Church Officers Say Finances Are Stable
As Christian Scientists gather for their church's annual meeting, officials say fiscal 1992-93 was a `turnaround year.'
THE First Church of Christ, Scientist in Boston has stabilized its financial situation, church officials say.
In a report to the church's annual meeting here today, Treasurer John Selover will call fiscal 1992-93 "a turnaround year."
A church financial crisis followed the expenditure of more than $300 million on various television activities over several years. Most of these were shut down in the spring of 1992. Since then, the church has taken additional drastic measures to balance its books.
Speaking during a joint Monitor interview with managing treasurer Donald Bowersock, Mr. Selover said the operating expenses of the church in the fiscal year that ended April 30 were as budgeted - $70 million. Income reached about $76 million, $6 million more than budgeted. This was primarily because income from restricted funds held by the church was more than that forecast in the budget, he said.
In addition, the continuing shutdown costs of the television operation (projected at $68.5 million and charged to the previous fiscal year, 1991-92) have been running about $5.8 million less than anticipated, Mr. Bowersock said. "Our financial position has been improving as the year has gone along," Selover said. Line of credit
Nonetheless, the church has arranged what Selover calls "a fiscal safety net" - a $5 million line of credit from the Bank of Boston "to be available to us, during this year only, for swings in cash flow which change from month to month." Selover said the church will strive not to use the credit line.
Selover also said that contributions by church members, branch churches, associations of Christian Science students, and "friends" of the church are down about 8 percent in the first five months of this calendar year from last year at this time, but are about equal to those made in the same period in 1991.
This decline may reflect a general downtrend in giving experienced by other charitable organizations, Selover said. It may also result, to an extent "almost impossible to determine," from an effort by some critics of the five-person board of directors that governs the church "to dissuade members from giving or to divert contributions to other purposes."
Selover said he hoped the church's financial performance in the past year "will indicate a sense of stability, purpose," that will overcome any hesitancy among contributors to the church. He said that the church's finances are "not the big story," which he described as the efforts of the church to bring to the attention of the world the writings of Mary Baker Eddy, the church's founder.
One concern of critics of the board is its decision to publish a controversial book, "The Destiny of the Mother Church," by Bliss Knapp, as "authorized literature." The critics charge its publication violates the Manual of The Mother Church, or bylaws, and that the directors did so regardless to obtain the almost $100 million in bequests conditional upon its publication. Church officials deny both charges.
If the conditions of the wills of Knapp, his wife, and her sister are not met, the funds go to Stanford University and the Los Angeles County Museum of Art. Attorneys for the church and the two other institutions have been engaged in talks to settle a dispute over the bequests and are working with a mediating commissioner to help resolve the matter. A meeting with the commissioner is reportedly scheduled for Thursday, to be followed a week later by a hearing before the Los Angeles County Superior Court, which is hearing the dispute. A group of critics have indicated they will attempt to oppose a settlement in the court.
Because the dispute is still before the court, Selover said he could not comment on the case. Fiscal 1993-94 budget
Other financial points made in the treasurer's report or by the two officials in the interview include:
* Budget plans for the current fiscal year call for expenses of $64.8 million and revenues exceeding that amount by $2.4 million. That surplus is to be used to start rebuilding church assets.
The church has taken several measures to implement the new budget. In March, it announced that it would shut down its monthly news magazine, World Monitor, with the May issue. The magazine, which had a $3.2 million deficit in fiscal 1992-93, employed about 25 people. More recently, nine of some 90 employees of Monitor Radio and a number of other employees in the church administration and in the Christian Science Publishing Society were let go.
Total employment of the church and its publishing arm since the time when television operations were at a peak has been reduced by about 500 to just under 1,000.
* The church is negotiating to sell its loss-making television station, WQTV, to Boston University. That school is currently completing an operational and financial analysis of the station.
In last year's audit report, the church auditor, Ernst & Young, forecast a capital loss of $6.2 million on sale of Channel 68. The proposed sale price has not been announced.
* The value of the Christian Science Monitor Endowment Fund was $52.1 million at the end of the fiscal year, up from $48.3 million the year before. The approximately $3 million of income from this fund is used to offset the deficit of this newspaper, which in 1992-93 was about $10 million.
* Restricted funds of the church (including the Monitor fund and several other funds) amounted to almost $111 million, up from $104 million the previous year.
* Unrestricted funds (which include a pension reserve) were a negative $84 million, improved from a negative $114 million a year earlier. This minus number indicates financial commitments over many years to the pension reserve, anticipated TV and magazine shutdown expenses, and a $5 million borrowing from the Trustees under the Will of Mary Baker Eddy. The church has no external indebtedness except for $1.1 million in equipment leases.
* The church had a net worth of $136.9 million at the end of April. This includes net financial assets (after commitments) and more than $100 million in the value of buildings. The sum is down from $138.5 million at the end of the previous fiscal year.
* Cash and securities held by the church are valued at $136.7 million, down from $151.6 million a year earlier.
* The pension reserve, a bookkeeping account in the general funds of the church and available for unrestricted use, earned $3 million more than needed to make pension payments. Its assets, including $23 million in income-earning buildings, an intra-fund internal $42.5 million IOU, and $31 million in cash and securities, total $96.5 million; liabilities toward current and future pensioners were $81 million.
* In round numbers, the church last fiscal year lost $23 million on the publishing, radio, and other activities of The Christian Science Publishing Society, including a deficit of $8.5 million for Monitor Radio. Church administration cost $32 million. Expenses of the church's shortwave broadcasting facilities and operations were $8 million. The church also had $3 million in capital costs and $860,000 in pension costs.
The audit of the church's books was still in process at the end of last week. Bowersock said the auditors faced "less uncertainties" than they did a year ago. Selover described the shutdown of the TV operations and stabilization of the church finances as "a monumental shift."