The truth about World Relief and Human Care’s stewardship
Earlier today, Jesus First (the political arm that supports President Kieschnick) sent its ninth letter (yes, ninth!) to delegates to the LCMS convention. First off, let’s take a moment to sympathize with these poor delegates who probably can’t begin to read through all the material they’ve been sent from any number of different organizations.
Well, the letter was a doozie. It basically accused the World Relief and Human Care board and its executive director Rev. Matthew C. Harrison of gross financial mismanagement. It used a flurry of numbers and charts and graphs and it looked like the staff of World Relief and Human Care — one of the boards about which all Lutherans had been so proud — had been throwing a financial mismanagement party for years. It looked horrible.
Thankfully, it turns out that JesusFirst in general and the bylined author of the piece in question (the Rev. Jon Coyne) were woefully misinformed. A few hours after the Jesus First letter had been sent out, the board had issued a very calm, reasoned response. Board Chairman Bernie Seter said, “For the sake of our work of mercy and those in need around the world, and to provide reassurance to our donors, it is necessary to respond to the Jesus First Delegate Letter No. 9. As chairman of the Board for Human Care, I have requested our board Vice Chair, John Edson (a Certified Public Accountant), to prepare a response.”
CPA Edson gently explains how people who are unfamiliar with accounting can make mistakes and he charitably corrects the errors in the Jesus First letter. If I had been on the board that had just been attacked, I would not have responded so kindly. It is to their credit that they didn’t question JesusFirst’s motivations — simply rebutting the errors with facts. You can read the whole letter here (warning: .pdf) — and I encourage you to do so.
The main point of the JesusFirst letter was to accuse the Board for World Relief and Human Care of spending the bulk of every dollar earned on overhead. CPA Edson explains that this accusation is incorrect:
Over the past 8 years (2003 through 2010), WR-HC has been responsible for expenditures totaling $108,458,610 (through May 2010). Of this, $14,200,077 has been given to support ministry areas within the Synod, and $67,164,394 has been granted to others. This total of $81,364,471 has funded the programs and mission of WR-HC. During this same 8-year period, administrative, fundraising, and communications costs have totaled $27,094,140.
In each of WR-HC’s monthly financial statements prepared by the Synod’s accounting department, a comparison is made to the benchmarks established by the Charities Review Council and the Better Business Bureau. Each of these agencies has established a maximum benchmark as to the amount of administrative, fundraising, and communications costs that a good charitable organization should maintain. The Charities Review Council benchmark is 30% of total expenditures, and the Better Business Bureau is 35% of total expenditures. The 8-year history for WR-HC is 24.9% for overhead expenditures. 75% of donor dollars go to the mission and programs of WR-HC. To our knowledge, WR-HC is the only department in Synod that compares itself to these nationally established benchmarks.
As Barbie says, “Math is hard.” Actually, CPA Edson proved that accountants can be funny with this line in the letter:
I will make a promise to the author of that article: I won’t try to preach if he doesn’t try to do accounting!
Anyway, JesusFirst had also compared WR-HC to Lutheran World Relief, saying that LWR was a more efficient organization. I don’t know why they did that, but their comparison was also based on faulty information. For instance, some 30 percent of LWR income is through “in-kind” contributions. These are things like quilts or other material goods that individuals might donate to an organization. World Relief and Human Care follows accounting rules that do not permit it to count such “in-kind” contributions. So JesusFirst accidentally compared two totally different financial statements.
There are other important facts — JesusFirst tried to blame World Relief and Human Care for some of the notorious problems another board has had managing its budget. CPA Edson points out that World Relief and Human Care lends money interest-free to other synod entities and has also seen its own subsidy from unrestricted synod funds go from $800,000 in 2001 to nothing by 2006.
There’s much more in the letter — but it’s important to read.
I know that Kieschnick supporters are worried about Harrison’s momentum and his nomination totals. It’s totally understandable. But it’s important that we do our best to speak well of our neighbor and get our facts right. This isn’t just about a presidential election — this could seriously harm donor confidence in one of the shining programs of our church body. People around the world rely on our mercy arm. That’s vastly more important than politics and it’s something that we should all support as brothers in Christ.
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