Last month, the North American Mission Board finally released their 2023 Ministry Report in which they give an account for their operations for their Fiscal Year 2022, which ended on September 30, 2022. Previously, the NAMB 2022 Ministry Report detailed just how much of a financial institution NAMB was operating as with over $200 million in market securities with a book of $75 million in loans. 2023 proved to be a mixed bag, where operationally, NAMB’s expenditures increased significantly, led by an uptick in SEND Relief. However, because the FY2021 concluded in September of 2021, before a period of major stock market declines, this was reflected in the 2022 Ministry Report to the tune of over $38 million in Common Stocks alone.
Church Plant Numbers
Previously, it was reported that the SBC continued its decline in church attendance and church count, numbers that indicated that while there was evidence of a Covid Rebound in Baptisms, the trajectory of the convention is still in decline.
Southern Baptists added 917 congregations, 745 new churches, 126 new churches affiliated with the SBC and 46 church campuses were launched. In 2022, NAMB also began reporting the number of replanted churches, and of the 745 church plants, 106 were replants.
126 out of 917 new churches represents only 13.7% of new churches being planted as actual SBC churches. This could be due to the “replants” in which existing non-SBC churches are downsized, which is 11.56% of the “new” congregations. NAMB can inflate its metrics with replanted churches and by using its partnerships with local church planting organizations. However, the vast majority of new churches are not actually SBC affiliates.
The Balance Sheet
Revenues would increase Year over Year for NAMB, but the Balance sheet is over $61 million less than reported for FY2021.
The bulk of the shrinkage is embodied in the nearly $72 million in investment losses for the period. Otherwise, the lending activity was actually reduced for the period, which is a positive, along with a reduced liability for postretirement benefits. Their net Property and Equipment increased by over $17.2 million. Note 8 in the report details that they increased with $19 million in buildings and building improvements paired with roughly $3.5 million in land.
Stock Market Declines
It must be stated that this was a detrimental time for the stock market, so it is naturally going to be reflected in this report. While the headline might attract attention to the $70 million in investment declines, they likely have recouped a large percentage of their losses from the 18.63% YTD performance of the S&P 500.
Of their Common Stock portfolio, they saw declines of $38.5 million. Mutual Funds and ETF’s, which presumably are linked to their postretirement benefits obligations, suffered declines of $25.2 million. These two items account for $63,665,354 in YOY declines.
The critique of NAMB operating as a financial institution is once again reiterated as these massive declines, though somewhat mitigated from YTD gains, reflect the risks NAMB took with such outsized investments in equities that far exceed their obligations. Essentially, Southern Baptist money was lost due to market volatility. This money could have been spent fortifying churches.
Bank of NAMB
It is probably for the best that NAMB’s book of loans shrank YOY as it is really an underdiscussed element of their operations, especially as it exceeds $70 million. Biblically, there is no justification for the notion of a church planting organization charging interest to individual churches, which garnered revenue of $3,725,424 in FY2022. That is nearly $4 million in tithes paying interest to a church planting organization for their building, land, or other PPE assets. For an organization the size of NAMB, this money is inconsequential, but not so much to a local church. Deuteronomy 23:19 states, “You shall not charge interest to your countrymen: interest on money, food, or anything that may be loaned at interest.” How much more should this apply to the Christian?
There are fewer larger loans as a percent of the entire book compared with FY2021. The report notes that the restructured loans, one for $679K and another for $5.3 million, with the latter perhaps restructured apart from NAMB.
Whereas California was the largest state as a percentage of the book, the decline could suggest that the $5.3 million debt which was restructured involved a church in California. Otherwise, Arizona, home to an growing population, became the largest state in the portfolio, increasing its principle outstanding to $10.3 million from $7.7 million while netting an increase of 1 loan. Washington DC represents 6% of the portfolio with three churches. It is likely that Pillar Church DC is one of those churches, as DC real estate is pricey.
The problem is not that NAMB assists churches with massive expenditures, like a building or property, especially as real estate has entered a bubble since 2018, but there should be transparency with the largest benefactors of these loans. 8 churches are receiving more than $2 million of Southern Baptist money and it should be known who they are. NAMB could brag about how it has helped these churches with their buildings in these expensive cities that the SBC is trying to reach, so it is not as if the narrative is negative.
SEND Relief and Ukraine
One of the major items of expansion for FY2022 was the increase in expenditures pertaining to SEND Relief, which is NAMB’s humanitarian aid program.
Evangelism and Relief, which embodies SEND Relief amongst other projects, saw the largest increase across the functional allocations. SEND Relief led an increase of $19,973,595 in expenditures, representing a 63% YOY increase in expenses.
The primary driver of this is the Ukraine War. The end of Covid was ushered by the propaganda machine switching focus to shameful saber raddling against Russia to support Ukraine. Due to America and Zelensky’s warmongering, the subsequent collateral damage has led many domestically to donate to relief efforts for the Ukrainian people. According to NAMB, “Gifts to Ukraine relief thus far have totaled $12.9 million, with $10 million given to Send Relief and $2.9 million given to the IMB.” SEND Relief claims they have helped 111 relief projects and upwards of 1.6 million Ukrainians. It should be noted that much of the $10 million SEND Relief spent on Ukraine, which would represent over half of the $19 million increase, was donated to SEND Relief with the express purpose of supporting the Ukrainian people, so much of this money was likely earmarked and donor restricted.
The expansion of SEND Relief should attract further scrutiny as to whether a sizable entity should be under the umbrella of NAMB and not a separate SBC entity altogether. This would allow a more streamlined and focused effort for both NAMB and SEND Relief, with the former focused on church planting while the latter functions as the relief aid. It is also strange that SEND Relief did more in foreign aid than the International Mission Board regarding Ukraine.
Other Notes
The increase in Church Planting expenditures was primarily driven by a $3,226,412 increase in benefits, up 91.6% YOY. While there were increases across the board for benefits, particularly with the postretirement expensing, this was a significant variance compared to the other programs.
Church Planting increased its Ministry Partners expense 115% to $3.66 million. This would be the regional church planting organizations, like New City Network in the DC Metro area, among other organizations that NAMB partners with in its operations.
Crisis Response Revenue increased to $14.9 million, up from $3.4 million, which is likely related to Ukraine.
Conclusions
NAMB’s operations were hampered by stock market declines, which should show improvement when they release their 2023 numbers. This is the most profound impact on their balance sheet and overall financial health.
Additionally, they have reduced their exposure within their lending book, but the debate should be raised as to whether it is sinful for NAMB to lend money to churches at interest. While the financialization of modern society is beyond the control of the Church and individuals, NAMB should not be like the world in this regard.
The expansion of SEND Relief operations was primarily driven by the Ukraine War. The overall budget of relief expenditures totaling over $50 million makes necessary the question of whether SEND Relief should be its own entity, separate from NAMB where it might be more efficient and focused.
If the Southern Baptist Convention were an actual business meeting and not all about pomp and circuses, then these are the questions which should be raised.
