Clyde Kilough presented the Council of Elders with a positive financial report and the plans to wisely invest the increased income in the work of the Church.

Financial Report

In his report to the Council Dec. 8, Mr. Kilough first focused on the Church's financial circumstances.

To put the finances in perspective, Mr. Kilough summarized that for United's first nine years, income increased at a compound rate of 3.45 percent. Over the last four years, the income has grown at a rate of 4.75 percent.

In the last fiscal year it increased at a rate of 7.8 percent. Increase for the current fiscal-year-to-date is 8.93 percent. And in the last 365 days as of Dec. 15, the increase has been 10.14 percent!

The Church carried surplus income from 2005-2006 into the current fiscal year. And there is now additional surplus because income to this point is greater than what was anticipated. This allows the Church to do more without a negative impact on the current budget and without reducing the mandated cash reserves.

In addition, based on recent trends, the Council is in a position to consider additional budget increases for next year.

On Dec. 10 Mr. Kilough laid out to the Council the administration's plans for additional expenditures in this current fiscal year in the areas of Media and Communications Services and Ministerial Services. The operation managers had met a few weeks before to plan how they could best spend extra funds in the remainder of this fiscal year.

Half a Million for Media

In the media area, we plan to invest over half a million dollars to increase our subscriber bases in several of our publications. We plan to advertise The Middle East in Bible Prophecy and The Good News in Reader's Digest. Based on previous experience, it can safely be predicted that the ad will result in 30,000 additional Good News subscriptions.

Mr. Kilough commented that it has been seven years since the Church last ran an ad in Reader's Digest in the United States. Peter Eddington pointed out that the Church still receives responses from that ad. For example, 11 responses to that ad were received in November of this year.

Mr. Kilough pointed out that our records show that donations from donors, coworkers and members whose first contact with the Church came from that advertisement eventually exceeded the cost of running the ad. The point is that in the long term, an ad in Reader's Digest more than pays for itself.

It is also proposed that advertisements for Marriage and Family: The Missing Dimension and The Good News would be run in Parents and American Baby magazines to reach a younger demographic than Reader's Digest, and we anticipate netting another 32,000 subscriptions from these ads.

In addition, Internet advertising for Vertical Thought and World News and Prophecy are projected to increase circulation by a total of 21,000 between the two publications. This would be the first time ads for either publication have been run outside of promoting them in our own literature.

Advertisements would also be run on the Internet to offer Managing Your Finances and You Can Have Living Faith along with The Good News.

Advertisements would also be inserted in several card packs offering a booklet and The Good News.

The total cost of the advertisements and the resulting fulfillment expenses would be $531,521.

Ministerial Services

In addition, Mr. Kilough proposed that slightly over $200,000 be added to the Ministerial Services budget, to be used primarily for a six-week training program for newly hired full-time ministers and extending Ministerial Development into several international areas.

There would also be an increase in funding for United Youth Corps projects. Mr. Kilough emphasized the value of providing young adult members with Youth Corps experience and service to help them grow in their commitment to serving the Church.

Paying Off the Mortgage

If the current income trend continues to the end of the current fiscal year (July 2007), the Church can invest the nearly three-quarters of a million dollars of these items and still have a sizable surplus.

Therefore, Mr. Kilough suggested that the next priority for use of the surplus would be to pay off the home office property. We are due to refinance the remaining 10 years of our mortgage, and we are very possibly going to be in a position to totally pay it off. Doing so would save approximately $400,000 in interest over the next 10 years, plus it would free up $156,000 in annual mortgage payments that could be channeled back into the budget.

On Dec. 11 Mr. Kilough submitted to the Council a resolution authorizing the administration to pay off the remaining amount on the home office mortgage before the end of the current (2006-2007) fiscal year. The Council voted unanimously to adopt the resolution.

More Flexibility

Mr. Kilough moved on to a discussion about the point at which the Council should consider additional budgetary items, based on income trends in a given fiscal year.

A previous resolution on cash reserve policy gives the Council authority to consider additional expenses after the Feast of Pentecost Holy Day offering. But since there is so little time between Pentecost and the end of the fiscal year (June 30), Mr. Kilough proposed that the decision date be moved earlier in the year, to Jan. 31, which would give the Council more flexibility and more time for consideration of additional expenses. The Council unanimously approved the resolution. UN