Update from Finance & Planning

April income falls below projections

By Ronald Kelly

Each year as we plan our income and expenses, we project various sources of income on a monthly basis. I have mentioned before that this forecasting process is more art than science. For example, a certain percentage of our income is estate donations. Obviously it is not possible to foresee how many estates will close in a given period of time, so we estimate.

When it comes to projecting member donations, we try to carefully weigh cautious optimism against undue pessimism. An example of cautious optimism would be to project monthly income to exceed that of the previous year. On the other hand, undue pessimism would lead us to project donations at a substantial decrease, and we don’t like to do that.

So, we do our best to come up with figures that will help us in planning, but not discourage us if the rate of income is less than expected. Obviously if income is more than we projected, we are pleased. That was the case in January and February.

However, donation income in April was just over $1.3 million, down about $400,000 from our projections of about $1.7 million. Certainly that is not small change, and we hope that May and June will pick up some of the deficit.

In the meantime, we continue to sustain bank balances that exceed projections. This is a result of selling parcels of land that will not be included in the proposed development project and the litigation settlement we mentioned last month.

Thus, in spite of the decrease in contribution income, the financial position of the church at this time continues to be stable and sufficient for our current needs. The year-to-date total income actually exceeds our projections by more than 10 percent, and we have been able to add more than $3 million to the reserve fund between January and April. Total cash inflow for the year so far is just over $14 million.

Of course if donation income continues to decrease, we will use the reserve fund for operating capital during the second half of the year. We would far rather keep the reserve fund bolstered, but in order to maintain current operations, we will have to use reserves if contributions do not meet projections.

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