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A Question about Missions Funding

Tuesday, November 06, 2007

This post stems from a discussion on another site, but I would like to ask it here since I know that some missionaries and pastors read here that do not spend much time at the other site.

It is my understanding that the dollar has lost a lot of value in a number of places around the world lately and that this is making things especially tight on some missionaries, whose support comes mostly from U.S. churches.

In order to help in this situation, some comments have been made about raising the support for the missionaries to offset this, but the reality is that a number of churches are already struggling financially and cannot just give an across the board 18% raise to their missionaries - or they likely would have already done it.

Stemming from that concept, however, came this idea that I would like to hear some thoughts on. I am just thinking out loud here, so don't kill me, but I would definitely like some feedback.

As my regular readers are aware, our church is not in this type of situation yet, but I want to think ahead.

Here is the question:

Assuming all other factors are the same (in other words, giving is not changing), would it be better for a church to commit a set amount to a specific number of missionaries or for a church to commit a smaller amount with a flex amount that could be designated to help out special needs each year?

For instance:

Church A has 100,000 available for missions.

Is it better for Church A to commit $4,000 a year to 25 missionaries

or

Is it better for Church A to commit $4,000 a year to 20 missionaries
and use the extra $20,000 to help support whichever of those 20 missionaries have special needs during a particular year?

I would love to hear some feedback on this.

Just my question,

Frank

15 comments:

Chris Anderson said...

Frank,

I'll be anxious to read the feedback here. TCBC has determined (a) to support fewer missionaries for a greater amount, and (b) to reserve 10% of our missions budget in a "Contingency Fund." This is actually in our Constitution.

Per your question, the contingency fund has helped our missionaries a number of times with irregular expenses. We've helped obtain a new vehicle, meet an emergency travel need, purchase an airplane, help an under-supported missionary, give short-time support to a family replacing another who left mid-term, etc. And it also gives us a reasonable (not too large) "cushion." The last thing we want to do is under-support our missionaries.

It's been a great, great blessing to be able to send a gift of $500 or $2000 or $5000 to meet particular needs for which we didn't budget (per se), but which were particularly pressing. It's also been a blessing not to perpetually be taking "special" or "emergency" offerings, which we don't care to do.

Last thing: this has allowed us to help missionaries we don't support with one-time gifts, as well.

We wouldn't change it, and I'd encourage others to consider it. FWIW.

Jim Peet said...

Frank,

You have provided a sane and creative approach to this need!

Thanks

Don Johnson said...

In my opinion, it is quite difficult for sending churches to make 'hedge' accounts against inflation or currency exchange issues. Chris has mentioned his policy which includes a portion of the budget set aside for contingencies, but as he describes it, the contingencies seem to be emergency situations or one-off special projects funding. It doesn't appear that it is a contingency against currency fluctuation.

Currency fluctuation is extremely unpredictable, and it seems to me unreasonable to expect churches to somehow make provisions for these things.

Our mission's policy is that missionaries need to raise 110% of their budget before going to the field. (I think that figure is right, I am just talking off the top of my head.) The idea is to build into your support some contingency against currency fluctuation, inflation, and other emergencies.

No strategy is foolproof. Ultimately you have to trust the Lord with what you have. It usually seems to work out. Sometimes, however, situations like this can be the Lord's way of closing a door to ministry. We have to be willing to accept the Lord's providential leading in these matters.

Regards,
Don Johnson
Jer 33.3

Frank Sansone said...

Wow.

Some great thoughts so far.

Jim,

Be careful of using "sane" in connection with my name - it could get you in trouble. :).

Chris,

It sounds like you have already implemented close to the idea of which I am asking (and here, I thought I was being original). Do you use that fund for things like currency fluctuations as well as the examples you gave?

Don,

Is the 110% policy a required policy or a suggested policy? Do you know if it is common among other boards?

Please keep the comments coming. I have some additional thoughts and questions, but I need to go right now.

Frank

Chris Anderson said...

Frank,

I don't remember a time when we've used it for currency fluctuations, though we've used it more generally for someone under-supported.

One other thought on this issue: we've avoided taking on new missionaries if our current ones are under-supported. There was a recent time in which we could have taken on a new one, but opted instead to increase the support for an existing one. Those are hard decisions, but necessary, IMO. Anyway, that may become increasingly important with the currency issue at present.

Frank Sansone said...

Don,

If I understand your view, you would basically indicate that it should be the missionary rather than the church being concerned with the currency fluctuations.

Is this just due to the reality that many times churches won't think about the need?

Or is it due to the fact that missionary is more directly affected and would be therefore more likely to think through it and prepare for it?

Frank

Don Johnson said...

Hi Frank

Well, consider trying to keep track of 20 or more different currencies, all fluctuating at different rates for somewhat different reasons.

Just now driving home, I heard that the C$ hit 1.09 against the US$ briefly today. That is the highest it has ever been. Our support level has been dropping consistently as a result over the last few years, but the last six months has been the most dramatic I have ever seen.

