Stewardship of Surplus Funds

by Bill Langford February 23

As of December 31, 2021 the Outreach fund had a restricted balance of $788,263. This means that the funds available at the beginning of 2022 exceeded the 2022 Outreach budget of $633,396.  While it is important to begin a year with a healthy balance to ensure there is no interruption in support payments to our partners, the current balance is larger than is needed for that purpose. Following is an explanation of how the surplus got so large and plans for how to use it.

How did the Outreach fund balance get so large? Giving to Outreach has been very generous, particularly in 2021, and in some years Outreach underspent the budget. In addition, at times the Trustees would move, with Session approval, undesignated surplus funds coming from net income (income less expenses) to Church Ministry, Outreach, and the Building Improvement Fund. This process is called a board restriction, and is commonly done by non-profit organizations. From 2010-2017 the Trustees board restricted $413,728 to Outreach.

Why did Trustees move $413,785 into the Outreach fund from 2010-2017? During those years the Outreach budget was chronically underfunded. To ensure that Outreach would not run out of money, Trustees proactively moved money into this fund. However, based on a careful analysis of year-end balances in the Outreach fund from 2010 until the present, it was determined that the $413,728* was not ever used by Outreach. This analysis was reviewed by our auditors, Tait Weller LLC.

The table below summarizes the sources of surplus Outreach funds.

Donor Giving$374,535
Board Restricted$413,728
Balance (Dec. 31, 2021)$788,263

What does Session intend to do with the balance? Session authorized the Outreach Commission to propose $125,000 of spending over and above the 2022 budget to support our existing Outreach. The spending proposal will be reviewed by Session and then communicated to the congregation. Session also voted to transfer the board restricted $413,728 out of the Outreach Fund into the Building Improvement Fund. While a donor restriction cannot be changed without permission from the donor, a board restriction can be changed by the board.

Why did Session transfer $413,728 to the Building Improvement Fund? Since these funds were not designated by donors for Outreach, it is helpful to think of them “as where needed most” contributions. For some time Session has been trying to address a critical need for intern housing for women. Last year the building committee began to look into the cost of building two apartments in the third and fourth floors in our building at 315 S. 17th Street.  Now, providentially, we have the funds to build the apartments. In addition to building intern apartments for women, some of the funds will be used to complete the courtyard project, which is expected to run over budget ($343,000 is available from the capital campaign), due to inflation and unanticipated complexity.

The table below summarizes these actions. Please note that the balance remaining in the Outreach fund is $249,535, which represents four and a half months of Outreach spending.

Outreach Balance (Dec. 31, 2021)$788,263
– Incremental Outreach Spending125,000
– New Intern Apartments in 315250,000
– Courtyard Completion163,728
Revised Outreach Balance$249,535

* The $413,728 did not sit idle. $228,396 of it was used to reduce the mortgage required for the purchase of 1710. This amount was repaid to Outreach when 1716 was sold in 2020.

Contact trustees@tenth.org with any questions you may have.

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