Net Assets of the General Board of Global Ministries

The mission agency ended 1997 with net assets of $384,971,328, an impressive number that represents the generous giving of United Methodists over the past century. What is important is the manner in which these assets must be classified, and the availability of those funds for mission.

The classifications for the assets must be consistent with rules implemented in 1995 by the Financial Accounting Standards Board (FASB). These rules apply to all non-profit agencies.

Permanently Restricted Funds

The first FASB classification is Permanently Restricted Funds, or what we historically have called endowments.

Permanently Restricted Funds represent $96,046,222 of the Board's assets.

The category includes, among other funds, endowments and trusts by gifts and by bequests to mission from more than 1,700 individuals over the history of Methodism. All of these funds are restricted by law, and the principal must be maintained in perpetuity with the income used exactly as specified by the donor. The proceeds are used to support some of the finest ministries in the world. For example, GBGM holds $5,266,000 in what are called "China Funds". When the Board could not use these funds in mainland China they were held awaiting the reopening of China. Today, the interest earned is used to support China projects which are primarily education and evangelism programs. These are having an astounding impact in bringing Christianity back to China.

Temporarily Restricted Funds

The second net asset reporting category required by FASB is Temporarily Restricted Funds, which amount to $119,195,990

This category includes giving programs familiar to United Methodists, such as Advance Special giving, which represents local church and individual giving over and above the World Service apportionment. One hundred percent of the funds collected through the Advance are spent on the projects for which they are donated.

Also included in this category is Supplemental Giving by United Methodist Women.

$19,815,038 of the Temporarily Restricted Funds are held by the United Methodist Committee on Relief (UMCOR). These funds are used to respond to emergencies around the world. When disaster strikes, UMCOR immediately starts spending substantial amounts of money to respond, even before any special church wide offering to support the relief work is taken. The hope is that the funds will be replaced. This fund also is used to fully support any Advance Special endorsed by UMCOR if the donations fall short.

Unrestricted Funds

The final FASB reporting category is Unrestricted Funds, which amounts to $169,729,116.

Included in this category is Unrealized Capital Gains. The term "unrealized capital gains", which may be unfamiliar to some people, refers to capital appreciation on investments that has not been realized, (i.e., the stock is worth more than you paid for it and you haven't sold the stock yet so you haven't yet taken the gain in its value). FASB rules require that unrealized gains be treated as Income and included in Net Assets.

As of Dec. 31, 1997, $52,878,705 of the Board's net assets were in Unrealized Capital Gains.

In 1996-1997, the Board leadership recognized that the Board's investments had participated in the excellent investment markets and decided to realize up to $23,000,000 of the Unrealized Capital Gains to help the unfunded health benefit program of our missionaries and to create the Millennium Fund for Mission. The Millennium Fund will rebuild damaged church infrastructure in Africa, Eastern Europe, and the inner cities of the United States. GBGM had not historically been able to finance these needs.

In 1997, monitoring of the investments continued and the Board committed an additional $25 million of Unrealized Capital Gains to several categories of ministry for 1998 and 1999. These ministries will extend the evangelistic reach of the church in new and exciting ways through a "Missioners of Hope" program for Africa, the "Bishop Handy Young Adult Missioners" program, and an "Innovative Mission Volunteers" program.

$55,328,294 of unrestricted funds are held by United Methodist Women and utilized to support ministries with women, children and youth. Of this total, $26,831,617 has been designated by policy or by the Women's Division itself for specific usage. This amount also includes the valuation of property owned by the Women's Division and funds for maintenance and repair. The Women's Division systematically utilizes its investment funds responding to new mission needs and programming for United Methodist Women.

$40,494,271 represents over-funding of the pension programs for retired missionaries and deaconesses as a result of investment performance . These pension funds are a defined benefit based on a rate of $325 per service year. This liability will increase as the service year rate goes up and will use the over-funding. These are pension plans of the Women's Division and the former World Division.

That leaves $92,453,661 unrestricted funds available to the parent organization, GBGM. $69,385,922 of this amount has already been designated by the GBGM Board of Directors for programs around the world. These programs, which usually are multiple-year, include items such as pastor salaries in the former Soviet Union, support for African ministries, and new congregations in Puerto Rico.

In the final analysis, approximately $23,000,000 is available for emergencies that frequently occur, such as when missionary personnel must be quickly moved out of a trouble spot. This happened in August 1998 when GBGM had to move missionaries out of the Congo due to hostilities in that country. Another major need for available funds is for cash flow, which always is a substantial problem for GBGM because the majority of any general church agency's income is usually received in the final quarter of the year.

Conclusion

United Methodists through GBGM enable the mission of the church in more than 130 countries supporting or partially supporting thousands of ministries where emergency situations can and do occur.

There is an urgency and enormity to the church's call to faithful partnership in God's mission, which is reflected in the manner in which the General Board of Global Ministries uses the funds donated by members of our local churches to witness to God's presence on Earth.