Finance
Newsletter
Previous Editions
Reminder!
The Long Term Disability coverage is currently being reviewed. Stay tuned for further information, we expect there to be a premium increase.
New budget line item on your budget for work funds – see article.
This newsletter is also published on the GMC for your future reference as well. We know that you have so much going on and that keeping up with what is happening in Finance may be another item on a never-ending task list – thank you in advance for taking some time to read these announcements and for the important work that you do every day. Our hope with sending this to you is not that you become an expert in all WV financial matters, but that you are informed of changes and know where to turn if you need help. It is our pleasure to serve alongside you!
February 2023
Now that we are officially past the midpoint of the fiscal year, I want to provide a brief overview of our financial results through December 31, 2022
The results to the right represent the entire organization including worker, field, and headquarters sectors which are the three major subgroupings by which we track our activities. As you can see, we are reporting net income of $750,473 year-to-date through December 31, 2022 (by comparison, last year we had approximately $3.78 million in net income). Compared to last fiscal year, our income is approximately $1,500,000 lower and our expenses $1,500,000 higher. That is not necessarily a good combination (a double whammy really!). In many ways, though, I think that these results reflects more of a “return to normal” from the past two years. Despite this double whammy, if I were to color-code our financial picture this year (which I actually do every month) – as either green (good), yellow (cautious), or red (danger) – I would give us a “yellow” flag” and I am cautiously optimistic.
What is not normal or consistent with our 10-year trends, and gives me caution, is that we have seen an average decrease of $250,000 in our normal monthly contributions this year. We know this decrease is mostly from our partner churches and has impacted our workers the most because we see workers using more reserves this year. While we do not know exactly why giving is down, we have indications that the decrease is due to the greater economic pressures (inflation, slow economic growth and recovery, recession) that our donors and partnering churches are experiencing. Anecdotally, some churches have shared that they are adjusting their budgets down because of the economic impact on their congregations. If we apply this across half our church partners, we can easily come up with some explanation of the decrease. Another factor is that we have 10 less workers this year compared to last year and we know that that can account for a certain portion of our decrease in giving.
“…if, I color-coded our financial picture this year… I would give us a “yellow” flag” and I am cautiously optimistic.”
What is more normal for us this year is our organizational spending, which has ticked back up to pre-Covid levels or even exceeds that in some months. This seems to reflect the release of the “pent-up” demand due to the past two years’ lock-downs. In other words, I believe our ministry spending has increased this year because we can actually get out and do ministry now. This is good and the spending pattern that we see reflects a normal rhythm of how we operate in that we usually have a period where we raise funds and then spend it. I am cautious about this spending, but I am confident because we have worked hard to implement internal spending controls and checks and balances in our processes to ensure that we do not overspend unless it is within our policy constraints and has appropriate oversight.
I am optimistic because God knows exactly where we are. I do not want you to think that is an obligatory statement – behind it is the knowledge that our Father knows we are working hard to ensure our financial integrity, getting better at what we do, and seeking to grow his Kingdom. I do not presume to have a formula for success, but I believe that the aforementioned factors are important in God’s economy and that our Father has an interest in the success of our mission. As we apply godly principles to our organizational finances and exercise faithfulness with what has been provided, we will continue to see the fruit that we desire around the world. I am also optimistic because we have seen similar financial patterns before and the Lord has seen us through those “peaks and valleys”. The graphs below show other perspectives on our income this year. In the graph on the left, you can see that we experienced a similar decrease in giving in fiscal year 2021 and we saw the Lord provide in amazing ways. And in the graph on the right we see that this fiscal year is following a similar pattern that we see every year.
We can use the experience and wisdom from the recent past and apply our experience to make better decisions and move forward confident in God’s provision.
In closing, I have been studying Proverbs 3:5-12 the past few months and trying to apply its many principles to my personal life as well as the financial ministry here at WorldVenture. This passage starts out… “trust in the Lord with all your heart” and it resolves with a reminder that He reproves those whom He loves because of His delight in them. It is a passage that is easy to study and memorize, but I am only transformed when I apply these principles and I allow them to impact what concerns and makes me anxious. The Lord gives us all opportunities to apply our “trust” every day and that is true in the financial ministry at WorldVenture and one that we have been diligently trying to practice this year. I look forward to the rest of this fiscal year because our God is trust-worthy, He provides the resources and wisdom we need and I am confident that God will continue to bless, grow, and shape WorldVenture.
