Affirming the Service of Others
Before I explain why I submitted my name for synod treasurer, I want to affirm the incredible dedication of Mike Metzger who has served as synod treasurer for what I believe is two terms already, and who took on a great deal of operational responsibility when the synod office cut finance staff several years ago. Mike has been an incredible, well-liked Christian servant for the synod. My nomination for the treasurer position and my reflections below are not meant as a personal criticism, and I pray they are not received as such.
Systemic Issues and an Election with Choices
The issues I am raising here are systemic ones. I offer my thoughts as someone who has served quite a while in this synod and who cares deeply about its wellbeing. I have also learned a lot about the financial management of churches through mistakes and successes in the congregations I have served, and the secular non-profit I founded and run.
I want to add: I was reluctant to put my name in for treasurer because I am a clergy person and I believe that the officers of the synod should, as far as possible, be lay persons. But I also believe that we are stronger as a body when we have more than one candidate to choose from in an election, and we are forced to reflect, discern and make a decision. We are very fortunate to have not just one (the well-known servant Mike Metzger) but two laypersons nominated for treasurer. I want to thank Robert (Bob) McDuff for also standing for treasurer; he too is a highly qualified candidate with strong experience as treasurer of the Twin Valleys Lutheran Parish, as a member of the synod’s Budget and Finance Committee, and exceptional financial training. I see my nomination as a platform to hold all of us accountable as a synod. And it is my hope that whoever is elected as treasurer will address the concerns outlined here.
Management of the Monies, Accounts and Assets of the Synod: Operations vs. Oversight
The synod constitution defines the primary responsibility of the synod treasurer as: “management of the monies and accounts of this synod, its deeds, mortgages, contracts, evidences of claims and revenues, and trust funds.” Management can take various forms: it can mean do-it-yourself detailed accounting, or it can mean working with a team of staff and volunteers, overseeing that financial procedures are carried out effectively. Several years ago, when the synod cut financial staff positions, the treasurer assumed extensive operational responsibilities, making the treasurer involved in what I see as a dual role: a quasi-staff detailed operational role and as synod treasurer. Our ELCA guidances around financial practices stress the importance of having strong internal controls through segregation of financial duties and utilizing multiple, different people when dealing with receipts, payments, check signing, reconciliation, and preparation of reports. I believe it is in the best interest of this synod to make sure that best practices on internal controls are followed, that the treasurer should work in partnership with a team of administrative staff, exercising financial management in an oversight role. By shifting the treasurer out of direct operations to oversight, it will allow the treasurer more time to fulfill their responsibility regarding the strategic investment of synod funds and visioning and oversight over the reinvestment of large assets like properties. Perhaps more importantly, it would leave more time for the treasurer to build and maintain encouraging relationships with congregations around mission support.
Budgets and Financial Statements are Moral and Missional Documents
Budgets and financial statements are moral and missional documents because they tell constituents/members how we understand the Gospel of Jesus Christ and what we value by how we are spending our money. If you have a budget line for youth ministry, for example, it tells your members/constituents that you value investing in God's young people. It is extremely important, especially when drawing up budgets and financial documents for a membership organization like a church, where members vote to approve these documents, that the financial documents align with and articulate the mission and vision of the organization as clearly as possible. Some of the Gospel values broadly held in our synod include: a focus on congregations; support for youth; support for African-descent, Latinx, and our various Asian ministries; ministries with persons in poverty; lay education; outreach to young adults and other under-churched people; authentic diversity and inclusion with special emphasis on LGBTQIA+ inclusion; clergy renewal. How do our financial documents reflect these values?
Some tools for making the missional core of a budget/financial doc obvious are: clearly and descriptively naming budget lines; utilizing footnotes to explain why something is in (e.g., “education”) or not in (e.g., Director of Evangelical Mission Salary) the spending plan; preparing an inspiring and explanatory “narrative budget” to accompany the chart of numbers. It is critical that our financial documents align with and articulate our missional values so that members can catch the vision of the bishop/synod council, and we can build shared support and broader engagement across the synod.
