May 5, 2022 | Miami, Florida, United States | Inter-American Division News
God has blessed the Inter-American Division (IAD) abundantly in its finances, said IAD treasurer Pastor Filiberto Verduzco on his treasurer’s report at the regional Mid-Year Meetings from Miami, Florida, United States. Now the key is to apply financial principles to assure the long-term financial sustainability of the church in territory, he said. Verduzco’s presentation on May 4, 2022, provided members of executive meeting online with figures and explanations of financial trends and expected challenges for 2023 and beyond.
Pastor Verduzco emphasized that trends and figures change but the leadership’s commitment to the mission of the church remains constant. “On the year of the Inter-American Division centennial celebrations, from a financial perspective, we would like to affirm the values we have as a Division,” he said.
He also made clear that God has been pouring His blessing through the unwavering commitment of millions of church members across the territory. “Year after year we have seen evidence that the Lord provides, but we also have faithful, committed church members who fulfill their roles with distinction. For many years now, we have had church members who are faithful, committed, and thankful to the Lord,” Pastor Verduzco said. “We have the tremendous challenge of answering accordingly to the faithfulness and commitment of our members.”A Balance Between Mission and Sustainability
According to Verduzco, the key for the Church to thrive is to find a balance between a sustainable financial platform that allows it to fulfill its mission in the long term. “It has been my concern for a long time,” he acknowledged. “How can we manage a sustainable financial platform in the long term while fulfilling the mission of the church?” he asked.
It is a combination, he explained, as both elements go hand in hand. “Financial sustainability is at the service of the mission of the Church. First, we need the mission of the Church and then, we must be sustainable so that we can fulfill that mission,” said Verduzco.
It is focusing on financial capacity, or, as he defined it, “having the resources that allow the organization to take advantage of opportunities and act accordingly, even during adverse and unexpected circumstances.”
Pastor Verduzco acknowledged that it is a challenge, but it is also the responsibility that the Church has given him and his team—“keeping a balance between sustainability and mission so the mission is not jeopardized,” he said.
Five Elements or Principles
Verduzco highlighted five elements or principles that can help frame an analysis of the financial trends and challenges across the territory. He mentioned income, expenses, financial sustainability, culture, and strategy. A sizable part of this two-hour presentation was devoted to flesh out some of the implications stemming from these five items. Three of them are shared below.Income
As regards Income, Verduzco explained that it is not only important to know current figures but also work to determining an income projection.
Verduzco reported that compared with 2019, in 2021 tithes increased 6.90 percent, and 8.71 percent so far in 2022. At the same time, tithes in 2022 have so far increased 19.82 percent if we compare them with 2020, at the height of the COVID-19 pandemic.
Mission offerings, on the other hand, decreased 2.35 percent in 2021 compared to 2019, but have increased 5.43 percent this year. In comparison with 2020 in the height of the pandemic, mission offerings in 2022 have increased 23.72 percent.
A historical analysis of tithes per decade since the IAD was organized in 1922 shows steady increases throughout the church region’s history. Every single decade has shown an upward trend, he said. Verduzco showed in a graphic that in the 2002-2011 decade, tithes increased 89 percent, and since 2012, tithes increased another 20 percent. This means that in the last couple of decades, tithes have more than doubled across the territory, he explained.
Expenses involve deciding how to apply income through “a realistic and conservative analysis” of the monies assigned or planned to fulfill the mission. “We must consider elements such as the additional tithe that per policy will go to the General Conference (GC) in the next few years, Hope Channel Inter-America expenses, the behavior of benefit plans for employees, and a reserve that we must have for the quinquennial GC Sessions,” he explained.Against that background, Verduzco explained that even though the current financial situation is positive, projected operating expenses show that the territory would operate with a deficit starting in 2027. A good percentage of that potential deficit is related to the increasing cost of benefit plans to employees. In that sense, Verduzco shared, “it will be necessary to implement strategies that modify the current trend impacted by the high number of participants in the benefit plan, which affects the projection in 46 percent.”
Keeping an eye on Financial Sustainability implies maintaining working capital and liquidity within the limits of security. According to GC policy also adopted by the Inter-American Division it is recommended that a church region or entity keeps a working capital reserve that covers for twelve months of its core expenses. The IAD expects to end 2022 with 20.47 months in reserves, well above the recommended amount.
Likewise, it is recommended that liquidity, or “the ease with which an asset can be converted into ready cash” covers for at least six months of core expenses. The IAD expects to end 2022 with a liquidity of 15.17 months, above what is recommended. That figure, however, is projected to gradually decrease until it becomes negative by 2030. “We need a sustainable plan for the next few years,” Verduzco said.
Verduzco reported that as of December 31, 2021, current assets have increased 5.8 percent and liquid assets, 4.96 percent, compared to a year before. Working capital increased 13 percent, with net assets 9.80 percent above 2020 figures. Current liabilities, or debts, decreased 1.90 percent, and accounts payable, 7.56 percent.
“Total operating income increased 20.3 percent, and total operating expenses decreased 20.25 percent, which resulted in a surplus 279 percent above 2020 levels,” Verduzco said. He added, “As a Division, we continue to be strong. Nevertheless, from 2023-2030, we must make special efforts to maintain our sustainability.”
In that sense, IAD Board members voted to support a plan of a financial feasibility study that is scheduled to be presented in the 2023 mid-year meetings. The plan also includes various strategies and assessments to make sure changes in appropriations and expenses will not hinder the fulfillment of the mission of the church, IAD leaders said.
Pastor Elie Henry, president of the Inter-American Division reminded board members that the key here is planning ahead. “You can see that we are focusing on a long-term strategy, to make sure we can maintain a financial sustainability,” he told them. “It’s not only looking at figures but analyzing what those numbers mean as we project ourselves into the future.”
Words of Thanks
Several board members expressed words of thanks to God and church leaders for the thorough financial report. “We have received a master presentation,” said Pastor Ricardo Marin, president of the South Central American Union. “Praise be the name of the Lord.”
Pastor Guenther García, president of the Guatemala Union, agreed, adding the key role of church members in this picture. “We should take a vote of appreciation to our members, who fund the mission of the church,” García said. “We have a generous church, a church that loves the Lord.”
In his closing remarks, Pastor Henry shared once more words of thanks and appreciation. “I want to thank the Lord for our healthy financial position, for the efforts we are making, and for the cautious management of resources. For me, this is an opportunity to say once more, ‘Thank you, Lord, for all you have done.’”