The budget supports the departments of World Mission; Compassion, Mercy, and Justice; Church Growth and Evangelism; Christian Formation; Ordered Ministry; Communication; and General Administration; as well as North Park University and North Park Theological Seminary.
“We remain thankful for the faithful support of local Covenant Churches,” Lundgren said.
Giving decreased by 2.9 percent – the first decline since Lundgren started 16 years ago. In response, departments cut expenses to end at 1.7 percent below budget and just 0.6 percent above 2006. Expense increases since 2000 have averaged 2.7 percent per year.
Still the denomination ran a deficit in 2007 of $533,000, Lundgren said. He added that if giving had been up 2.9 percent instead of down by 2.9 percent, that deficit would have been reduced to $33,000. The accumulated operating deficit is approaching $1 million.
Lundgren said the denomination is developing a Strategic Financial Plan in response to the continued decline. The primary focus will be on generating resources that will enable moving together in common ministry.
Still, there was plenty of good news to report, Lundgren said:
• The Covenant Board of Pensions and Benefits approved a “medical premium holiday,” for June, which saved churches a collective $800,000. In March, Lundgren said the move was made possible by three key developments: better-than-expected financial results, outstanding work on the part of Covenant Director of Finance Elliott Johnson in competitively pricing and repositioning medical and dental coverages with new providers, and the impact of negotiated provider discounts and administrative cost savings achieved by working with other church denominations. Collectively, more than 250,000 lives are represented.
• The pension plan grew by $10.5 million (6.9 percent) to $163 million. The plan covers 1,000 active pastors and missionaries. There are 353 retirees and 140 surviving spouses receiving monthly payments. Over the last 21 years, the pension fund has averaged a 9.4 percent annual return.
• Bethany Benefit medical rate increases have remained at roughly 5 percent per year. That is far below the average increase of other group health plans, which Lundgren said have risen more than 15 percent each year. The difference amounts to roughly $5 million in savings for Covenanters.
• Excluding more than $2 million contributed to tsunami and hurricane relief, denomination members have contributed $5.8 million – or more than $1.5 million per year – to Covenant World Relief. He noted that operating expenses for Covenant World Relief are roughly four percent, “well below that of basically all comparable relief organizations.”
• Paul Carlson Partnership has raised $5.1 million over the last four years to address health, poverty, and education in Africa.
• Total assets under management by the Covenant – including Covenant Retirement Communities, Covenant Trust Company, Swedish Covenant Hospital, Emanuel Medical Center – exceed $2.5 billion. More than 5,000 employees serve in Covenant ministries and institutions.
Auditors from the accounting firm of Deloitte & Touche again gave the Covenant a “clean audit opinion.”
By not distributing individual paper copies of the audit to delegates since 1995, the denomination has saved the printing of 4.2 million pages, Lundgren noted.
