Disaster recovery from Hurricane Harvey Flooding in Houston, August 2017. Disaster relief funds are staying in St. Louis. They cover cash flow problems at Synod.

Millions of Disaster Relief Dollars Still in St. Louis?

Did you send a check to LCMS Disaster Relief in St. Louis and specify you wanted your dollars to go to Hurricane Harvey victims?  Do you know what happened to your contributions?

The Selfless Work By Our Texas District

First, some good news. If you instead sent your contribution to the Texas District of the LCMS and specified your dollars were for Harvey victims, every single dollar you sent to our Texas District is going to Harvey relief.  Not a dime will be kept by the district office as it quickly distributes your funds to families with needs.  This is selfless of our Texas District since staff time has been heavily used for Hurricane Harvey relief efforts.  And, this has been a labor of love for them.

But, what if you sent your Hurricane Harvey donations to LCMS Disaster Relief at Synod headquarters in St. Louis?

St. Louis Disaster Relief Keeps A Cut of Donations

It is not well-known that our National Headquarters Disaster Relief staff does NOT send every donated dollar to victims of Harvey and other disasters. Instead, our Synod headquarters keeps between 6 – 12% of contributed dollars as what it calls a ‘uniform support rate.’  This “cut” compensates Synod Headquarters for distributing your disaster contributions.

One may ask, what if they just sent the relief dollars straight to the local district and congregations?  Didn’t we do that with the 9/11 disaster in New York?

Synod leadership knows its cut is high and might reduce charitable gifts if it’s percentage becomes well-known.  Negative publicity might already have contributed to a severe downturn in charitable gifts to Synod in 2016.  Congregations Matter asks, how large was the decline?

Synod’s Shortfall in Donations Surprising

Synod’s Board of Directors (BOD) minutes document from their November 16-17 meeting, a shortfall of $2.5 million in Mission Advancement resources last year (Page 1, Paragraph 4).  Click here to download a copy of the November BOD minutes.

Do the math.  The shortfall was $2.5 million in support for the Mission Advancement Office.  If the  Synod’s cut was 12%, the shortfall in charitable giving might have exceeded $20 million ($2.5M/12%).  Was that reported in the November 2017 Lutheran Witness on the “State of the Synod”?

In the case of Hurricane Harvey, some at the International Center (I.C.) are proud Synod decided to ‘only’ retain as much as 6% of  donations to compensate the I.C. for its Harvey relief ‘efforts.’

Never Let A Disaster Go To Waste

Congregations Matter is aware of a dark phrase whispered in the hallways of the I.C. at times like these: “Never let a disaster go to waste.”  Here’s why:  Synod leadership considers unallocated disaster relief contributions as improvements to its own cash position.  Quoting from the November 2017 Synod BOD Minutes, Section 120, Financial Report (Page 5, Paragraph 3):

“Chief Financial Officer Jerry Wulf extended upon his written report (pp. 20–22/483) and those of the financial services area (pp. 32–89/483). Since July 1, over $5 million in disaster response gifts, including more than $3 million related to hurricanes, have improved Synod’s cash position substantially.” (Emphasis CM)

Ask yourself, “Should disaster relief dollars given by faith-filled donors be used to fix Synod’s cash flow issues?

It Gets Worse:  Hidden Deficits At Synod

In the same section of the November 2017 Synod BOD minutes (Page 5, Paragraphs 6 and 7), notation is made of a “$13 million deficit in unrestricted, undesignated funds.”  Synod’s finances are in trouble.

Yet congregations who tried to decipher financial charts on pages 12, 13 of the November, 2017 Lutheran Witness “State of the Synod” issue received a false impression our Synod is in good financial shape.

Congregations Matter has proposed an overture for your congregation to consider to require timely and transparent financial reporting in Synod.  You can read the article by clicking here.  You can download the overture by clicking here.  When deficits are being hidden from congregations, it’s time for transparency.

Synod’s 20% Solution

Instead, Synod’s November 2017 BOD minutes reveal the I.C. is preparing for cutbacks of up to 20 percent in departmental budgets to try to cover part of its mammoth budgetary deficit (Pages 6 and 7).

20% is a familiar percentage to regular readers of Congregations Matter.  As just noted, Synod leadership is preparing for 20% cuts in budgets at the I.C.  Yet from 2015 to 2016, President Matt Harrison’s personal paycheck BALLOONED by 20% to $252,573 from $210,156.

