It is a good idea for an individual— or a family, or the Church—to pause and reflect from time to time. Where have we been? Where are we going? What have we accomplished? What do we want to accomplish?
Each year, the Living Church of God voluntarily undergoes an independent audit by an outside auditing firm, which helps us take a careful, objective look at our business practices and methods, and our accounting procedures. We find this a valuable exercise for the Church, for a variety of reasons. This year, we once again asked the firm of Cherry, Bekaert & Holland of Charlotte to perform our audit. For 2007, the auditors paid particular attention to our policies and procedures, to ensure that we are compliant with Sarbanes- Oxley legislation affecting non-profit organizations. A copy of the audit is reproduced on the following pages, along with three charts to help illustrate key facts and figures.
On the whole, 2007 was a very good year for the Living Church of God, and this was reflected in our finances. We budgeted for a 5.5 percent increase in income, and planned our expenditures accordingly—yet the actual increase came to 6.9 percent!
Operating within a budget requires strong self-discipline, since there are always new opportunities for expenses. Television stations and networks continually become available for the Tomorrow's World telecast, and we are always eager to increase our coverage, but we need to select stations based on available finances.
Another major factor in our expenses has been the increased cost of mailing, due to changes in U.S. Postal Service rates and regulations, and to the rising expense of international mailing. We are constantly looking for ways to reduce our costs for mailing domestically and internationally. The Internet provides an invaluable means for distributing material all around the world without postage costs, and we are finding more and more opportunities to use this powerful tool. For example, the Tomorrow's World Bible Study Course online is now going to more than 4,500 people in 93 countries as this is being written—with more being added every week.
Even so, postal mailings are still proving fruitful. A series of specially targeted mailings to Tomorrow's World subscribers has been very successful. Four special mailings have been done to date, and more than 65,000 booklets have been distributed to subscribers responding to the letters. More mailings are being planned as hot topics emerge on the world scene.
Living University was launched in 2007, offering biblical education to hundreds of students around the world, who are taking advantage of the opportunity to "attend" classes online. As we expand the university's course offerings, we look forward to serving more students, which should magnify the positive impact of this cyber-university. Although the university serves students of all ages, we hope that it will increasingly meet the needs of the Church's college-age members.
As many of you may know, the United States government has mandated a move to all-digital television, effective as of February 2009. For the Church's audiovisual efforts, this means a major effort to adjust to the new requirements. We are in the process of replacing most of our television production equipment to prepare for digital production. Part of this cost will be paid out of current revenues, and part of it will be financed.
One important part of the adjustment is our acquisition of a new building, two doors down the street from our Headquarters building. The building has 5,000 square feet of space, and will house our television production facilities. The way this building became available to us is a sign of God's inspiration, opening a door to facilitate His work. It became available at just the time we needed to upgrade our studio space, and it is wonderfully suited for our needs. Its 16-foot ceilings offer excellent facility for a television studio in a 40x60-foot room that is heated and cooled. The rest of the building is laid out with offices that will be occupied by various staff working in the audiovisual area. Some remodeling will be required, but overall it is basically "ready to go" once our new equipment is acquired and the new television studio set is installed.
Moving our television production to this new facility will free a number of offices in the Headquarters building, and will make available approximately 2,000 square feet of space occupied by the current studio. With this space, we can expand our Headquarters meeting room, allowing us to seat about 100 more people for Sabbath services and other Church functions.
Because the Church finished 2007 with a surplus of $163,903, funds were available to allow the Church to afford a down payment on the new building. Truly, God made possible this wonderful new development for His Work!
Where did that surplus come from? In one sense, it came about because of careful stewardship. Ultimately, of course, it came from the tithes and offerings of our members, and a growing cadre of co-workers and donors. While the Church occasionally receives large donations—which are greatly appreciated—the mainstay of the Church's income to do the Work is the "widow's mite" received in the form of many small donations. As you will see in Figure 1, 81 percent of the Church's income in 2007 came from tithes and offerings. Another 17.5 percent came from Holy Day offerings. Investment and other sources accounted for 1.4 percent of 2007 income.
As you will see in Figure 2, more than 78 percent of the Church's income in 2007 came from members. Another 5 percent came from prospective members, and 0.7 percent from Church youth. About 16 percent of the Church's income in 2007 came from donors and co-workers.
Those donations allow us to preach the Gospel and to feed the flock. The field ministry works very hard to feed the brethren God has called. In 2008 and 2009, we plan to transfer some ministers, as well as to hire some ministers, to better serve the brethren and balance the workload of the field ministry.
As you will see from Figure 3, in 2007 the Church spent just under 47 percent of its income to "feed the flock," and just over 46 percent to preach the Gospel. Just over 7 percent went to administrative support services.
In these troubled economic times, it is vital that we prepare for the inevitable "rainy day." For this reason, the Church maintains a strategic reserve, most of which is "liquid" (cash), but with about 30 percent invested conservatively in precious metals and natural resources, so the Work can balance its risk in the face of economic turmoil in the nation and around the world.
Other areas where we are planning ahead include the Festival Office, where plans are underway for 2009 and 2010. With our scattered membership, it is difficult to please everyone, but we strive to find Feast sites in locations that are both lovely and convenient. This of course affects brethren's individual budgets and also the budget of the Work. We do not like to ask brethren to travel longer distances and to spend more on travel, but we need to balance many factors to reach the best outcome for the largest number of brethren. Careful site selection and Festival Office budgeting also let us serve the maximum number of brethren in need as possible; in 2007 we were able to provide assistance to more than 200 people—thanks in large part to members who sent in their "tithe of the tithe" and excess Festival tithe. In 2007, the Church spent $886,975 from its Third Tithe Fund to help those in need, particularly widows, orphans and "strangers" or newcomers.
The Church in the United States continues to support the International offices around the world to the extent we can. New laws in the United States require funds to be distributed under a grant process imposed by the Patriot Act, which slows down the process considerably and increases the paper work—but as good citizens we are complying with these regulations.
Brethren, thank you for your loyal, generous support of the Work of God. The Church could not carry out its mission—to preach the Gospel of the soon-coming Kingdom of God and to "feed the flock" God has called—without the combined, dedicated efforts of all its members, including your tithes, offerings and prayers. May God continue to bless all who are involved in accomplishing His will and His Work!