DALLAS (BP)–GuideStone Financial Resources announced Jan. 27 a workforce downsizing of 10 percent through projected attrition and a hiring freeze as part of a reduction of its 2009 budget.
“The downturn in the global economy and the subsequent reduced value of securities in our investment funds has impacted the fee revenue that funds our budget,” O.S. Hawkins, president of the Southern Baptist entity, said in the news release.
As explained in the news release: “Unlike the mission boards and seminaries, GuideStone receives no Cooperative Program funds from the Southern Baptist Convention. It relies solely on the fee revenue from its proprietary investment funds to provide the resources to fund the majority of its operating expenses. Expenses related to its life and health products are funded through the premiums paid by organizations whose participants are in those plans.”
Other reductions in operating expenses, according to the news release, include a salary freeze and “delaying some purchases such as additional computer equipment, reducing travel, delaying some professional development and reducing the amount of printed materials by providing more materials on GuideStone’s website.”
The GuideStone news release noted that an operating reserve also is part of its budget strategy.
“Over a decade ago, and in recognition that financial markets are cyclical, GuideStone trustees established an operating reserve that would provide additional resources for times such as these,” the news release stated, then quoted Hawkins as saying, “This reserve enables us to maintain our service levels to our participants in times when the markets are down. We must use it prudently in order to extend its ability to offset our anticipated revenue shortfall.”
Hawkins said additional budget reductions may be required, explaining, “While we are hopeful about the future, further deterioration in the financial markets or a significantly prolonged recovery from the current recession may require other measures to further reduce future costs. Continued monitoring of the budget and additional strategic planning is a priority as we move through 2009 and into 2010 with all of its financial uncertainties.
“If the financial markets continue to decline, GuideStone has a strategic plan to add other budget cuts when and if they are needed,” Hawkins said. “If the markets stabilize, GuideStone will carefully monitor its expenses to operate within its modified budget. Even if the markets should begin to rebound, it will likely take an extended period of time to regain the losses experienced during this period of unprecedented market volatility.
“We believe these reductions are absolutely necessary and we must all be diligent to maximize the resources that remain available to us,” Hawkins said. “More than ever before, we are challenged to find ways to serve our participants in a manner that seeks to enhance their financial security.”
The GuideStone news release included the entity’s ongoing advice to participants in its various retirement savings/investment programs.
“During the last year, worldwide financial markets have experienced a season of volatility that the world has not seen in a generation,” the news release stated. “The extreme market volatility has caused many investors to re-evaluate their risk tolerance.” The release quoted Hawkins as saying, “GuideStone has always encouraged retirement investors to be well diversified and appropriately allocated. It is important for participants to evaluate their current asset allocation based on their long-term goals and objectives.”
The news release noted that investors who may want to review their risk tolerance can access their investor profile by going to www.GuideStone.org/InvestorProfile.
“Investing for the long term brings with it unavoidable ups and downs along the way,” the news release stated. “Through its manager of managers approach to building its investment funds, GuideStone is able to access the talents of world-class investment management firms and has avoided the pitfalls of hedge funds such as those reported in the recent Madoff scandal.”
The news release also stated, “During its nine decades, GuideStone has weathered a Depression, multiple recessions, world and regional wars, terrorism at home and abroad, a dot.com tech bubble and economic upheaval. Hawkins assured participants, ‘Know that GuideStone remains strong and is well-positioned to continue in its commitment to serving you through these challenging times and is keenly focused on the trust you have placed in us.'”
To date, the North American Mission Board, three of the SBC’s six seminaries, Woman’s Missionary Union and LifeWay Christian Resources also have announced budget cuts.
On Jan. 19, New Orleans Baptist Theological Seminary announced it would cut its budget in anticipation of a loss of more than $1 million in income from the Cooperative Program, tuition, gifts and investments. The seminary will not lay off any employees but has enacted a hiring freeze and temporary salary reductions of 5 percent for all faculty and staff members, except some part-time employees who will lose medical coverage under another part of the budget reduction. Senior administrators’ salaries will be reduced by 7 percent; NOBTS President Chuck Kelley’s salary by 10 percent. The base teaching load will be increased by three hours, as will the maximum load, for at least 18 months. Additionally, a freeze has been enacted on non-essential operating expenses, purchases, travel and professional development.
On Jan. 15, Southern Baptist Theological Seminary announced it will reduce its administrative staff by 35 positions (20 full-time and 15 part-time), effective Jan. 30, but that no faculty members would be released. The downsizing, combined with $1.7 million in travel and other budget cuts made in December, are designed to close a projected $3.2 shortfall in the seminary’s $30 million budget. Tuition for the 2009-10 academic year will increase by just under 10 percent according to current projections, akin to the tuition increase for the current academic year. Work will continue on capital projects that already have been contracted and funded, but no new projects will begin until economic conditions improve.
On Jan. 8, NAMB President Geoff Hammond asked NAMB team leaders to operate at 90 percent of their approved budgets during 2009. However, Hammond said funds committed to God’s Plan for Sharing (GPS), the denomination-wide evangelism emphasis, would not be affected. State cooperative budgets also will operate according to normal state funding practices.
Southwestern Baptist Theological Seminary in Fort Worth, Texas, announced Dec. 16 that it will be cutting its budget by approximately 10 percent, or $3.5 million to $4 million. Among reductions being made to the budget are “temporary suspension of many overseas travel programs and adjustments to campus facilities.” SWBTS President Paige Patterson was quoted in a seminary news release as saying, “The administration is doing the best it can to find ways to cut spending that do not involve the release of existing faculty or the students employed by the school.” The news release then stated that Patterson “went on to say that current economic trends would make this goal difficult to achieve.”
On Dec. 10, Woman’s Missionary Union announced it was enacting measures to reduce its 2009 budget by $1.4 million. Some of those steps included reducing team expense budgets in areas such as travel, projects and activities; implementing four weeks unpaid furlough for each staff member between January and August 2009; a hiring freeze on vacant positions; reducing employer contributions to retirement plans; freezing merit pay increases; and eliminating incentive bonuses in 2009. The organization’s revised budget for 2009 is $9.6 million.
On Aug. 1 of last year, LifeWay Christian Resources President Thom S. Rainer told employees the ministry was reducing its workforce by 5 percent and cutting expenses throughout the organization. He cited the pinch of economic tough times leading to lower discretionary spending by consumers, resulting in lower-than-projected revenues for LifeWay, which receives no Cooperative Program support and is completely funded through the sale of its resources. Those whose jobs were deleted received severance pay, some benefits and outplacement services. In addition, a number of employees were able to take advantage of retirement benefits.
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Compiled by Baptist Press editor Art Toalston.