It’s Time For A Change

When, Lord willing, a new Synodical President is elected by congregations in 2019, he will inherit a financial mess at the I.C. left behind by his predecessor.

He will also need to restore ethics to the administration of disaster relief contributions.

If St. Louis does not get Harvey relief requests equal to the dollar amounts contributed, it does not actively seek to quickly distribute your funds.  It could be many months before your contributions make it to Hurricane Harvey victims.  It’s even possible our Synod headquarters will never directly distribute your contributions to Harvey relief.  Instead, your funds might eventually be melded into helping to pay for other Synod Disaster Relief efforts or relief expenses unrelated to Hurricane Harvey.  Your disaster relief dollars could even be moved to cover expenses at the I.C. that deal with disaster relief to help relieve the overall Synod deficit.

Just ask yourself, “Is that what I sent my gift to the LCMS to do?  Pay for salaries and overhead at the I.C. instead of helping people in Texas, Florida and Puerto Rico?”

Here’s the Scorecard from the BOD Minutes

Given how hard it is to decode the financials of our Synod, Congregations Matter can only estimate an overall scorecard on charitable giving for hurricane relief as of November, but the ‘What does this mean?’ element of the following numbers will be understood by congregations.

(Please note: Congregations Matter is working from BOD minutes where financial information is presented in prose, not in numerical columns.  Therefore, all of the math below is approximate.  Reporting this information in prose is not the transparency Synod donors need — or have been promised.  Obscured financial reporting is another reason Synod needs a change of leadership.)

At the Texas District level:

$1.8M has come to the District as gifts from various sources, including $200K from Synod
$1.0M was immediately distributed by the Texas District

Since the initial round of gifts distributed….

$3.1M in additional assistance requests
(-$0.8M) remaining assets in Texas District to be distributed                                     
$2.3M unmet need (“shovel-ready projects”) in the Texas District

At the Synod level

$5.5M received by the Synod since August 21
(-$0.3M) spent on overhead at Synod (5.5% spent so far)
(-$1.5M) disbursed directly (or “committed”) to Texas / Florida / Puerto Rico / Others?
(-$0.5M) (at least) to be designated in the future for Puerto Rico relief
$3.3M of Disaster Relief donations remaining at the International Center

Of the $1.5M Distributed Directly of “Committed” (90% is “Harvey-related”)

$300K was used by Synod in non-“Harvey-related” disaster relief (Praise God!)
$200K sent directly from Synod to the Texas District (Praise God!)
$120K (10% of the $1.2M spent on “Harvey-related” relief) was used for direct “Synod” relief supplies and work done by Synod itself (Praise God!)
$880K was distributed from Synod in direct grants to Texas congregations and RSOs (Praise God!)

$3.3M to Help Cash Flow At Synod

This number doesn’t have to be decoded.  Synod reports at least $3.3M in relief donation “cash” (after they took their cut) given by donors to help people in emergencies is hanging around the halls of the IC.  

Synod has not reported in the minutes the exact number of income other than “total net hurricane-related giving exceeded $6 million and that another six-figure gift had just been received” (Page 7, Paragraph 2). Congregations Matter wonders:  does “net” mean after Synod’s 6% cut is taken from donations as overhead?

Texas District Waits for Relief Funds

Texas District has identified $2.3M of unmet need that Synod isn’t funding.  It seems much of this money is being held in reserve for “provision of materials and long-term care for professional church workers” (Page 7, Paragraph 3).

According to Synod’s August 21 through October 23, 2017 Donor Accountability report (click here to download a copy), our Synod held more than $3.3M in Hurricane Relief Donations two months after the disaster while Texas, Florida and Puerto Rico suffered.  Is that what congregations send our money to St. Louis to do?

Shouldn’t Synod leadership simply forward the donated money to local LCMS district leaders — at least the $2.3M that Texans already say they need and have projects ready to go?

Disaster Relief gifts should not be kept at the I.C. to improve Synod’s cash position in St. Louis.  That’s bad management — and worse stewardship.

Our Synod leadership needs to change their ways, or, we need new, ethical leadership at our headquarters in St. Louis.

Congregations Matter.  So do Hurricane Harvey victims, as well as the Florida victims of Hurricane Irma and the Puerto Rico victims of Hurricane Maria.


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