Fiscal Caution Ahead : Evangelical Lutherans Fall Short in First Budget

The Evangelical Lutheran Church in America has ended its first fiscal period with a $15.8-million shortfall, representing about 15% of the church’s expenditures during the period.

Treasurer George Aker reported to the recent Church Council meeting in Chicago that the deficit occurred despite spending that was $7.7 million below the approved budget of $112 million for the church’s first 14 months.

However, income from Jan. 1, 1988, to Feb. 28, 1989, was only $88.5 million--$15.8 million less than expenses.

“The church is looking at a critical shortage,” Bishop Herbert W. Chilstrom told council members.

The Evangelical Lutheran Church in America came into being in 1988 through merger of the American Lutheran Church, the Lutheran Church in America and the Assn. of Evangelical Lutheran Churches. It is headquartered in Chicago.

Impact Unclear

The impact of the shortfall on church programs was not immediately clear, but one direct action taken at the Chicago meeting was to limit 1989 spending to 93% of the current $99.3-million budget, down from the 95% level authorized in November.

According to a church announcement, the $15.8-million deficit for 1988 is being covered with $7.2 million in reserves carried into the new church from its three predecessor bodies and $4.9 million from sale of property, mainly a former headquarters building in New York City. The remaining $3.7 million is to be covered by working capital reserves.

Aker told Religious News Service that the most visible effect of the shortfall will probably be “caution as we go through the 1989 fiscal year.”

In large measure, he said, the difficulty is “more a matter of getting to know the fund flows” as the church emerges from its infancy.

Care in Spending

The 93% spending cap for the current year, Akers said, amounts mainly to “a careful analysis for spending over the current fiscal year” for all agencies.

Chilstrom pointed to several reasons for the shortfall, including a shift in giving patterns in society as a whole to “causes close to home.”

The bishop said church members appear to be giving more at the local level but cutting back in giving to regional and national church bodies.

Chilstrom also observed, “Merger calls for some major upheaval and upsets long-standing loyalties.” New loyalties, he said, can “take some time” to build.

Competing Causes

The bishop also suggested that there are a “proliferation of causes” competing for donations and a “growing suspicion of leadership and people in authority.”

He discounted, however, suggestions that the decline in giving comes in reaction to the church’s involvement in social causes that may be unpopular. Chilstrom said involvement in those causes seems to increase support “precisely because we have the courage to wrestle with difficult issues.”