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Late last year (2004), I received a number of questions from across the country about the PW triennial budget, and because I was not sure how to answer them, I asked for help from some friends of VOW – Gary and Penny Stewart – who are in the accounting business.  I gave them the 2004 –2006 PW budget, and they compared it to the previous one. 

The first thing they told me about the new PW budget is that there were some positive changes from the previous document:

1. The new budget is more comprehensive.  For example, the 2004-2006 budget shows “Designated” and 
“Temporarily Restricted” columns that the previous budget had not shown.

2. The new budget includes a list of definitions that is helpful, even though some of the definitions are less than clear.

(Let me say as an aside that I believe that our PW leaders have an affirmative obligation to answer our questions. If we are unsure of something about PW, we should take the time and expend the energy to ask.  Conversely, the folks in Louisville should take the time and expend the energy to answer.)

The five issues they raised were as follows:

1. There is a whole section in the budget called PCUSA Mission Program Support.  This is not broken down.  How is this money spent?  This line item has an asterisk by it (shown under Expenditures on page 2.).  However, nothing we have shows any detail. 

2.  Investment Income (aka Interest) is not allocated to Designated or Temporarily Restricted funds.  Interest earned on Designated and Temporarily Restricted funds should be kept with the fund that made the interest (i.e. whatever interest is made on the Birthday Offering should stay with the Birthday Offering).  The Investment Income is shown under the column Total Unrestricted (Shown on page 2 in the Revenue).

3.  The Honorary Life Memberships raises a question.  The budget shows $450,000 in income and only $235,000 expense.  Where does the remaining $215,000 go?  The $215,000 is 48% of the total income—that’s quite a large percentage.

4.      Birthday and Thank Offerings.  Both show an income of $3,000,000.  The Birthday Offering shows expense of $2,809,200 — a difference of $190,800 or 6%.  The Thank Offerings shows expense of $2,659,200—a difference of $349,800 or 11.6%.  This may or may not be reasonable for administration of these offerings, but might be questioned.  What expenses are involved in administering these offerings?

5. Has anyone looked in to where the $168,000 of “other” revenue comes from?  All the definition sheet says is, “Miscellaneous donations to PW.”
I sent these questions off to Ann Ferguson (PW Program Coordinator in Louisville) at the end of January (January 20), and stated clearly in my cover letter that we would post the answers on our website and in our quarterly newsletter. 
 

 
1.      PCUSA Mission Program Support is the estimated contribution to General Assembly Council Basic Mission Support.  There is no breakdown because the entire amount is designated to one line of the General Assembly Council budget, Basic Mission Support.  For a description of Basic Mission Support and the work it made possible in 2004, please see the PCUSA 2004 Annual Report available from Presbyterian Distribution Services.

2.      It is standard nonprofit accounting practice for interest income from all sources to be allocated to the overall budget unless otherwise designated by the governing board.  The Churchwide Coordinating Team chose to allocate interest income to the overall budget.

3.      Honorary Life Memberships is difficult to follow as it is presented.  I have asked the staff, with the help of our Account Manager in Mission Support Services, to research this question in order to provide a clear and accurate response.

4.      The administration costs for the Birthday and Thank Offerings are quite reasonable, and in fact, are below the average costs for such programs.  Administrative costs include applicable salary and benefits, telephone, office supplies, photocopying and mailing, as well as the production of interpretive material.  The Birthday Offering poster and the outside artist engaged to create it increase the cost of the Birthday Offering materials.

5.      Other revenue includes travel reimbursements which elected leaders and staff return to PW, undesignated gifts from individuals and revenue from the sale of specialty items at the Churchwide Gathering.

1.      Since the amount is spent from the General Assembly budget, it would go to cover any costs in that line item.  Since I do not have access to the GA budget, I cannot tell how the money is actually spent.  Since it is not designated as to how it should be spent, it could go to any mission item supported by GA.  There are probably amounts spent for which VOW would not support that particular activity.  Some other churches, individuals, and organizations earmark their donations to specific programs leaving more funds from the Presbyterian Women going to some more “questionable” mission items.

2.      When I prepared reports for the City of Loveland, interest earned on restricted funds was kept with those restricted funds and was not shown as general interest that could be spent on any item.  The response from prior years has been about the same as the response this year.  Since the funds were designated for a special purpose by the donors, the governing board should not be able to have any say over whether or not the interest should also be restricted.  If the governing board “designates” how funds will be spent, then they can also control how interest earnings should be allocated.  The “restriction” by the donors should override the ability of the board to designate the income.

3.      This question was not answered.

4.      Just because they say the administrative costs are “reasonable”, donors can still question why the costs were from 6% to 12% of donations.  If the amount spent on administrative costs seems too high to the donors, they can choose not to contribute to the specific offering requests.

5.      The listing provided in the answer does clarify the sources of these funds.  If the definition of Miscellaneous donations in their report had included this information provided in the response, we would not have had to ask for it to be clarified.

We also hope that you will determine to make your questions known to Louisville, and that you will persevere until you receive the information that you need.  We would also appreciate it if you would be willing to share the questions you have asked with us, along with any answers that you may receive.  That way, we can all be better informed as we move forward in our support of Presbyterian Women.