There have been some people who have raised questions about the financial reserves IMB has on hand. Some of those questions have been raised by anonymous commenters on my blog as well as others. Our IMB is open and honest about its finances. If anyone has a question about IMB finances, contact your regional IMB representative. They will be glad to answer your questions. If you are unsatisfied with the answers from your regional IMB representatives, contact our IMB headquarters in Richmond. I'm certain your questions will be taken seriously and given a great deal of attention.
In a spirit of being completely honest and open to all Southern Baptists regarding the current state of IMB financial reserves, I have been given permission to post the contents of a letter from an IMB financial officer in response to a question from a SBC pastor who cared enough to go to the source. Here is the content of that letter.
A recent caller to the IMB asked what on the surface appeared to be a rather straightforward question: "What are the total financial reserves of the IMB?" The caller was looking for one number: the total.
The staff member answering the call could have easily obtained that number by looking at the board’s balance sheet and indicating that number was about $216,000,000.
There are several problems with the answer to the question related above. The first problem is that the words reserves and investments cannot be used interchangeably. While it is true that reserves would be invested, there will always be investments (in particular short term cash flow investments) that are not reserves.
The second problem is that it would be most unfortunate if the caller were left with the impression that the IMB had anywhere close to $216 million in reserves, particularly if the caller might be under the impression that "reserves" means funds that are or can be made available for current expenditure without collateral damage to the integrity of the IMB's financial support.
An even more serious problem would be created if the caller were to mention a $216 million figure to others, who would mention it to others, etc. Thus providing a complete, accurate answer to the "reserves" question is most important. So what is that complete accurate answer?
1. Contingency Reserve $ 47,500,000
The SBC requires a Contingency Reserve for the
IMB, up to 50% of the IMB's annual operating budget.
That 50% maximum would be $152 million for 2008.
2. Missionary and Staff Life Insurance Reserve 35,000,000
The IMB was the first SBC entity to be self insured
for group term life insurance coverage. This has
eliminated all of the profit and nearly all of the
administrative costs from the insurance program.
GuideStone Financial Resources administers the
program and manages the investment.
3. Global Missionary Capital Reserve 26,000,000
The income from this reserve is used exclusively
for missionary housing and vehicles.
4. Missionary Catastrophic Medical Reserve 2,000,000
The IMB is basically self insured for missionary
medical costs and maintains this reserve to absorb
extraordinary costs.
In addition to reserve funds, there are other funds or sums of money that are committed, restricted or obligated in some way:
5. Endowment/Gifts Restricted By Donors 34,000,000
The donors have directed that either the IMB cannot
spend the principal or the gift is already restricted
as to its use.
6. Funds Appropriated to Missions 42,000,000
Trustees have already approved these funds for
expenditure and missions are in process of doing so.
Thus these funds are temporary in nature.
7. Real Estate Held For Future Use 1,500,000
The IMB owns as a temporary investment a small office
building adjacent to the IMB which is held for future
IMB occupancy.
8. Post Retirement/Employment Benefits 28,000,000
The actuarial present value of the IMB's
post retirement and post employment obligations to
emeritus missionaries and retired staff totals $143,000,000.
We are only able to set aside a portion of this obligation.
This includes board designated and undesignated funds.
Total (Reserves, Committed, Restricted or Obligated) $216,000,000
As much as the IMB is dependent on the Cooperative Program and the Lottie Moon Christmas Offering, annual growth in those two vital sources of support have not been sufficient to fund the Lord's blessing through extraordinary growth in new missionaries. The IMB is deeply grateful that this third vital source of support, investment income, has enabled the IMB to say Yes rather than No to those additional hundreds of qualified, approved candidates for missionary appointment.
No Cooperative Program or Lottie Moon Christmas Offering funds are ever added to IMB reserves.
Perhaps you have noticed I have used the phrase "our IMB." I use this phrase on purpose as a reminder to myself and to all who read this blog that the International Missions Board is truly "our" IMB. I have always supported the administration and the missionaries of our IMB. Personally, I have committed to doubling my Lottie Moon contribution this year. My challenge to everyone is to raise your offering to Lottie Moon by at least 25% over what you gave last year. For the 51% of SBC churches who gave nothing to Lottie Moon last year, I challenge you to contribute to the Lottime Moon Offering by giving at least $10 per member this year. $10 per member is not that much. You can do it.
It is essential that Southern Baptists stand up and support the greatest missions sending agency in the history Christian missions, which is our IMB. Everyday is one day closer to the return of our Lord Jesus Christ. There are still 1.5 billion people who have not heard the gospel of Christ. We have plenty of people called by God to go, but not enough money to send them. The clock is ticking. The ball is in your court. What will you do?
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14 comments:
Les,
Are they audited? Do they publish financial statements for the public?
