Large bequest leaves church with 2008 surplus

Published June 1, 2009

Mississauga, Ont.
General Synod’s deficit for 2008 might have been higher than the approved $1.3 million but, thanks to a generous bequest, the General Synod ended the year with a $1.865 million surplus.

Michele George, General Synod’s new treasurer, said the deficit for the year ending Dec. 31 was $2.043 million.

Although the bequest was expected, she explained that, “in the budgeting process, we do not budget for undesignated legacies. … We were fortunate in 2008 to receive a large legacy from the (Marjorie) Dashwood estate of $3.6 million and we were able as a result to absorb the deficit for the year and, in fact, show a net revenue position.”

The difference between the $1.3 million projected deficit and the $2 million figure was the result of three significant costs, Ms. George said.

“The investment loss this year is $378,000 and that obviously reflects the severe downturn in the markets this last year,” she said. “However, you have fared quite well compared to the losses in the general marketplace. The loss represents about a 16 per cent loss on the portfolio, but that’s considerably lower than the average loss which is somewhere between 30 per cent and 40 per cent.”

Ms. George also noted that gains in the market in the first four months of 2009 have resulted in a “small improvement” of about 3 per cent, “although that should be viewed cautiously, given that the markets are very volatile.”

The second major cost was a write-off of obsolete stock from the Toronto-based Anglican Book Centre, which General Synod licensed to the Lutheran church’s publishing arm, Augsburg Fortress, in 2007.

“In 2008, a decision was made to write-off the remaining unsold non-ABC publishing stock, about $280,000 of the reduction in the value of the inventory reflects that write-off,” Ms. George said.

Cutting staff at the General Synod office in November in order to reduce the projected deficit also resulted in unbudgeted expenses of about $330,000, Ms. George said. Those expenses included salary continuance provisions for staff who were laid off, legal costs and consultant’s fees.

The Dashwood donation also alleviated a cash shortage. “We are in a much healthier cash position than we were at the end of 2007,” said Ms. George. At the end of 2008, “there was cash on hand of just over $1 million. In 2007 … you were in net debt position of about $600,000.”

Also affecting the 2008 results was the creation and staffing of a new philanthropy department at the national office.

-Costs for 2008 were 31 per cent higher at $560,000 than in 2007 ($447,000), and Ms. George attributed that to the costs involved in hiring the new director, Holland Hendrix.

She noted that, because Mr. Hendrix joined the staff in September instead of June as had been planned, there were some cost savings but it also affected his ability to generate revenue in a shorter period of time.

Although, the year ended in a surplus, the cost-cutting was still necessary, said Archdeacon Michael Pollesel, general secretary of the Anglican Church of Canada.

“The plan to reach financial equilibrium means that deficits must be reduced each year,” he said. The national church plans to eliminate deficits by 2012.

Ms. George, who was hired recently as treasurer and began work in late April, thanked acting treasurer Michael Herrera for his excellent work preparing the 2008 financial information.


  • Leigh Anne Williams

    Leigh Anne Williams joined the Anglican Journal in 2008 as a part-time staff writer. She also works as the Canadian correspondent for Publishers Weekly, a New York-based trade magazine for the book publishing. Prior to this, Williams worked as a reporter for the Canadian bureau of TIME Magazine, news editor of Quill & Quire, and a copy editor at The Halifax Herald, The Globe and Mail and The Bay Street Bull.

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