by Reid Hester, Finance Committee and Stewardship Chair
The best of times and the worst of times. We’re experiencing challenges in 2020 that are bringing our church community together in new and innovative ways, and those same challenges are straining our day-to-day finances quite considerably. Here’s the good news, our church rests on a very solid financial foundation, and the leadership of the church has taken a number of steps to strengthen that foundation even further.
For those who attended the congregational meeting on April 5th, you will know that we applied for federal support via the Payroll Protection Program. As of this posting to the Heirloom, we do not yet have final word from our contacts at Fifth Third Bank on whether we’ve been approved. We are continuing to be asked for supporting documentation, so we’re taking that as a good sign that we might still receive funds via this program. Any loan amount received via this program will be converted into a grant if we use the funds to cover payroll and utility expenses over the three months that follow the receipt of the funds.
The Finance Committee made the decision in early April to redeem funds that were invested in the Dodge & Cox Balanced Fund and the Vanguard STAR Fund. We did see a decline in the value of our investments, but we missed the market lows at the time of our withdrawal. These investments returned substantial gains over many years, and they had gotten far out of balance. We were planning to rebalance our investments in the weeks prior to the onslaught of Covid-related market gyrations, and the extreme volatility of the markets over the course of late March and early April added considerable urgency to our decision-making process. We redeemed about $17,000 from Vanguard STAR and $52,000 from Dodge & Cox. We had also redeemed $15,000 in funds from Dodge & Cox earlier in March. We do expect to leave a considerable buffer in our primary church checking account, as commitments on our church balance sheet already lay claim to a share of these funds of roughly $30,000. We are in the process of writing a new investment policy and expect to re-invest accordingly when the markets settle down.
Our Endowment Fund exists separately from all of the funds discussed above. It has its own investment policy and will stay invested in the markets. The policy associated with the Endowment Fund states that we cannot draw any funds from the Endowment into the operations of the church until it has reached a balance of at least $100,000. It is currently at a balance of about $40,000.
Now, back to our day-to-day finances. From a pledge and other income standpoint, we had received about 73% of budgeted income at the end of March, which was 75% of the way through the fiscal year, so we came into the Coronavirus crisis running just a bit behind on income but looking pretty good. The final quarter of our fiscal year will be more challenging given that rentals and fund-raising make up a substantial portion of our budgeted income. Both of these activities are at a standstill through the end of this current fiscal year on June 30. It is very likely that we will end our 2019-2020 fiscal year with a deficit.
The pledge drive for our 2020-2021 fiscal year could not be occurring in a more challenging financial environment for our members and friends. I want to thank all those who have pledged their support to the church for next fiscal year. We seem to be tracking towards a total amount of pledge income of approximately $200,000, but we could come in below or above this number when all pledges are in. And it is very difficult to say when we will be able to re-open the church to resume rental and fund-raising operations. So devising a budget for 2020-2021 will be challenging. If you have questions or suggestions for how we might approach our budgeting process for the fiscal year that will run from July 1, 2020 through June 30, 2021, please reach out and let me know.
Jenn and I started attending Heritage in 2005, and we became members in 2006. We have seen the church through some pretty challenging times, and there is no doubt that significant challenges confronted this church many times before we came along. We’ll get through this too, and we’ll support each other all along the way. After all, love is the spirit of this church.
Finance Committee and Stewardship Chair