Most families meet from time to time to discuss family finances. The same is true for the church family of the Pacific Union Conference. We are pleased that we can provide you with a financial report covering 2001 through 2005.

I would like to thank Leon Sanders for his financial expertise and leadership as treasurer during the past five years. When he retired at the end of 2005, he left a very stable financial operation in place. This report will cover the accomplishments and challenges that we have faced since 2001.

The challenges of Sept. 11, 2001, and the natural disasters that have occurred around the world have created a challenging world financial climate that few of us have experienced. Because of these world-shaking events, there have been more calls for donations from many corners. Yet even with these financial challenges, this report will show that God is still in the business of opening the windows of heaven and pouring out abundant blessings on His family.

The two financial components at the union level are the Conference and the Association. There is a close financial relationship of these entities. Both entities are represented in this report.

Total Tithe

Total tithe during this quinquennium was $749.7 million which is $156.7 million greater than during the previous five year period. During the last five years, a plan was implemented to increase the amount of tithe that remained at the local conference. The tithe passed on to the General Conference and North American Division was reduced from 20 percent to 16 percent. The amount that came to the union was reduced from 10 percent to 9 percent. This amounted to an additional $13,344,838 that was retained for local conference use. See Chart A.

Membership and Tithe Comparison

Pacific Union is made up of four primary ethnic groups. Chart B illustrates the size and financial strength of each group.

Mission Giving

God’s family is scattered throughout the entire world. A portion of the tithe, along with the following basic mission offerings, provide support for world wide mission work. The offerings include Sabbath School, Thirteenth Sabbath, Investment, Birthday and Thank, and Miscellaneous Mission.

Giving to these missions offerings has decreased by $883,960 during this quinquennium. However, Special Project Giving continues to be the preferred way to assist the world field. During the past five years, many thousands of dollars have gone directly to specific mission projects from local churches, schools, and conferences. The total amount is not known since the information is not recorded at the union level. The amount that has passed through the Pacific Union for designated missions is $22,002,626.

Holbrook Indian School and other work among Native Americans as well as Calexico Mission School are missions within the Pacific Union boundaries. Together with the conferences, the union continues to support these missions. See Chart C.

Sharing Resources

One function entrusted to the union is to provide financial equalization so that growth opportunities are enhanced. Where some ethnic groups and/or students have limited financial resources, they are subsidized from monies pooled within the North American Division and channeled through the union, which, in turn, adds some of its own funds as money passes through to assist where needed. Conferences with tithe income per capita below the average are assisted with operating subsidies. See Chart D.

Additional resources are shared with the local conferences and institutions of higher learning. At the end of each year, if all financial indicators are positive, any gain from the union operation is returned to these organizations after being adjusted for CPI. This amounted to an additional $3.2 million being returned.

Revenues

Tithe is only part of the revenue source for Pacific Union. Other revenue comes in as contributions for designated purposes both from members and from NAD/GC. There are also miscellaneous other incomes and interest. Total revenue for the past five-year period was $149.9 million. See Chart E.

Expenditures

Operating expenses for non-profit organizations are divided into four main categories, showing how much and what percentage is expended for each:

Program Services – The primary purpose of Pacific Union; some of the major expenditures for program services include:

$50.0 million for education

$14.3 million for evangelism

$13.3 million to assist local conference operation

$4.7 million for conference capital projects

Support Services – What it costs to keep the machinery of the organization going. During the past five years support services have been kept to 10.49 percent of expenditures.

Retirement – The Defined Benefit retirement program continues to be funded. This amounted to 5.72 percent of expenditures during the past five years.

Auditing – General Conference Auditing Service provides audit services to all entities within Pacific Union. A subsidy amounting to 4.11 percent of expenditures is provided to assist the local fields with this expense. See Chart F.

The Conference/Association

The current audited financial statements, which are included with the delegate package, show combined figures for the Pacific Union Conference and the Pacific Union Association. The Conference is the ecclesiastical organization which concerns itself with carrying out the mission of the church. The Association exists for the purposes of dealing with legal matters, or financial investments and other details that are necessary for effective administration.

During this quinquennium the Pacific Union has continued to refine its role in upholding the work in the conferences and churches within the union.

The Evangelism Endowment Fund provides on-going funds for innovative outreach by churches and individuals within the union. This past five years, $1,468,557 has been provided for evangelism.

The Education Endowment has provided funds during the past five years that have assisted 1,959 students in the amount of $883,852.

The Appropriations Program supports many areas. This is backed by the Economic Recovery Fund to assure that the union appropriations will still be available to conferences or institutions of higher education, enabling them to continue operating in time of economic downturn.

Church and School Loan Fund and Income Fund provides loans for Capital Improvements.

The union continues to reinforce these areas by channeling back the earnings from the Church and School Loan Fund in excess of the CPI to the Evangelism Endowment, Economic Recovery Fund, and the Education Endowment.

At the present, the earnings being transferred in this way total approximately $869,760 annually. All these funds flow back to the conferences for the advancement of their programs or to the schools for the benefit of individual students. We are pleased to be able to have a part in supporting the work of the local fields.

Looking to the Future

Because of the Lord’s abundant blessings and the faithfulness of the members in giving to His cause, we can state that we believe the Pacific Union is in a sound financial position at this time. It is through God’s wisdom and power that His church thrives. Pray that he will continue to bless and guide us during the coming quinquennium as we manage the finances of Pacific Union for the finishing of God’s work.