between xxx and yyy people then “investors” (i.e. all of us in the SBC) would have some way to assess the consequences of our refusal to adequately fund the organization.
I don’t think it helps to dredge up the past unless we are learning from it. Management did the best thing they could do given that no one could predict that income would be impaired significantly for many operating periods. But going forward we see what happens when contingency planning is not built in to current decision making.
Your examinations are interesting there, sport.
Seminary $$$ will be the next blow up
Sorry but I made a dumb typo on my post on May 18 @8:56pm.
Change the text:
“. . . plan to use the levers of more drawdowns of unreported … ”
to
” . . . plan to use the lever of more drawdowns of UNRESTRICTED . . . ”
Believe it or not I proofread stuff but even still I just don’t spot all dumb errors.
I need a personal secretary to keep me on track here.
Roger
Many more missionaries accepted the Voluntary Retirement Incentive than the IMB administrators expected. So, in 2016 the IMB experienced a significant reduction in personnel costs, about 1200 less missionaries and headquarters employees. Coupled with a good Lottie Moon offering in December 2015, the IMB’s financial situation improved in 2016. I do not know much better it is, but I do know the IMB plans to appoint more new missionaries in 2017. The IMB leaders told us missions professors that they mean to be careful in the future not to let the missionary force and income get out of balance as it did in the years you examined.
Mark:
Thanks for this great report. When the YE 2016 financials actually hit the street, I’ll take a look. Consistent with your report we should see Unrestricted Net Assets on the Balance Sheet going up compared to YE 2015. Also looking at the Statement of Activities we should see at the line item “Total Contributions – Unrestricted” something ‘significantly’ more than the $284,327,000 for YE 2015 . . . maybe something like $312,000,000 which would be a 10% increase.
Or maybe we will also see the Line Item “Total overseas programs and stateside supporting expenses” drop by 10 to 20% down to say around $260,000,000. I don’t know how much lag there is before you see a net reduction in personnel costs after the “hand raising activity” because in the short term there are probably one time expenses that are associated with the head count reduction. I’ll be looking at the notes to the FY 2016 financial statement in the 2017 annual once it is distributed.
As you see on page 282 of the 2016 Annual — which has the Statement of Activities sheet for FY 2015 — “Income” was $283,902,000 while “Expenses” were $310,447,000. For FY 2016 this backwards situation should turn around.
I don’t know this so I have to ask. When does the EC put up each year’s SBC Annual as a PDF. Is coincident with the annual meeting?
Yes, the IMB did incur significant one time expenses due to severance benefits. One can infer from their plan to increase new missionary appointments in 2017 that they expect a good balance sheet in 2017. Another factor is that new missionaries receive a lower salary than veteran missionaries. My wife and I received a $200 a month raise every 5 years. I don’t know about the timing of the EC report release.
Roger, first of all thanks for doing the digging to find the data to make this informative article.
A few observations:
1. The trend over spending was more than a one or two year blip. This is not to throw blame (enough of that discussion has taken place already), but instead to ask why this has occurred and specifically why overall giving (which I am assuming comes almost exclusively through Cooperative Program giving and from the Lottie Moon Christmas Offering) has not kept up with inflation or at least that which was required to support the overseas personnel and those employed in Richmond.
2. My own speculation is to why giving hasn’t kept up has to do with the nature of the connection that individual churches have with the overall Convention. I don’t want to get into the heated Baptist Identity question that has been discussed before. However, I will say that I see churches having less connection with the publications of the SBC and its agencies across the board. Specifically, when I was growing up, we never would have considered having Sunday School material that wasn’t from the Sunday School Board in Nashville. Now, many churches allow the Sunday School classes to have more latitude in the material studied and that is assuming they still have Sunday School classes on Sunday morning. The present trend I am seeing with all new churches (and even with some older ones) is to not have Sunday School, but small groups meeting in homes throughout the week. In those cases, almost none of them will have a Sunday School quarterly from Life Way. You may ask, what difference does this make? At least for me, as one who grew up with the quarterly, it provided a greater connection to the overall Convention.
3. Another trend, I have observed is that as the South has grown, many SBC churches have experienced growth from people from other denominational or Catholic backgrounds. In the effort to reach these populations, less emphasis has been placed on the agencies of the SBC. In fact, many of the larger churches don’t have Baptist in their names and there is not much emphasis on the connection to the SBC.