Budget and Finance Committee: Transparency and Inclusiveness
The Synod Constitution and Bylaws establish the Budget and Finance Committee as the group responsible for the development of the synod’s budget/spending plan, and responsible for overseeing an annual audit in the absence of an audit committee. Its makeup is defined as 4 synod council members and 3-4 non-council appointees. But who are they? No information is readily available on the synod website, for example. Historically, the Budget and Finance Committee has been underutilized and, in some seasons, rarely convened. The synod Budget and Finance Committee is an opportunity for the synod to build an inclusive, diverse deliberative body to assist the bishop and synod council in developing financial plans and spending plans that clearly support the bishop’s and council’s vision for mission. I believe transparency and engagement across the synod could be greatly enhanced if the Budget and Finance Committee had regular, publicized meetings, its membership were built to capacity and made known to the synod, and the deliberations of the committee were made public in minutes, and its reports and materials prepared in a timely way. A more robust Budget and Finance Committee would also give the treasurer more partners in the fiduciary work needed in our synod.
Synod Financial Audit Needed: Transparency Builds Confidence and Support
Our synod constitution establishes an audit committee, and, in the absence of an audit committee, tasks the Budget and Finance Committee with making sure an audit is conducted and shared with the synod. There is no current audit available for the synod. The general rule in non-profit management is that an annual audit should be conducted when you have a budget over $500,000. The synod’s proposed operating budget for 2023 is $1,683,822. It’s balance sheet/assets (liquid and real estate) reach $31,000,000. The Treasurer and Budget and Finance Committee must arrange for an audit now. The purpose of an audit is manifold. It confirms accuracy in reports; it identifies where we fall short in regard to best practices, and it builds confidence in the non-profit entity. How can we as a synod ask people to provide financial support to an entity with such significant assets if we don’t have an audit report and demonstrate the strength of our fiscal oversight?
Budgets and Financial Statements Must Be Made Available for Review Before Synod Assembly in a Timely Manner
I recognize that everyone associated with the synod—whether staff or volunteer—is overburdened with responsibilities. None of us in the church have much time to spare. I miss report deadlines too. But financial reports are of a different order and require strict attention. I believe it is not acceptable to release the next year’s budget for synod assembly approval only a week in advance, and to only release the balance sheet and other docs only 3 days in advance. If the synod wants engagement and support around financial plans, and mission support, the synod should strive to release all documents sooner, at least 2-weeks before synod assembly is a fair practice. Ideally, financial reports should be available and accessible throughout the year through the synod office (as required by state law).
Communication: The Key to Engagement, Trust and Support
If the synodical expression of church together wants to build up engagement and support for synodical initiatives, then the synod—including the treasurer—needs to find ways to communicate more and more effectively with the members of our regional churches. Communication reduces anxiety, builds trust, and cultivates relationship and shared commitment. The treasurer can help in this process by not only sending requests for mission support bi-annually, as constitutionally required, but to reach out more frequently—perhaps quarterly—to check in with congregations; share updates on the financial wellbeing of the synod, and how assets are being utilized for the sake of the Gospel.
Sustainability
All of us in the church are well aware that because congregational membership has declined, mission support from congregations to the synod has significantly declined as well. This leaves the synod budget with a significant annual shortfall. We have been plugging our deficit budgets for years now by either utilizing investment funding (largely funded by earlier church property sales) or recent property sale proceeds. The current proposed budget asks us to approve that $741,178 in income, or 44% of the proposed budget of $1,683,822, come from investment disbursement (real estate sales). The proposed budget includes a significant overall increase because the bishop and synod council envision a larger synod staff to better serve the needs of congregations and who will focus on building up congregations. This is a new vision for our synod and one that could potentially bear fruit in the form of greater well-being, vitality and strength in our congregations. However, it is not a sustainable vision unless we strategically develop synod funding streams that won’t deplete our reserves funded by our property sales. I have long called for broader conversations across the synod about how to develop a sustainable vision and budget, and how to most faithfully utilize our properties for the mission and ministry of Jesus Christ. The treasurer should play a very active role, along with the Bishop, executive committee, synod council and budget and finance committee to develop sustainability plans and report back regularly and broadly across our churches to build long-term support for the vision of an effective synod.
Rev. Stephanie Jaeger, Ph.D.+