So, yes, I would say that generally it is up to the missionary and his board to watch the fluctuations, but mostly the missionary. This is an area where it would be quite difficult for a local church to keep track for many missionaries in many different countries.

As for the 110%, I believe that is a requirement. I am anomally, in that I joined the board after having gone to the field. (I do everything backwards!) Our director once told me that I am an experiment that won't happen again. And I agree with him.

In my opinion, missionaries should not leave for the field undersupported, no matter how zealous they may be. Even when the missionary starts out at 110%, things change and most missionaries I know are always in the need of raising more support whenever they come back to the states. So those who go undersupported are really behind the eight ball after a few years on the field.

Regards,
Don Johnson
Jer 33.3

Jason said...

The Australian dollar has certainly caused some problems for missionaries here of late. One thing I've seen done is to support the missionary in the US equivalent of the foreign amount. So you check the web, convert to the US amount, and send a chq for that amount. It is a lot of effort for the church, but it does give the missionary a steady income. Another benefit is that while one missionary may be suffering, another may be making out like a bandit (let's not dwell on that concept!!). This method equalises the situation.

Just a thought. Not sure I'd do it. But it would work.

Don Johnson said...

Jason's suggestion has some merit, and would probably work well in stable countries like Australia, Canada, or Europe, and perhaps some others.

Some third world countries have other issues besides just exchange rates, however. For example, I know missionaries in South America who for a time would only convert their US$ to local currency when they needed to buy something because of runaway inflation. The issues can get quite complicated.

Jason's suggestion does have some merit and would work well in my particular situation, though!

Regards,
Don Johnson
Jer 33.3

Frank Sansone said...

Jason (and Don).

I am pretty ignorant about foreign currency (the part of one day in Tijuana in 3rd grade and two days in Ontario on my honeymoon are the only time I have been outside of the good ole U.S.A.). So these questions may be pretty dumb, but I am trying to think through this.

IF I understand what Jason is suggesting, the following is what you are suggesting:

If we took on the Johnson family for $500 a month Candian dollars, then this month, when the Canadian dollar is at $1.09 US dollars, we would send $545 US to BWM for Johnson's support. If the rate went down to $.80 US next month, we would only send $400 US to BWM?

Am I at least understanding that part correctly?

If so, how big of fluctuations normally occur? Is a 1.09 to .80 fluctuation something that could actually happen on occassion, or is the fluctuations usually a lot smaller? For example is the Candian dollar (or euro or yen, etc.) generally fairly steady against the US Dollar with only slight variations per month? Or is it typically up and down pretty drastically?

Also, if a church were to approach support from this way, would it make it more difficult for the missionaries since most other churches are probably doing it based on U.S. dollars?

Also, how often is the price adjusted? Is it a monthly thing (e.g. adjusted the first day of every month) or is it a quarterly thing - or is it a daily thing?

I know I am revealing my ignorance here, but I would appreciate your help here.

Thank you for your insights already.

Frank

Don Johnson said...

Hi Frank...

Is that an offer???

Seriously, currency exchanges are updated by the minute if not the second. The way you described support working would be correct, but you wouldn't have to monitor the rate every day, just look it up on the day you issued your support cheques (note Cdn spelling!). I don't think it would be a burden to the missionary as to his support, even if other churches were not operating that way.

However, the rates can change dramatically in a fairly short period of time. The C$ has been very stable against the US$, but there has been much fluctuation. About 1990 or so the C$ was about .86 of the US dollar. It dropped to almost .65 about 6 years ago, stayed there for quite a while, then began to climb back about 2-3 years ago. It was hovering around the .86-.90 mark for a year or two, then this summer began a remarkable rise to the current number. I kind of think the C$ is getting a bit over valued (it is mostly due to commodity prices like oil - Canada is a big producer). I expect things to fall back a bit, but probably not below 1.00 for a while.

The current model for missionary support basically puts the risk on the exchange on the shoulders of the missionary. The model we are talking about here puts the risk on the shoulders of the supporting church. The risk is that supporting churches could find themselves stretched at points. However, the general strength of the US economy (for US churches) should somewhat limit that...

Of course, these things are hard to predict.

It might be a worthwhile project for a church to monitor their own missionaries support for a few months and see what kind of impact this model would have on the budget.

Regards,
Don Johnson
Jer 33.3

Jason said...

Yes, I think Don has mostly answered the questions. Here (http://x-rates.com/d/USD/AUD/graph120.html) is the general flow of the Aussie dollar for the last quarter to give an idea of how it moves.

Frank Sansone said...

Don & Jason,

Thank you for all your help in this. This will definitely make me a better informed Pastor in this area of missions. The chart page that Jason linked to is very interesting.

Regarding the offer of $500 support - um, um, did I say "Johnson Family" I am sure I meant "Smith Family" instead :). Actually I would love to be able to make an offer like that. Unfortunately, we can't do it now. I hope I did not get your hopes up.

Frank

Don Johnson said...

Let's just say I wasn't holding my breath!!!

But I may hit you up for a meeting someday!

Regards,
Don Johnson
Jer 33.3

Jason said...

lol! Missionaries. They're all the same! =D