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PRESS RELEASE NO. 09

LWF Treasurer Johanne Wremer Calls for "Matter-of-Fact" Attitude on Finances

WINNIPEG, Canada, 23 July 2003 – The Treasurer of the Lutheran World Federation (LWF), Ms Inger Johanne Wremer has paid tribute to the LWF member churches and partners for their unwavering solidarity and financial commitment over the past six years, but also called for a “matter-of-fact attitude on financial policy and practice,” in view of decreasing income.

“The years since the Assembly in Hong Kong have been rewarding ones for the LWF, [but] also tough and challenging from a financial point of view,” Wremer said in the Report of the Treasurer to the LWF Tenth Assembly, July 22.

She pointed out that between the 1997 Ninth Assembly in Hong Kong, China and the current Assembly, the LWF recorded an overall income of USD 580 million of which USD 524 million went to programs, projects and emergencies. She acknowledged the financial means available in the LWF but expressed deep “concern that the needs of the member churches remain greater than the resources available to meet those needs. Certain areas of work are considered a priority, [but] funding is not necessarily available,” she noted.

Wremer, a member of the Church of Norway and LWF Treasurer since June 2000, noted that most of the funding is destined for specific programs and projects. There is need for more un-earmarked funding so that the LWF can work in an even more flexible way and respond quickly to new and challenging situations facing some of its member churches and partners.

The treasurer noted that the continued decrease in overall income has impact on the Coordination Budget of the LWF Geneva Secretariat. For most of the years since the Assembly in Hong Kong, the fluctuations in exchange rates have been to the disadvantage of the LWF. The Coordination (A) budget income has decreased by 10 percent between 1998 and 2002, to the current sustainable level of USD 9.5 million per year, Wremer said.

She attributed the decrease also to a 20 percent depreciation of the US dollar against the Swiss Franc, which overall makes the headquarters costs more expensive, and hampers the balancing of the budget. While these factors are beyond the control of the LWF, they have considerable consequences for the overall financial situation including difficulties in balancing the A-budget in recent years. In September 2002, the Council approved a resolution calling for a balanced 2004-2005 budget. The number of staff persons in Geneva has decreased from 92 in 1997 to 86 in April 2003. “The decrease in income may result in a further reduction of staff,” Wremer observed.

She stressed the need to tackle income decrease “in a very careful” way - by reducing staff costs and expenditure in general as well as keeping staff positions vacant for some time.” Although the reduced overall income also reflects the strained economic situation of some member churches, it should be underlined that most member churches and many related agencies contribute to the budget as much as they possibly can, Wremer underlined.

The financial situation has affected the Federation’s general reserves, which by the end of 2002 stood at USD 4.7 million, down from USD 6.7 million in 1998. Wremer described the financial situation as manageable, due to the “rather strict financial controls” but called “for soberness and very hard priority-setting within the LWF.”

The Treasurer expressed concern that the LWF may experience a further general decrease in income, saying this “has to be taken into account when the LWF discusses its aims and goals and sets priorities.” She urged the Council that will be appointed at the Tenth Assembly to “have serious priority setting discussions” on what the core functions of the LWF will be in the future. “A cut in activities has to be made if the financial situation does not improve,” she observed.

The LWF has always relied on and is dependent on member churches and church-related organizations for the main financial support for its activities. The decrease in income also reflects the strained economic situation of some member churches. Nevertheless it should be underlined that most member churches contribute to the budget as much as they possibly can.

On annual membership fees, Wremer said that this remains an important source of income for the LWF and an expression of commitment to the communion. Most member churches have already adjusted their membership fees to the new “fair membership level,” while others are still striving to reach it.

She expressed hope that the income from membership fees will not only remain stable, but again increase over the coming years to reach the level of fair membership fees for all member churches. When this goal is reached, the situation of the Geneva coordination budget will ease considerably and make the LWF even more able to provide member churches with the services they need. “I therefore strongly recommend that all members of the LWF pay the amount of their fair membership fee. In the present situation, expectations have to be adjusted to the financial realities, while at the same time the LWF must seek new funding sources.”

She mentioned efforts by the LWF to guarantee basic rights for education in different parts of the world, sensitize people about the HIV/AIDS pandemic, provide emergency relief assistance and contribute to the life and work of the member churches that are in a minority situation.

The LWF has also given priority to strengthening the organizational and institutional capacities of smaller churches, especially in the South. The need to also support smaller churches in theological matters has been underlined by many member churches.

One of the most positive aspects in the financial development of the LWF is the Endowment Fund, launched at the 1997 LWF Ninth Assembly in Hong, King China. The fund provides the member churches with an important instrument for securing the financial viability of LWF operations, especially those that are in the field, Wremer said. At the end of 2002, the Fund had USD 4.5 million. The goal is to have USD 10 million in the short term, and a long term of USD 50 million. Worldwide economic problems, recessions and exchange-rate variations in the contributions from member churches may threaten the activities of the LWF. The present difficult economic situation calls for creativity and hard work in order to find ways and means to get additional support for the LWF. Special efforts to improve the LWF’s financial situation also include prioritizing fundraising and streamlining.

In an update on the Augusta Victoria Hospital (AVH) on the Mount of Olives, East Jerusalem, Wremer explained the difficult political and financial conditions. Israeli tax authorities have taken the AVH to a lower court in Jerusalem over the payment of employer’s tax. The LWF has submitted an appeal to a higher court and at the same time, together with member churches, is pushing for political action from various governments.

She encouraged the member churches to pray for the hospital and also contribute to its financial security, for instance by holding special offerings.
 

The Tenth Assembly of the Lutheran World Federation (LWF) is taking place 21-31 July 2003 in Winnipeg, Canada, under the theme "For the Healing of the World." It is being hosted by the Evangelical Lutheran Church in Canada (ELCIC).

There are around 820 men, women and youth participants in the Tenth Assembly including 380 delegates from the 133 churches with full membership and three associate members. The Assembly is the highest decision-making body of the LWF, and meets normally every six years. Between Assemblies, the LWF is governed by its Council that meets annually, and by its Executive Committee.

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