(Brooke’s generosity Blog)
February 10, 2019
Last week’s insert summarized the Knox operating fund deficit, and how it has accumulated. An unanticipated deficit in 2018 resulted in a deficit of $87,056 for 2018.
This resulted in an accumulated ‘operating’ fund deficit of $293,771. This is $43,771 higher than our ability to handle.
There is considerable good news in our capital givings. First some definitions:
Operating Fund:Refers to all funds available to pay for staff, building operations (light, heat, cleaning) and mission funds such as Presbyterians Sharing and compulsory assessments to assist other missions beyond our walls.
Capital Funds: is for all long-term property matters and investments. These funds are used to reduce debt, are invested in our Living Legacy Fund, or liability funds, and are not available for operating costs. Givings to the “Brightening Our Future” campaign are capital contributions that immediately reduce our property debt.
In 2017: Knox Waterloo significantly reduced debt. There were payments of principal on mortgage, a Presbytery one time grant of $99,099, “Brightening Our Future” contributions of $207,866, all of which came together to reduce our capital debt by $405,244.
(It should be noted that a portion of the debt retirement came from operating fund contributions to the principal portion of the mortgage payment.)
In 2018: The good news on capital contributions continued.
Brightening Our Future Campaign contributions totaled $266,474 in 2018. All of this went directly against the debt. Together with our monthly principal payments from our operating fund, we contributed $367,269 to reduce debt in 2018.
The Knox overall Balance Sheet is increased by the amount of $280,213! (capital increase $367,269 less operating deficit 87,056 is $280,213)
This can get confusing.
At the end of 2019 we expect $300,000 – plus will be applied against our property debt. When we do this, we decrease our interest costs, and relieve pressure on our operating fund.
This will not help us retire the $293,771 in accumulated operating deficits.
We are using our best efforts to manage finances faithfully. Our operating deficit has grown to an unmanageable level.
To achieve a balanced budget, two things need to happen.
- Increased donations to operating core ministries including mission and staff costs.
- In order to retire a portion of our accumulated deficit, it would be prudent to plan for staff reductions. (There is no other place for savings.)
We request your prayers as the leadership of this congregation grapples with these issues. We remain in God’s good hands. Always.