4. Whether the IMB realizes it or not, it lost its on the church property marketing department with the decline of the WMU (Women’s Missionary Union for the younger generation). My mother has said that the WMU at her church is primarily 70 and 80 something women with few coming behind them. Again from my experience growing up, the ladies of the WMU really did the job in promoting giving to Lottie Moon as they would speak in each Sunday School class to encourage giving. It seems that the WMU went out of favor as a consequence of the CR and there hasn’t been any other group which has formed to take its place in promoting giving to missions.
In conclusion, is it any wonder, giving these overall trends that giving to the Cooperative Program and the IMB might decline.
That being said, what can the IMB do going forward to improve their fiscal situation.
1. First, do an analysis of the sources of their income. I have heard that most churches have the 80/20 principle of giving where 80% of the giving comes from 20% of the members (or a smaller group than that). Years ago, the pastor of my church (at time) became visibly angry when he said that he had looked into the books at the church and discovered that 50 families were giving over half of the offering in a church of over 3,000 members. He also found that there were hundreds who attended and gave absolutely nothing. I suspect that the IMB may also discover that of the 44,000 churches the 80/20 rule or perhaps 90/10 rule may be the case when it comes to giving to the Lottie Moon offering.
2. You may ask, “What can be gained by this knowledge?” my response is that any business needs to know its sources of revenue and the same is true of a non-profit. If they find that two to three thousand churches are giving 80 to 90%, then it behooves them to reach out more to the large numbers who are not contributing. In other words, they will see that there is a lot of untapped potential.
3. To increase giving, they could consider how to reinvigorate the WMU or come up with some other organizations inside each church to promote giving to missions. Any business knows that marketing is essential.
I realize that there were tough economic times in the period of 2008 to 2010, however, the stock market has come back (and been roaring recently), the real estate market has recovered, so the causes for the decline in giving at that time have long since passed. Therefore, if there is still not enough income coming in, then other issues need to be considered (like those I have discussed) and new solutions need to be considered.
One last question. Where is the accounting for retirement benefits for long term missionaries? I am curious if part of the motivation for encouraging many to resign was to remove the long term liability of paying retirement and health insurance costs for retired missionaries.
David:
I have not yet delved into the question of how the IMB handles retirement. But a glance at Notes 8 and Notes 9 appears to give the answer. These notes are on page 289 and 290 of the 2016 SBC Annual. These footnotes are very “dense” and you just can’t read them and have any clue about what they say without pouring over the stuff.
Here is my guess at the essence of what it says. “Future retirement costs are reflected in our financial statements based upon the present value of these costs. Our present value is determined based upon an actuarial model as a function of age at retirement. ”
Then we might see some mention of the fact that the IMB has purchased what is, in effect, a life insurance policy on each employee — probably a group policy for all of them who retire in a given time window — which for some fixed some
cost — transfers the risk of making the retirement payments to the insurance company.
Again this is just a guess, but this in common in industry. I don’t know if non-profits do this or not. If not then they have to have a special bucket for accounts which are “contingently payable” for retirement [contingent on a person’s age and life expectancy]
P.S. — A very cursory reading of footnote 8 seems to suggest that the “insurance company” is Guidestone. Looking at page 281 we see a Balance Sheet entry for “Accrued postretirement and postemployment benefit obligations”. This makes sense since retirement benefits are carried on the books as a liability. At Y/E 2015 retirement liabilities were carried on the books at $207,489,000. As you can see, Retirement Costs are by far the lion’s share of all liabilities on the books of the IMB. Total liabilities are $293MM and retirement liabilities are $207MM.
Accounts payable is only $35MM which I would say is “small” for a business with assets of $369MM.
Roger, thanks for doing the digging. From what you have found, the retirement obligations are 86% of all liabilities of the IMB, so it seems to me pretty obvious that the leadership has a great incentive to reduce this expense going forward. This is not to cast nefarious motivations towards them, it’s just simple math. While they have had aspirations of putting more personnel in the field, an increasing percentage will most likely be short term and a decreasing percentage long term, just to reduce the long term liability of paying pensions and health care for retired missionary and in office personnel.
This has been seen repeatedly in the corporate world – General Motors was forced into bankruptcy because they had essentially become a company providing health care and pensions to retirees and the income from car sales was not enough to cover these costs.
