Great Commission Fund (GCF) Results through June 30, 2008
Total revenues for the year ending June 30 equal $39,156,000, or 93.2 percent of the revenue budget of $42,000,000. GCF expenses were held to 93.5 percent of the expense budget resulting in a budget deficit of $180,000 for 2007–2008. This deficit reduces the availability of cash reserves to fund our monthly operations with expenses budgeted to exceed revenues by nearly $3 million over the next five months.

July GCF giving through July 30 totals $3,424,000. This represents 117.9 percent of the July revenue budget with revenues projected to reach 120 percent of budget by month-end resulting in projected excess budget revenues of over $575,000.

The Executive Committee of the Board of Directors met last week and expressed deep gratitude for the increase in giving. However, because of the deficit of $180,000 from 2007–2008, the high summer expenses related to missionary transitions, and the uncertainty of sustainable giving levels, the decision was made to continue to delay salary increases for National Office employees and district superintendents as well as the 3 percent allowance increase for missionaries on home assignment. At its June meeting, the Board of Directors had agreed that unless giving increased dramatically, effective September 1, we would be forced to implement a 10 percent salary and allowance reduction for all personnel paid out of the Great Commission Fund. Due to the tremendous response in July, this pending 10 percent salary reduction has been deferred to the October Board of Directors meeting for reconsideration. This is a wise and prudent move, because it will give more time to track giving trends and it will not affect the current salaries of our workers for at least a few more months.

Even with a struggling economy, I still see tremendous opportunities to fund our mission of reaching lost people in the US and around the world and completing the Great Commission. According to the 2007 C&MA Church Annual Report, only 4 out of 10 giving units who give to their church local general fund give to the Great Commission. I believe as each church intentionally engages the hearts of its people for reaching a lost world, we will see this participation rate rise. Since you know the specific giving details for your church, will you help educate your pastor and board on this key metric?

If you would like to receive a PowerPoint presentation on the results from our fiscal year that ended June 30, 2008 and details on our new budget, please send me an e-mail at baldesk@cmalliance.org.

Great Commission Sunday
A total of over $1,039,000 has been received at the National Office for Great Commission Sunday! If you have not yet sent in your church’s Great Commission Sunday offering, please remit and indicate the amount of this special offering on your church’s next monthly remittance. If you have not had an opportunity to participate yet, it is not too late!

IRS Raises Standard Mileage Rates
The Internal Revenue Service (IRS) has increased the standard mileage rates effective July 1, 2008 to 58.5 cents per mile, an increase from 50.5 cents per mile for January through June 2008. This higher rate may be used to reimburse employees tax free for mileage driven in their personal automobiles on July 1 or after. This new rate may also be used to value personal mileage in church-provided vehicles with a fair market value of $15,000 or less for inclusion on the employees W-2 as taxable income. The rate for providing services for charitable organizations is set by statute, not the IRS, and remains at 14 cents a mile.

Tax Guide for Churches and Religious Organizations
The IRS offers a quick reference guide of federal tax law and procedures for churches and religious organizations to help them voluntarily comply with tax rules. It can be accessed on the IRS Web site.

Misclassification of an Employee Can Create Problems for the Church
Both the Internal Revenue Service and your state are concerned about the proper classification for tax purposes of individuals who provide services to the church. Before providing compensation, the church must determine the worker’s classification for tax purposes based on the criteria established by the IRS and the state. Here’s an brief overview:

• There are basically two classifications: employee (W-2) and self-employed, also known as an independent contractor (1099).
• An employee can be full-time, part-time, seasonal, or contracted, but all of these types of employees, except for ministers, are treated alike for tax purposes.
• A minister is considered an employee for income tax purposes and self-employed for social security tax purposes (known as the dual status).
• A self-employed individual is treated differently for tax purposes especially in the area of tax withholding and reporting.
• If an employee is misclassified, significant penalties are possible for the employee and employer.

These are general observations and not a comprehensive explanation. If you have any questions related to the above, please contact Tim Cummings at 719-265-2068 or cummingst@cmalliance.org. Tim is the general counsel/assistant corporate secretary in the National Office.

Office of Employee Benefits
C&MA 403(b) Retirement Plan. It is never too late for your pastor to participate in the 403(b) Retirement Plan! The plan offers 13 investment options, which range from international to fixed income with the Alliance Development Fund. A church may contribute even if the pastor cannot financially make a contribution. Our 403(b) Retirement Plan is recognized by the IRS as a “Church Plan,” which allows a pastor at retirement to offset his pension received from the C&MA by the housing costs that occurred over the year. This may mean that the pension could be tax free at the time the pastor receives it. For more information, contact the Benefits Office.

C&MA Fellowship Fund Retirement Plan Prior to the C&MA 403(b) Retirement Plan, The Alliance had a pension plan called the Fellowship Fund. The participants in this pension plan represent years of dedicated service as missionaries and pastors. Nearly 550 Alliance retirees still rely on monthly income from the Fellowship Fund. Your church’s contribution guarantees each of these retirees income for the rest of their lives. General Council mandates that churches contribute 0.7 percent of their prior year’s general income until the pension plan is fully funded. Our most recent actuarial report indicated that if all current situations continue, the pension plan will be fully funded in approximately 2010. In late April, you received a letter along with coupons to mail in your payments. Please use these coupons when making your payments. Payment toward the Fellowship Fund may be included with your monthly Great Commission Fund contribution. For more information, contact the C&MA Office of Employee Benefits at 800-700-2651 or benefits@cmalliance.org.

The Alliance Development Fund (ADF)
See rates fluctuating all the time? ADF can help your church.

ADF’s purpose is to create funds to provide loans to C&MA church congregations, districts, and affiliated organizations for their use in acquiring, constructing, or remodeling churches, parsonages, or other ministry-related construction projects. In order to fund various ministries, ADF offers stable investment returns on certificates, IRAs, cash or fixed income option in the C&MA 403(b), retirement agreements, individual and church savings agreements, education savings accounts, and online banking with 24-hour customer service. For more information about unleashing your resources, please visit www.adf-inc.com/dlp or call toll free 1-888-878-3060. ADF is here to serve!

Thank you for your continued prayer and support for The Christian and Missionary Alliance. I truly appreciate your leadership in the area of finances in your local church.  If you have other specific questions or need help with other financial issues, please let me know how we can help.

Gratefully,

Ken Baldes
Vice President for Operations/Treasurer and COO