Good morning! I’m Nathan Schrenk, and I’ve been a member of the Society since 2016. I’m happy to be back here for the first time in a couple months, as my family and I have been out of town most of the summer. I’m going to talk to you this morning about the Society’s budget. I presume that no one has given Opening Words about a topic as exciting as the budget while I was away, but if so, please bear with me.
I served on the Society’s board as a trustee for 2 years. I am no longer a trustee, but I do currently serve on the Society’s finance committee. I want to stress that this morning I am offering my own opinions only, and am not speaking on behalf of the finance committee or board or anyone else. I mentioned that experience to explain why I first started paying attention to the budget, and why I still do.
Don’t worry: Opening Words is not the right venue to go through the budget in detail, so I won’t do that. But I do want to bring your attention to one high-level aspect of the budget: the Society’s different income sources. Budgets have both income and expenses. The total budgeted expenses for the 2022-2023 fiscal year are right around $546,000. And since the budget must be balanced when it is prepared, total budgeted income is also $546,000.
There are three main categories of income in the budget: member pledges, rentals & ceremonies, and “income from funds” which more or less means withdrawals from the Society’s investment accounts. Member pledges account for $280,000 of the 2022-2023 budget, or a bit more than half of the budget. The Society will spend every dollar you give this year on the current operating budget. The salaries, health insurance, and payroll taxes for our staff add up to $319,000. The staff includes the Leader, Office Administrator, SEEK staff, Music Director, Facility Coordinator, Membership Coordinator, Social Media Coordinator, and A/V staff. Our pledges this year don’t even pay for the staff, much less the other expenses. Maintaining the building will cost $93,000 in the upcoming year. Insurance will cost $22,000. Our AEU assessment, $38,000. And now I’m getting into the weeds. Back to income…
Since pledges don’t nearly cover the expenses, we balance the budget by withdrawing money from the Society’s investment funds, mainly from the Endowment Fund and the Stuckenberg Program & Development Fund. In total, $197,000 of income in the current budget is withdrawals from the Society’s funds. That is $54,000 more from funds than the previous fiscal year budget. Think of the hard choices and expenditure cuts we would need to make without this income, which is 36% of the budget!
I don’t think it’s healthy for an organization like ours to have an operating budget that is so reliant on investment income. I think the vast majority of the Society’s operations each year should be funded by pledges that year. Members would then understand that the Society’s programs need their pledges, and a reduction in pledges will result in cuts to programs.
Moving in this direction would require increasing pledges or reducing expenses. There are very few expenses in the budget that I’d want to see cut, so I would rather see pledges increase.
If the Society’s operations were paid for by pledges, income from the Society’s investments would potentially become available for new efforts, perhaps including more charitable outreach and efforts that would make the Society more relevant to the wider St Louis community by increasing our collective benefit to the community.
We are beneficiaries of the past generosity of members who donated the funds for the Society’s endowment, and I also appreciate those who have managed the investments and expenditures of the Society over the years, enabling that endowment to grow. But perhaps the availability of these investment funds is making us complacent about collectively supporting the Society now? What would we do as a community if these funds were not available to prop up our budget each year?
If you have thoughts on these topics, or would be interested in attending a Forum where we could discuss them together, please let me know. If it seems like there’s sufficient interest, I’ll organize a Forum. Thank you.