Likewise, many state, city and county governments are struggling to pay these costs and many probably won’t be able to do so at the promised levels – the State of Illinois comes to mind as one of the most severe situations.
Given these realities, it would probably be beneficial if some explanation were provided to the SBC as over time, the missionary force transitions to a more temporary short term force – many of whom may be supported by their home church and friends. There will of course be criticism, but the churches can either contribute more or support a more short term force who are constantly being replenished with some percentage still long term. Another factor facing our country as a whole is that life expectancy has increased yet the retirement age has not. Therefore, the retirement programs (and especially Social Security) are under pressure and this is a consideration which the leadership of the IMB has to consider, too.
From my limited experience, I think many churches simply don’t give as much to the CP as we would hope/expect them to give. For several years I served as an elected officer for the Baptist State Convention of Michigan. The largest churches were typically the lowest givers to the CP (both in total giving and in percentages). I have a suspicion, that problem is not unique to that state.
Of course, this goes back to SBC identity and other issues your raised. The entire picture is complex. However, I think a lot of responsibility falls on those in leadership at SBC churches. If the visible leaders in the church speak passionately and teach clearly on 1) why missions is essential, and 2) why the CP is good model for giving, the trend would inevitably change. Even if giving by members didn’t go up much, budget percentages would change in business meetings, and priorities would be seen differently.
The IMB sets up Guidestone retirement accounts for its missionaries, and it also assists them with Social Security. So, retired Ms have those two income streams. The IMB provides retirees with a small group life insurance policy. For me the policy would pay $10,000. The IMB also provides us with a stipend to help us pay for Medicare Part B and medical insurance. My understanding is that the IMB has to demonstrate to the government that it has sufficient financial reserves to cover its retirement liabilities.
Mark:
Do you get a 1099-R each year from Guidestone which indicates your retirement pay from the IMB? The reason I ask this is that it might help to inform the question as to whether the onus to make retirement payments has been assumed by Guidestone or whether Guidestone is merely serving as a processing agent for retirement disbursements. The question I’m trying to ask, and I admit I’m asking this in a crude manner, is “has the IMB purchased fully paid up insurance for former IMB employees that have already retired?” Coming straight to the point, who is now ultimately footing the bill for those currently on retirement: IMB or Guidestone?
I think this is the operative language which is taken from footnote 8 [page 289 in SBC Annual 2016] :
MISSIONARY PENSION PLAN:
“Since 1981, the Board maintained a noncontributory defined benefit pension plan for missionary personnel. Effective December 31, 1995, the Annuity Board of the SBC [now known as Guidestone] assumed responsibility for this plan. All plan assets, liabilities and administrative responsibilities were transferred to the Annuity Board [now known as Guidestone] on that date.” Here is the red letter sentence . . . “At the time of transfer to the Annuity Board, plan assets were substantially equal to plan liabilities”
Then we have a paragraph that define annual contributions made by the IMB to Guidestone to fund the plan.
Then we have wording for HOME OFFICE PENSION PLAN which is also a defined contribution plan
So I think I’ve answered my own question by looking at Note 8.
I am getting into deep water which is over my head.
NOTE 9 [page 290 of 2016 SBC Annual]:
Note 9 covers [1] “certain payments to former employees who are not retirees” and [2] “certain benefits to retired employees such as health care, life insurance and tuition assistance for eligible retired employees”. Payments under Note 9 are carried on IMB’s books as liabilities. Note 9 does not cover retirement pay
In a previous post I stated that “retirement pay” is carried on IMB’s books as a liability. This is not correct. I apologize for propagating false information. My problem was that I was not adequately differentiating between Note 8 items and Note 9 items. Both items relate to payments to persons who were employees of the IMB.
Note 9 items are carried on IMBs books as a liability. Note 9 items are NOT retirement pay.
Note 8 covers Pension Plans aka “retirement pay”
I should have added that the IMB deposits 5% of a career missionary’s salary with Guidestone each month. This payment is not deducted from the missionary’s salary. The IMB used to pay in 10%, but during the economic recession the retirement account payment was reduced. I hope that the IMB trustees will restore the retirement benefit to 10%, once financial stability is regained.
