The CCMBC executive board financial committee presented a brief summary of the findings of the recent financial audit for 2013, as well as the 2015 budget.
In order to separate investment funds from day-to-day operating costs of the organization, the Canadian conference has created a separate legal entity called CCMBC Legacy Investments, Inc. All investment monies – including deposit accounts and mortgages given to churches and pastors – will be managed through this new entity.
The financial committee is working toward building a reserve fund valued at approximately 10% of the total amount on deposit (some $26 million). However, the reserve fund is still low (at only $2.7 million).
“We discovered we had overstated the value of our net assets [on previous years’ tax returns], which greatly lowered the reserves we had to work with,” said committee member Len Penner. (He explained that auditors had recommended a change in how the conference should manage land held for development, which initiated the change in reporting.)
In order to offset this difference – which is close to $10 million – the executive board has agreed to move faster in selling some 10 properties originally purchased for development. Penner said the properties are currently being appraised and will go on the market in the near future, although he suspects it may still take years to sell all the land.
Penner noted that the original purpose of the deposit fund – to provide mortgages for pastors and churches who may find it difficult to get loans from traditional banks – still exists. To date, the conference has provided nearly $87 million worth of mortgages.
Looking at the 2015 ministry budget, Penner noted that revenue from member churches has continued to decrease over the past years. How can we move to a place where conference ministry isn’t funded so heavily by interest earnings from the deposit fund?
“The best opportunity is not a cost reduction,” said Penner, “but one of revenue generation. We are far from tapping out revenue potential. One [income] line that has been flat is church contributions. What will it take for churches to have confidence and vote with their wallets? We need to earn their respect and find a way to connect with heartstrings.”
One workshop participant asked about budget expenses, wondering whether every dollar was spent wisely and efficiently. “Every time you open the Herald, someone new has been hired at the conference. It feels like it’s getting top heavy. What’s the actual amount spent on staffing?”
Penner said he was willing to find and communicate those figures to the constituency. Finance committee member Harold Froese also ensured workshop participants that CCMBC staff have been “tightening their belts” and trimming expenses over the past year. Gord Fleming, C2C Director, agreed: “I want to reassure you we’re not living high on the hog.”