Why was there a major change in contributions from FY20 ($9.5M)? The pandemic impacted all organizations and especially churches. Grace Chapel also was impacted in many ways through the pandemic, and we are still working our way back to that level of general fund giving levels. Overall, our support has been very strong and we’ve been blessed to be able to balance the budget even as we continue to add new ministries and ways to serve our communities. We have adjusted expenses through this period and increased alternative revenue sources including rentals and grants.
Why is the Contributions total for FY23 ($8,294,177) different from what was reported on the prior year’s Annual Report (7,992,717)? The increase to FY23 Contributions came out of the FY23 Audit of the financials during which we learned that the online gifts made to Grace Chapel reached a material threshold that triggered different treatment of those donations in the past. Specifically, similar to calendar year end, any donation post marked April 30th or before could be allocated toward the prior fiscal year. Initially for the annual celebration for FY23 this methodology is how the contributions were allocated. We learned in the Audit, however, that for online donations created on or before April 30th should also be allocated back to the prior fiscal year. This was a change for us as typically these online donations are not received on the creation date but 3-5 business days after. Historically, therefore, these transactions were considered as May transaction due to their posting date. We were instructed to reclass back to FY23 all of the April 30th created donations. This was a significant hit to May of FY24 that by the generosity of all of you, we were able to overcome and still exceed budget by the end of FY24.
We have adjusted our fiscal year end process with the new process of counting donations, and so we do not anticipate a similar change to the FY24 Contributions post the FY24 Audit.
Why does Ministry Support & Personnel increase $1M in FY24 from FY23? The growth seen in FY24 Ministry Support and Personnel expense from FY23 is mainly driven by a couple of factors within Personnel expense. In FY23, the Digital Ministry Initiative fund was still covering the ministries of Digital Ministry in full, in addition to fully covering 2 positions within the Marketing team, and in part various other positions relating to Digital Ministry. By the end of FY23, this fund had been fully utilized. The Digital Ministry and Marketing positions in addition to the portioned positions all returned to being funded by the Unrestricted General Fund starting FY24.
Similarly, Grace Chapel had the benefit of a grant through the organization, Made to Flourish which has sponsored the Pastoral Residents through recent years. That grant was fully utilized by the end of FY23, and so our Pastor Resident starting in FY24 is fully funded by the Unrestricted General Fund.
Excluding the migration from restricted funds to Unrestricted General Fund, the Personnel Expense did increase in FY24 by a little over $200,000 the majority of which is the cost of living adjustment awarded to employees and the increased cost of benefit plans.
Why are the budgeted dollars for Ministry Support and Personnel lower in FY25 versus the prior year? Most of this change is due to the timing of payroll between fiscal years, but it also includes adjustments to some staffing positions and some reductions of our ministry support budgets in order to balance the Fiscal 2025 budget year.
Why is the “Other Income” spend so much higher than in the FY23 Annual Report? In the FY23 Annual Report, we had already received a portion of the anticipated Government Employee Retention Credit. It was received late in the Fiscal Year, but we thought it important to show mainly in the FY24 Budget line as we knew this was the Fiscal Year in which those funds would be used. In total the Employee Retention Credit came to almost double what we had received by the FY23 Annual Celebration.
Why does the FY23 Annual Report show Cash Reserves Support of $600,000 in FY22, but for the same year in the FY24 Annual Report does not show the $600,000, but instead $300,000 for FY23 – not present in the FY23 Annual Report? In both years’ reports, FY22 shows a net positive result. The FY22 Total Operating Expense was positively impacted by the FY23 Audit mainly as it relates to restricted funds expense (specifically in our Short-Term Missions, or CCLEs.) Essentially, about $100,000 was moved from Unrestricted General Fund to restricted funds and alleviated the expense on General Fund. So, while $600,000 was taken from the Cash Reserves in April 2022 to support the incoming fiscal year, ultimately only about $300,000 of that needed to be used to support the FY23 fiscal year, with the remainder able to be returned back to Cash Reserves.
In FY24, we did take, toward the end of the summer, the approved $167,256 from Cash Reserves to support the months leading up to December. With a net result of $19,871 at the end of FY24, the $19,871 will be returned to the Cash Reserves for future support.
What is included in Other Charitable Contributions? As noted in the financial summary notes, these expenses are unplanned/additional support of partners and other recipients needing support during the fiscal year. Note that it does not include the benevolence funds which are restricted funds only used for that purpose.
What is included in Financial & Legal Expenses? As noted in the financial summary notes, these expense include income processing fees, interest paid, legal counsel, contractors/consultants, audit fee, and some limited taxation.