Roger,
This is more complicated than you might think. Before 1981 the IMB (then FMB) provided a pension for its missionaries. After 1981 the IMB set up 403B (like 401K) accounts for its career missionaries with the Annuity Board (now Guidestone). So, some missionaries get a pension payment, based on the number of years served, and they also get a payment, based on their 403B account. In regard to the 403B account, missionaries have the option to make that money into an annuity or to receive monthly interest payments. Either way the pay out is handled by Guidestone. The IMB is self-insured in regard to medical insurance for its missionaries; however, Cigna administers the plan for the IMB. I receive a 1099R form for my IMB pension, but I have not begun drawing on my 403B account. So, I don’t know how that is handled. Maybe Ron West can tell you.
I downloaded the SBC Annuals from the Executive Committee website for the last dozen years. Looking at the title page of the annual for any given year, the date of the Annual Meeting is listed. Does this imply that the annual is either posted as a PDF up on the internet and/or distributed to the messengers as a physical printed document at the time of the convention?
I know many of you attend the annual meeting from time to time — so many of you must know the answer to this question. Once the 2017 annual comes out then I’ll take a look at the IMB financials for year ending 2016.
Based upon the word on the street, income should be up and expenses should be down.
Roger
When the VRI was announced, Executive VP Sebastian Traeger said something to effect of, “…no one joins an organization to retire from it some day.” He wasn’t being dismissive of long-term employees; instead, he was stating a reality in today’s working culture. Eventually, he added that retirement benefits would be reduced beginning January 2016.
Since the VRI/HRO, I’ve yet to meet someone with as many years in the organization as I, and I’ve got between 15-20 years. We’re getting younger as an organization, I think. Not sure that’s either here or there – just seems to be the reality.
But returning to the topic: eventually retirement benefit burdens should shrink for the company. As well, longevity-based pay increases should become less of a burden; coming at five-year intervals, the bump will apply to fewer and fewer people as average tenure shrinks further below the current 8-9 year average.
Several comments:
Ethan, Sebastian’s comment is an example of the change in the ethos of current IMB leadership. When Mark Terry and I were appointed, if you even hinted you did not plan to stay with the FMB/IMB until retirement you would not be appointed. I am sure Sebastian cannot understand that mind set. Of course, not everyone stayed until retirement for various reasons. The first several years I served we would recognize those retiring every year from our field of service. There would always be several with 35 or more years of service. I retired after 32 years in 2010 and I was the longest serving missionary in our country at the time. Mark had several more years than me.
Roger, as Mark said, before 1981 the FMB/IMB provided its own pension for missionaries. It was woefully inadequate. Many retired missionaries lived on the verge of poverty in retirement. Beginning in 1981 the retirement was shifted to Guidestone. Those of us who served before 1981 such as Mark and I could draw the IMB pension for those years or have the value of it transferred to Guidestone, which I did. As for as our retirement with Guidestone, as Mark said the IMB contributes but that is the end of their involvement. It is between us and Guidestone. My 1099 comes from Guidestone.
The reason for the financial problems at the IMB were not in my opinion because of the number of missionaries under appointment. I believe it was because there was a definite change in spending methods, priorities and accountability beginning in the late 90s. These changes were made by the administration and the trustees. However, it was the missionaries who paid the price for past mistakes by being asked to take the VRI or Hand Raising offers.
David, you make several good points. We have faced a perfect storm of sorts at the IMB. In recent years, we have seen less emphasis on the cooperative program by churches and less emphasis on missions education as exemplified by fewer churches with WMU, Ras and GAs. We had self-inflicted wounds by the IMB with their emphasis on servicing mega churches while ignoring smaller churches and doing a poor job of communicating by cancelling regular publication of The Commission Magazine.
Before the Voluntary Retirement Incentive induced hundreds of missionaries to retire, the average tenure (total years years served with the IMB) was nine years. I don’t know what it is now. I assume it is lower. At the annual meeting of missionaries on the field, held region by region, missionaries are honored for increments of service–5 years, 10 years, etc. In my last years on the field very few were honored for more than 10 years. I believe this is due to cultural factors in the USA, at least in part. Very few employees now would envision remaining with their company for thirty years, nor do they want to do so. I believe another factor is the organization culture of the IMB. When we were appointed as missionaries in 1975, the IMB had a strong family culture. That disappeared with the reorganization of 1997. After that, the IMB took on a corporate or business ethos. I conversed with many missionaries who grieved over the loss of their “mission family.”
Truth here. Truth of the kind that can only come from a brain well nourished with real barbecue.
