BSC Board faces $3M budget shortfall
    February 4 2019 by Chad Austin, BSC Communications

    Despite experiencing a budget shortfall in 2018 that was called “significant,” Baptist State Convention of North Carolina (BSC) officials are optimistic about the long-term financial outlook for 2019 while cautioning that adjustments will need to be made to the budget that will be proposed for 2020.

    While receipts were more than $3.3 million or 10.85 percent below the $31 million Cooperative Program (CP) budget for 2018, BSC Executive Leader for Business Services John Butler told the state convention’s board of directors Jan. 29 the overall financial picture includes a few “bright spots.”
    One of those bright spots was giving to the North Carolina Missions Offering (NCMO), which exceeded its $2.1 million goal by nearly $26,000. NCMO supports a variety of ministries such as church planting, missions projects and the 18 different ministries of Baptists on Mission (also known as N.C. Baptist Men), which includes disaster relief.
    Butler attributed the budget shortfall to several factors that included the impact of Hurricane Florence as well as some accounting guidelines that govern the state convention.

    Impact of Florence

    In the aftermath of Hurricane Florence that caused widespread damage in eastern North Carolina last September, the BSC received more than $6 million in designated giving for disaster relief.
    Butler said it is not unusual for churches to reallocate some missions dollars to disaster relief following major storms like Florence.
    “The reality is that churches often adjust their missions budgets following natural disasters, moving funds planned for Cooperative Program (CP) support to meet the immediate needs in their communities and our state, and that’s OK,” Butler said.
    “Giving to disaster relief enables us to help churches and individuals in crisis, opening the door for gospel conversations that often result in decisions for Christ. That’s an eternal impact that cannot be measured in dollars and is in keeping with our strategy of impacting lostness all over North Carolina.”
    Hurricane Florence also impacted CP giving because many churches were not able to gather for worship for, in some cases, stretches of several weeks due to damage to their facilities, Butler said. The budgets of hundreds of N.C. Baptist churches were devastated by the storm, and those churches must rightfully take care of their immediate needs, he added.
    Additionally, the N.C. Baptist Assembly at Fort Caswell experienced more than a quarter of a million dollars in lost revenue due to closures and canceled events in the wake of Hurricane Florence. With the loss of revenue plus unplanned costs of extensive repairs, the facility ended 2018 with a slight operating loss.

    Timing a factor

    Butler said timing and a lack of an uptick in end-of-year giving also impacted the final 2018 balance sheet.
    The convention began 2018 behind budget because BSC bylaws stipulate that income received for five business days following the last Sunday of the year must be credited to the previous year’s totals. Since Dec. 31, 2017, fell on Sunday, all income received until Mon., Jan. 8, 2018, was applied to 2017.
    “We started the year behind and never really caught up as the year went on,” Butler said.
    He believed some of the shortfall would be made up in December when end-of-year giving generally increases. However, the December giving bump did not come in 2018.
    “I’ve never seen that in my 12-plus years at the convention,” Butler said.  “Fortunately, it was just a delayed bump, as those gifts we normally receive the last week of December ended up hitting our books the first week of January 2019. In fact, we had the largest first week of receipts in our history.”
    The budget shortfall was softened somewhat by the fact that the state convention’s CP budget is allocated on a percentage basis, but Butler still described the budget deficits that BSC ministries had to absorb as “significant.”
    When removing the operational expenses for the BSC’s camps and conference centers at Caraway, Caswell and Truett, the state convention’s operations budget finished slightly in the black for 2018, Butler said. He praised state convention staff members for being good stewards of CP receipts, adding that BSC ministries operated at 90 percent of their budget allocations for most of 2018.

    Strong start to 2019

    As Butler noted, giving is strong so far in 2019.
    More than $1.4 million was received for CP the first full week of January, which is about two-and-a-half times the weekly budget requirements. In addition, the convention received nearly $2.8 million for the Lottie Moon Christmas Offering that ended 2018 more than $3 million below 2017 receipts.
    “Obviously one week can make a huge difference,” Butler said. “Whether it was due to the early snows in December or delayed mail processing, it is obvious that much of the giving we normally experience at the end of the year didn’t make it to us before we closed the books on 2018. That certainly gives us some much needed breathing room as we begin 2019.”

    Looking ahead

    Despite the strong start to 2019, Butler said convention leaders must not ignore the giving trends of 2018 and previous years when planning a budget proposal for 2020.
    “We can’t ignore what has taken place,” Butler said. “It would be foolish for us to plan a budget that disregards where we finished 2018.”
    Members of the Budget Committee will be on hand at the next regularly scheduled meeting of the BSC board of directors in May to hear comments, answer any questions and receive other input or feedback that board members may have about the budget process and the working budget proposal for 2020.
    The Budget Committee will meet following the May board meeting to receive budget requests from the institutions and agencies supported by the Cooperative Program budget.
    The committee will send a final 2020 budget recommendation to the BSC’s Executive Committee for consideration this summer before board members consider the recommended budget at their regularly scheduled meeting in September.
    Final approval of the 2020 budget proposal will be made by messengers attending this year’s BSC annual meeting in Greensboro on Nov. 11-12.

    ‘God will provide’

    Butler said state convention ministries, institutions and agencies should expect a reduction to their CP budget allocations for 2020.
    “Everyone will have to share in any cutback of the overall budget,” he said. “I don’t know what hurricanes may impact us this fall.
    “I don’t know what our economy will do. I don’t know what cultural shifts are coming. What I do know is that we serve a God who is faithful, and He will provide.”

    2/4/2019 2:10:46 PM by Chad Austin, BSC Communications | with 0 comments
    Filed under: budget shortfall, Cooperative Program

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