Thanks
Joe,
Our IMB is audited by a national CPA firm – currently Clifton Gunderson LLP. IMB issues a request for proposal (RFP) every 3 years for the audit process. Up until 3 years ago, they only used the big 4 firms. 3 years ago they made the decision to expand that to the 15 largest firms in the USA. When they did that, our IMB reduced our audit fee by approximately 50% and still believe they are receiving an excellent audit. Our IMB publishes financials with a report from IMB financial officers as well as the opinion from the auditors and routinely send those to any person who asks for them. The business and financial plan says IMB should send the financials to any Southern Baptist who asks but they will basically send them to anyone who asks. The easiest way to make that request is to send it through the contact center at www.imb.org.
Les
Good info, Les. Good job.
It surprises me that 51% of SBC churches didn't give to LM.
I have committed to increasing our offering again this year.
Dear Les,
Thank you for your post. I am an IMB missionary. I don't always "toe the company line". I think that attitude is what most missionaries have. That's just part of the way God makes missionaries. We are not usually "yes men". In all the years that we have been on the field, I have seen wise use of finances. No one is throwing around money haphazardly. Us field guys buy our own computers for office work. We are good stewards of our budgets, etc. The Richmond staff sacrifice as well and feel the missionary calling just as profoundly as we do.
This year we have been asked to cut back drastically on our budgets. That means sacrifice on all of us and money out of our own pockets to see some projects finished and things get done. I don't say that begrudgingly. Reaching people is a priority.
I do have to be a little amused as I was back on Stateside Assignment this past year, to see incredible money being used for state of the art video projectors, computers, the latest in blackberry or iphones for staff. As I looked at the homes and cars of staff and church members, I was a little wistful of how I will never be able to afford such luxuries. All that to say, it's ok, this is not my home. God has called each of us to be good stewards of what he has given.
I honestly can say, the IMB is a good steward of the finances the Lord has given. Our task is not to "entertain the flock" with the newest in technology, but to reach those who are lost anyway possible.
OK, enough preaching by myself. Again, thanks for the insights of your post. And Joe, yes we are audited down to the most basic missionary and that's good.
Anonymous Missionary - I am a staff member, and I drive a 10-year-old car. I have a blackberry because my job requires that I be available as needed. As a staff member, I'll remember that while your children's education is greatly subsidized by the company, mine is not ... However, we work together for the same purpose.
Thanks Les. As a former Trustee of a seminary I recognize that talking about reserves is a complicated issue. Your post helps all of us recognize the huge undertaking we as Southern Baptists have received- making disciples of all the nations!
Thanks for your diligence in this matter
Les,
I apologize for the "pity party" that I threw as a missionary. I went to bed last night, tired and a little aggravated. I guess I cam out a little too strong.
Yes, we are doing all that we can to be faithful stewards. We do not take the faithful giving of God's people for granted. We are blessed.
Thank you for giving an explanation for the reserves.
God bless. As Steve said, thank you for your diligence.
I am sorry for signing in as Anonymous, but security is the issue.
Les,
The combined amount of reserve: $216 million. That is a lot of interest accumulated in one year. Hypothetically, if the combined amount of reserve were to garner 4 percent yearly interest, that would be $8.6 million of interest earned in 365 days.
The interest, alone, would nearly be enough to cover the $9 million deficit. Why not use the interest accumulated to fund the missionaries?
--chadwick
Chadwick,
All of IMB's reserves are invested. The Life Insurance reserve is at Guidestone and all the earnings go back into that account. The other reserves are invested in a balanced asset allocation and they use a spending rate to determine how much they will spend of their invested funds. Whether IMB has negative returns – like last year – or positive returns like most years, they spent a set percentage. This is reflected in their operating budget – their third largest source of income is investment income. IMB believes it is good stewardship to invest their funds and to do everything they can to invest them wisely.
Hope this helps.
Les
Les,
One word: gobbledygook!
What a waste . . . investing money into "Giddyupandgobrokestone."
The IMB's greatest investment should not be in "OS STOCK", but the salaries of the IMB missionaries.
The more information I find out, the more disappointed I become.
--chadwick
Chadwick,
Allow me to put it more simply. Reserves are invested. The principle can't be spent except on those things for which they are in reserve for as noted by the post.
A part of the return on the investments ARE spent on missionaries. The income received from investments on reserves make up a huge chunk of IMB's annual budget.
As my original post said, "this third vital source of support, investment income, has enabled the IMB to say Yes rather than No to those additional hundreds of qualified, approved candidates for missionary appointment.
Rather than disappointed, I am very happy with the wisdom our IMB is employing in handling God's money.
Les
Thanks for this information Les. Though it took some time, I was given clear and concise financial records by the IMB, but I appreciate the time you took to explain the "reserve" funds. I pray God would stir the hearts of Southern Baptists in amazing ways during this Lottie Moon giving period!
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