Bart, we must get together to eat barbecue and chat–in that order.
Amen!
The average IMB giving per sunday morning SBC attendee is around 80 dollars per year. That can easily be improved upon with a little effort. Sending out videos in October won’t cut it. Connect IMB family units directly to churches. Assign each missionary family to a church. That’s about 25 churches per family. Have the missionary initiate and maintain communication with the 25 churches assigned to them updating them on the work, prayer requests and needs. Lottie Moon giving would go up exponentially just because someone they know finally asked.
If that’s too hard just hire a professional fundraising firm and pay them 15% to develop and carry out a marketing strategy. They would run circles around what we are doing. The money is there because I seem them give it to any and every missions organization that shows up at their churches and asks.
Tim B:
Maybe in the old days, [ca 1950s] churches gave to Lottie at Christmas. Now churches have a “Global Missions Offering” at Christmas time instead. Now most people in my church don’t even know who Lottie Moon was. They think Lottie another line of cosmetics — maybe like Mary Kay — or someone like Joyce Meyer.
Here is the breakout of how that offering is spent:
(a) “some” to help provide assistance to church members who go on mission trips of several week’s duration — either elsewhere in the USA or in Canada or Mexico or to another continent [Asia or Europe]. This trips may be doing projects to assist NAMB or IMB missionaries
(b) “some” to fund various ministries such as “inner city” ministries
(c) “some” to fund Lottie Moon
(d) etc,
I think the shifting from SBC wide missionary offerings to offerings which are targeted to a specific church related trip and/or trip headed up by some consortium of churches [maybe with some coordination by the state convention] is putting a damper on Lottie Moon.
Also, I would be derelict in my duty if I failed to acknowledge a point made by our SBC President Dr. Steve Gains, who says [quoting Dave Ramsey]: “The average American spends $1.25 for every dollar that they earn.” People are hopelessly in debt. The middle class has been significantly gutted so more and more resources are in the pockets of “wealthy” people — by wealthy I mean people whose net assets are around $500,000 or more — including the equity in their house”. Wealthy people are giving tons of money to stuff — such as massive buildings at Falls Creek and at the seminaries. But evidently, there are not enough wealthy people to replace the giving vacuum left by financially strapped middle class. This debt problem puts a damper on giving — in constant inflation adjusted dollars — to both CP and Lottie. These two funding mechanisms have historically financed the lion’s share of IMB’s operations.
Dr. Gains said he plans to address “personal finance” at the Annual Meeting in Phoenix. On a scale of 1 to 10, I’d give this idea a 12.
As it relates to debt, a lot of this is due to college tuition loans which can run anywhere from $10,000 up to as much as $50,000 [or more]. When I went to school and finally walked away with BSEE and then later MBA my total college debt was zero. And I came from a lower economic background — my parents were divorced when I was in high school. A wide swatch of the population — which is probably demographically coincident with rank and file SBC members are crushed under debt.
If you happen to live in a “treasure island” surrounding maybe 20 large USA cities then you are “rich”. That’s probably why we see huge and prosperous churches there: Prestonwood, Saddleback, Brook Hills, Quail Sprints, Johnston Creek, Bellevue, Woodstock, etc. Churches have the resources to undergird various ministries — some of which may be IMB and NAMB related and some not.
A tectonic shift seems to be re-arranging the whole financial structure which keeps the SBC going.
I refuse to believe that the money is not there for the asking. I’ve been in services where a group who digs wells raised 5k, watched ss classes and individuals pledge 50 bucks a month for a ” compassion” child and church after church spend more on trinkets for shoebox than they give to support imb missionaries. The money goes elsewhere because the imb is invisible in our churches.
After talking with some friends about this over the past few days, I’d like to reiterate what I said above. We’re only a month or two away from knowing the 2016 data and the new situation of the IMB post-VRI. I expect that the new situation will be considerably different than the numbers Roger has analyzed for us here. At that point we’ll have a much fuller picture of the situation than we do today.
FYI: The IMB has just released the Lottie Moon Christmas Offering total for 2016 and it was almost $153 Million, the fourth highest total. However, it was down 7.7% from the record high of 2015 which was received amidst the news of the voluntary reduction in personnel and it was lower than the giving of 2014, which was $154 million (the second highest total giving). Here is the link to the Baptist Press article: http://www.bpnews.net/49001/lottie-moon-offering-nears-153-million