Dear Church Family,

The Church Council asked me to provide you with an interim update on the church’s finances.  As of August 31 giving toward the Unified Budget was $296,439, which was a 3% increase over the same period last year.  Another encouraging sign is that revenue exceeded expenses in August by $5,978.  However, for the year expenses are still ahead of revenue by $11,709.  As we have explained before, this cash flow problem must ultimately be reversed but is being presently addressed by temporarily “borrowing” from other church funds that do not require immediate distribution.

In response, this month the Church Council approved the Finance Committee’s recommendations to reduce the Unified Budget for the second time this year.  The Committee came up with over $27,000 in savings in essentially every area from postage to sanctuary decorations.  While salaries were not cut for the remainder of the year, reductions were made in staff-related expenses such as mileage, continuing education, and telephone.  Depending on giving, these measures should bring us very close to breaking even by the end of 2008.  (In addition, a Budget Committee for 2009 has been appointed to take a fresh look at all areas for next year.)

How serious is the situation?  On a percentage basis, the 2008 deficit is about 2.5% of the Unified Budget.  While this is not good, we do not feel it calls for a radical or emotional response.  We believe it can be corrected through careful management of expenses, a little extra giving, and prudent planning for next year.  We may have hit the warning strips along the highway, but the car is not about to crash.

To the contrary, new and exciting things are happening at our church! Examples include the weekly Underground services, reinvigorated youth groups, and new Bible studies.  At the same time the church continues to draw people into relationship with God through our excellent day care, outstanding music program, and first rate facilities.  The Word is being preached, missionaries are being supported, and we are ministering to one another and those in our community with passion and with our pocketbooks.  Here is just a sampling of some other areas of your generosity through August 31: Mission Advanced Specials $4,007; Heart & Hands $2,590; Hungry World $3,732; Pastor’s Discretionary Fund $9,448; and Building Fund $37,132 (all of which gets paid on the mortgage every month).  It is good to be a part of First Church! Thank you for being a blessing to others.

On behalf of the Church Council,On behalf of the Finance Committee,

Steven J. Peters
Finance Committee Chair

RECENT CHANGES IN TAX LAW

The following is an excerpt from an article titled “The Pension Protection Act of 2006 Has Several Provisions that Effect Charitable Donations,” in the November 2006 Clergy Finance Letter from Clergy Financial Services of Grand Rapids, Michigan:

“Recordkeeping Requirements

“In order for a donor to receive an income tax deduction, a charitable contribution of money, regardless of the amount, must be substantiated by a cancelled check, bank record or receipt from the charitable organization.  The receipt must show the name of the charity, the date of the contribution and the amount of the contribution.

“Donation of Clothing and Household Items

“No deduction is allowed for contributions of clothing and household items that are not in good used condition or better.  Items of minimal monetary value (i.e. used socks, used underwear, broken appliances) will not be allowed.

“Tax Free Distributions From IRA’s

“Individuals may have up to $100,000 per year distributed from their IRA to a charity provided that:

• The donor is at least 70-1/2 years of age
• The transfer is made directly from the trustee of the IRA to the charity
• The transfer is made before 12/31/07
• The transfer can not be used to fund a charitable remainder Trust or Gift Annuity