By Noel Bruyns
The devastating ripple effects of the Asian crisis luckily left the World Council of
Churches relatively unscathed because it did not have large cash investments during the
downturn in the financial markets.
Also, 1996 was an exceptionally good year for investments. This meant a welcome windfall
of 10.6 million Swiss francs for the WCC. Meanwhile, investment returns of 2.3 million
Swiss francs last year meant that, in real terms, the net operating results for 1996 and
1996 were positive for the council. The previous two years showed a deficit.
WCC financial director Robert Christeler mentioned these facts when giving an explanation
for the ordinary person in the street of the WCC’s latest financial report.
Given the turbulent financial market, it is unwise to continue to rely on investment
revenue to cover the council’s running costs. We have to make expenses independent of
investment income. Otherwise there will be dire consequences for the council when the
investment markets tumble," Christeler said.
In the meantime, the WCC continues to issue strict ethical guidelines to its investment
managers.
"On the one hand, we do not want to give the impression we are heavily into
speculating on the money markets. We adopt a cautious prudent approach and restrict
investments to ethically acceptable companies.
"But when we are ‘victims’ of an investment upturn and make 10 million
Swiss francs as we did in 1996, at least this alleviates the losses we incur and the
investment deficit returns of other years," Christeler said with a wry smile.
The council made itself vulnerable when it pursued a narrow source of funding.
"We must decrease our dependence on traditional Western and Northern European
partners, who are also feeling the ripple effects of the economic downturn. And the
churches in Germany, for example, have to make the difficult decision whether to finance
international ecumenism through the WCC or help meet the local social demands after the
reintegration of the former Eastern Germany."
Instead, the council should diversify its sources of income.
"We are looking at building stronger relations with North America, because with
closer relationships and understanding come a deeper commitment. That will hopefully lead
to a more generous source of income," Christeler said.
North American churches made a relatively minor contribution, compared to Scandinavian,
Dutch and German churches and church agencies.
Fees from the 332 member churches accounted for only about 10 per cent of the total income
base, between six and 6,5 million Swiss francs, and only about half of the churches paid
their membership fees.
"The minimum amount suggested is US$1000 — which is a modest amount for even
poor churches. Membership and participation entail not only right but also obligations,
including financial obligations. When member churches do not contribute even a symbolic
amount, this poses a difficulty," Christeler said.
Nevertheless, he found it an "encouraging sign of commitment" that the level of
income from member churches had remained stable and had not dropped in recent years.
Churches in the Asia region who were also badly hit by the Asian financial crisis were not
expected to be able to make significant contributions "for a while".
Christeler warned in his preliminary financial report that the WCC’s financial
recovery would require strict application of budgetary control procedures, as well as
ongoing adjustments of expenditure levels to match income trends.
"It is evident that contributions, especially Program Activity, will not be
re-established to their prior levels in the foreseeable future, and that the council must
pay particular attention to developing its investment and real estate income sources as a
way to decrease its dependence on outside contributions from traditional partners, who are
subject to some of the same financial restrictions as the council itself," he said.
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