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 WCCs latest financial report.
Given the turbulent financial market, it is unwise to continue to rely on investment revenue to cover the councils 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 WCCs 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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Read other articles in this issue:
Assembly theme, carved and examined
Moderator: affirm human rights, teach one community
WCC-Orthodox relations 'critical'
Assembly theme turned to sexuality
Pluses and minuses of council finances
|8th Assembly and 50th Anniversary|