September 17, 2004

GENEVA - The Council of the Lutheran World Federation (LWF) reiterated its call to LWF member churches to pay up their respective contributions of fair membership fees to the global organization.

The Council at its September 1-7 meeting near Geneva, approved a fair membership fee for 2005-2006 calculated on the basis of church membership size and the Gross National Product, without fixing a minimum level. All member churches were encouraged to pay up the expected amounts. Council members would be informed about the status of membership fees in their region and church.

The LWF governing body also approved a CHF 12.8 million Geneva Coordination Budget based on the expected income. The current projected expenditure of CHF 13,049,770 shows a deficit of around CHF 200,000 thus the General Secretary was requested to present a balanced budget to the Executive Committee by its meeting in February next year. This year's was the first full meeting of the Council elected at the July 2003 LWF Tenth Assembly in Winnipeg, Canada.

The Council's action were based on recommendations by the Program Committee for Finance and Administration, presented by committee chairperson Mr Peter Stoll, Evangelical Church in W*rtemberg, Germany. Stoll is also Treasurer of the LWF.

The 2005 Geneva Coordination Budget, so-called A-Budget, of which 80 percent are staff-related costs, currently includes CHF 3,425,944 for coordination of activities carried out by the General Secretariat and its Offices for Communication Services (OCS), Ecumenical Affairs (OEA), International Affairs and Human Rights (OIAHR), Finance and Administration, Personnel, and Planning and Coordination.

The projected amount for the Department for Mission and Development (DMD) is CHF 3,950,855; Department for Theology and Studies (DTS), CHF 1,075,550; and CHF 4,157,422 toward the Department for World Service (DWS). A further CHF 400,000 is planned for costs related to the LWF's governing bodies. The total amount foreseen for 2006 is CHF 13.2 million and CHF 13.5 million for 2007, which would result in a projected deficit of around CHF 600,000 and CHF 930,000 respectively. In the Treasurer's Report to the Council, Stoll had cautioned against falling back on the LWF's reserves to cover deficits, as this would clearly contradict the idea of sustainability.

USD 60.5 Million for LWF Programs and Projects in 2005

The Council also approved programs and projects amounting to USD 60.5 million to be carried out by the various LWF departments and offices in 2005. The total amount of USD 60,451,898 is based on the Summary of Needs (SON) for programs (B-budget) in the General Secretariat and its offices * OCS, OEA and OIAHR; and DMD - including mission, communication and development projects approved through the Project Committee; DTS and DWS, as well as the Lutheran Foundation for Inter-confessional Research in Strasbourg, France.

The breakdown for this figure includes USD 636,601 for OCS; USD 81,000 toward OEA work and USD 156,150 for OIAHR. An amount of USD 396,200 is planned for DTS programs; USD 3,499,850 for DMD; USD 52,497,672 for DWS, while USD 400,000 would go to the Lutheran Foundation for Inter-confessional Research in Strasbourg, France. The LWF Project Committee allocations to projects carried out by the member churches amount to USD 2,530,225.

The Council approved that the 2005 SON be forwarded to the member churches, national committees, related agencies and mission agencies, commending requests for support through undesignated and designated contributions.

As this year's was the first full meeting of the Council the programs' and projects' plan is based on an updated version of the programs and projects foreseen for 2005. From next year onward the LWF will have a "rolling" three-year SON which will be revised annually, Stoll explained.

Call for Strategic Planning Process for the LWF Secretariat

Concerning 2006-2007 projections, the committee underlined the urgency for the Council and Executive Committee to start planning what kind of LWF was needed and could be financed in the years ahead. In its action based on recommendations from the finance and administration committee, the Council called for a Strategic Planning Process with the objective of producing a strategic plan for the LWF secretariat.

The Council proposed that such a process consider where the work could and should be undertaken * at the level of member churches, secretariat or with the World Council of Churches, for example. Also to be considered is the issue of translation and interpretation costs; spacing of the Council meetings; LWF secretariat location, and decentralization; and what should be discontinued because of the limited resources.

The President, Treasurer and General Secretary were asked to develop Terms of Reference for the Strategic Planning Process. The LWF General Secretary was encouraged to consult with the member churches on the possibility of seconding a consultant to assist with the planning function; and on seeking the support of a study group for specific aspects of the process. The LWF General Secretary, Rev. Dr Ishmael Noko will present an interim report to the Executive Committee in February 2005 and a full proposal to the Council in 2005.

Council Proposes Budget Frame for 11th Assembly

Concerning fees for the 11th Assembly of the LWF, the committee expressed concern about the sustainability of an Assembly as expensive as the Winnipeg one in 2003, where the costs for the LWF was around USD 2.5 million. It proposed a budget frame of USD 2.3 million for the next assembly, which based on the fair membership fee criterion, would put the actual Assembly fees at USD 1.95 million. Member churches were thus encouraged to start paying the assembly fees, while the Council was asked to find other ways to reduce costs so as not exceed the budget.

In view of the probable restructuring discussion within the LWF and the current financial situation, which were discussed in the Treasurer's Report, the Council agreed that a short Council meeting be held in 2006.

Slow but Steady Progress of LWF Endowment Fund

According to the finance and administration committee the LWF Foundation * Endowment Fund had an mount of CHF 7.8 million including pledges by the end of 2003. Although its development had been slower than expected, it had been steady. The goal of CHF 10 million for 2004 may not be attainable as projected, but was feasible in the near future, the committee noted. The fund was established in 1996 with the aim to supplement financial support for the LWF's work through investment of income received on its capital.

At its March 2004 meeting in Geneva, the Board of the LWF Foundation - Endowment Fund allocated the annual net earnings of CHF 190,439 accrued by end of 2003 to DMD, DTS, OCS and OEA. In its report to the Council, the committee noted with appreciation the efforts by some of the member churches toward adjusting to the level of fair membership fees. It however raised the concern that some big churches were not yet paying what they could.

Business Plan for Augusta Victoria Hospital

The committee informed the Council that it had received a DWS report about the difficult political and financial situation of the LWF-run Augusta Victoria Hospital (AVH) in East Jerusalem. The Council thus requested DWS to prepare a business plan for the hospital, to be received before the 2005 Council meeting.

The current unstable political situation in that region poses a major operating and financial challenge for the AVH, the main health institution serving Palestinians in the West Bank. These include the financial stability of the Palestinian Authority becoming a more apparent issue, the continued construction of the so-called "separation wall" which is increasingly diminishing access by Palestinians (both patients and staff) to the hospital, and the pending court case with Israel regarding a tax exemption agreement between the LWF and Israeli Foreign Ministry.

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