Treasurer’s 2021 Constituency Report


Pacific Union Finances Continue to Demonstrate God’s Blessings

When I think about all the ways that giving in the Pacific Union Conference could have been negatively impacted during the recent coronavirus pandemic, it is obvious to me that the Lord is in control. We have been living through a worldwide health crisis with great uncertainties, and yet we continue to see God’s faithfulness displayed through the giving of His family.

Time and time again, I am awestruck as to how good God is while I’m concerned to balance budgets. I see how God quietly and sometimes dramatically reveals His goodness through the gifts provided by each one of you. Thank you for your faithfulness, O Lord, and thank you for your gifts, church family. This consistent giving has meant that we have been able to fund the various ministries dedicated to sharing the gospel and supporting members as we all follow the theme of this constituency session, “So Send I You.”

Because the Lord has blessed so abundantly, we have been hard at work in the treasury department. Before I share with you the good financial news, I want to express my gratitude to the former treasurer, Theodore R. Benson, for prayerfully listening to the Lord and following His leading. Much of what will be reported is due to Ted’s ability to expertly follow the Lord’s leading with wisdom and compassion. Ted was a true friend to all and a beloved mentor to me.

Tithe giving
Tithe is main source of income that funds the ministries of the Pacific Union. Total tithe during the past five years was $924M, which is an increase of $80M over the previous five years ($844M). Tithe growth has averaged 1.1% annually over the last 10 years. During 2018, the Pacific Union experienced the highest giving ever recorded, with over $189M given in a single year, a 5.25% increase. Additionally, while 2020 (due to the pandemic) was forecast to see tithe reduced anywhere from 5 to 15%, miraculously the Pacific Union experienced a tithe gain of .08% over the previous year. Again, we see more examples of God’s abundant blessings!

Tithe retained at the local conference increased
Through working together and increases from other fields, the amount of tithe passed up to the General Conference and North American Division has steadily been decreasing. Over the past five years, the amount has decreased from 16.0% in 2016 to 15.0% in 2020. Additionally, beginning in January 2021, an additional 2% of tithe will be reduced from the amount being sent over the next four years. I’m so pleased that more funding will be available for local operations. I know this has helped further the work in the local fields.

Mission giving
Mission offerings continue to trend downward. While tithe has trended higher, giving for oversees mission work has declined $3.7M over the past five years. Mission funds this past five years was $14.8M compared to $18.4M in the previous five years. There does, however, seem to be a trend moving to specific giving for specific mission projects. Unfortunately, that is not tracked at the union level, so I’m unable to give specific numbers.

Tithe utilization
Tithe, along with restricted income from various entities, is utilized to fulfill the mission and is generally broken down into two main areas. The following is a breakdown of how the funds were spent in the last five years by category: Program Services
Education 19% $23.9M
Evangelism 4% $5.4M
Appropriations 43% $54.7M
Auditing 2% $2.3M
Capital reversion 4% $5.3M
Missions 4% $4.8M
Religious liberty 3% $3.6M
Recorder 3% $4.4M

Support Services
Administration 6% $10.9M
Retirement DB plan 7% $12.0M
100% $127.5M

Special use funds
The Pacific Union has five main special use funds to support the work within our territory outside of the Tithe (Operating) Fund, Current Fund, and Plant Fund.

1) Evangelism Endowment Fund – This fund (started in 1990s with the proceeds of a matured trust and an allocation of $800,000 from other funds) has been the engine that has driven the Creative Evangelism Fund. As of December 2020, the fund has grown to $16.1M, while releasing 6% of the net asset annually for local church/conference-based evangelism projects. In 2020 we reached a milestone, providing $1M for the first time for projects to be allocated in 2021. Praise the Lord!

2) Education Endowment Fund – This fund was greatly enhanced in 1998 and, along with the Evangelism Endowment Fund, began receiving proceeds of the newly wholly-owned Church and School Loan Fund. The allocation to each Endowment of 40% of the earnings, along with prudent asset management and the Lord’s blessing, has grown the Education Endowment Fund from $2.3M in 1998 to $15M as of December 2020. This fund also releases 6% of the net assets for various educational scholarships, with a record $814K provided in 2020. I am so thankful for those who came before me who have provided this fund for the education work of His mission.

3) Church and School Loan Fund and Income Fund – The loan funds of the Pacific Union are critical to keeping capital available for new church purchases, renovations, expansions, and emergency repairs. Additionally, the Income Fund provides a safe deposit option for our entities that want additional income while still helping other Adventist entities that need loans. These two funds provided loans to roughly 225 entities, with a combined loan balance outstanding of $110M.When I look back at the year 1995, there were loans to 224 entities, but the balance was only $35M. How times change!

4) Economic Recovery and Emergency Fund (Contingency Fund) – This fund too was created as a way to plan for the future. This fund was established to provide safety net access to capital and liquidity as needed for our Pacific Union entities. Lines of Credit have been established with most entities as cashflow security so that operating costs and payroll can be covered in cases of liquidity needs. This fund has been a blessing over and over again through the years! Praise God for the foresight to provide for this need.

5) California Workers Compensation Self-Insured Fund – In 2016 this fund was brought in under the Pacific Union Conference. It had been a stand-alone fund, backed by the Pacific Union but held as separate assets. By bringing this fund inside the Pacific Union, we have been able to reduce costs substantially and further improve the fund, benefiting the California Conferences and employees covered by the fund. The fund has done so well in reducing injuries, death, and claims costs that in 2020 conferences were able to cut contribution costs by a collective $1M. Additionally, in 2015 the fund began a reinvestment campaign to proactively invest in preventative safety enhancement that has now allocated $6.2M back to California entities as grants. I can only imagine how many injuries have been prevented to our most valuable assets, our employees. Again, I thank the Lord for His goodness!

In conclusion, I would like to add my voice in support of not only the theme of this constituency session but also our union objective summarized in the words “Love. Serve. Lead.” As we contemplate the work of the Good Shepherd and His invitation to work with Him, I am reminded of Jesus words in John 10:9. “I am the gate; whoever enters through me will be saved. They will come in and go out, and find pasture” (NIV). May that be true for every one of us!

While much of this report has concerned numbers and financial reporting, all this is only important as we serve the needs of the church and those who need to find Jesus. To this end your treasury staff commit themselves in humble support.