Sincerely,
Luke Oravec
Treasurer
Soraya Marin, VP/Chief Operations Officer
Luke Oravec, Treasurer
Fabian Perea, Assistant Treasurer,
Christina Segura, Senior Staff Accountant – Europe/MENA, Americas
Dan Penney, Staff Accountant – Africa, Asia
Madeline Shanley, Receipting Manager
Becky Binuya, Receipting Staff
Open Position, Donor Receipting Specialist
Ryan Volz, Accounts Payable Manager
Renee Chase, Accounts Payable Staff
Belinda Viescas, Payroll Administration & Compliance
Open Position, Finance Assistant
2023 Disbursement Schedule, Find in GMC in Knowledge Tab → FIN.UG.05.15 2023 Disbursement Schedule
Expense Categorization Listing, Find in GMC in Knowledge Tab → FIN.UG.05.12 WV Expense Categorization Listing
Expense Reimburse & Payment Form, Find in GMC in Knowledge Tab → FIN.UG.05.12 WV Expense Categorization Listing
Ministry Funds (Work Funds), Find in GMC in Knowledge Tab → FIN.FORM.07.01 Ministry Funds Request Form
With many Global Workers switching over from receiving advanced Work Funds to only submitting reimbursement requests as needed, we have decided to add a new line to the budgets to help both you and us manage that.
Until recently, budgeting for routine ministry expenses has been done with the single budget line called “Work Funds (Advanced).” Late last year we did add a new line called “Field Assessment” to allow tracking of Work Funds that went directly to the worker’s field to contribute to a pooled field budget or for field administrative expenses. This was needed so that those for whom all their Work Funds went to field administration could opt out of having to complete the quarterly Work Funds reports.
To visualize this, consider a scenario where a worker traditionally had a single line in their budget for $400 in Work Funds. However, $120 of that went directly to their field for a pooled budget, another $180 is advanced into their ministry bank account by direct deposit to cover regular monthly expenses, and the final $100 remains in their USF for eventual requests for reimbursement. In such a situation, we can now budget separately for each of these types of ministry funds, such as:
| Field Assessment | $120.00 |
| Work Funds (Advanced) | $180.00 |
| Ministry Savings for Reimbursement | $100.00 |
We hope you will find this more understandable as you manage your budget for ministry expenses. It will assist us in making sure we’re sending those funds to the right locations, and it coincides better with the Ministry Funds Request form that we began to use last year.
The time to begin preparing tax returns is fast approaching.
We are pleased to announce that Lois Huston will again be providing tax prep services for our missionary community this coming 2022 filing year. As a reminder, this service is covered by WorldVenture as part of your Tax Equalization fees and we highly encourage all of our eligible workers to work with Lois and benefit from her service and expertise.
Lois will contact our Global Worker community as well with instructions so she can prepare your return(s). When you receive an email from Lois please remember that she is the CPA that WorldVenture contracts with for our worker’s tax returns! Your attention to those communications will help ensure a smooth and effective tax season for everyone.
We also want to remind you that we have information available on the GMC to assist you in understanding the process and some items that may be on your tax return especially if this is your first year with WorldVenture. Please look up the following documents to understand more about this service we offer:
➢ FIN.POP.2016.005 – Global Worker Personal Taxes Procedures
➢ FIN.UG.07.01 International Worker Personal Tax FAQ
Should you have questions about this coming tax season, please address your inquiries as follows:
A question that often comes up this time of year is, “what is the Housing Allowance?” This is a great question because housing allowance is something that impacts every open and set assignment worker’s paycheck as well as their personal tax return. This article will clarify, at a high level, what housing allowance is, how one qualifies for it, and how WorldVenture oversees housing allowance.
Before going too much further, it is important to note that this is a complex area of taxation and one that not every CPA or HR department understands unless they work with it every day. This article is not meant to constitute tax advice or consultation and does not describe the personal tax filing requirements for the housing allowance. We recommend that you work with Lois Huston or your CPA to understand the personal tax implications of the housing allowance in your personal taxes and finances.
The simple answer to this question is that housing allowance is part of the compensation that is paid to a minister (see below). This part of compensation is not subject to federal income taxes which can save money when it comes time to pay personal taxes. Normally, the compensation for a person who is eligible for housing allowance will be divided into two parts, one for housing allowance and the remainder to “regular” salary. For example, if Minister Smith’s compensation is $100 per year and $25 is housing allowance, then $75 is his regular salary. At WorldVenture, we approach this a little differently with our global workers, but the principle is the same. At WorldVenture, your housing allowance is in addition to your other salary amounts in your budget. Using the same amount for housing allowance, let’s assume that your housing allowance is $25 and your other salary items in your budget add up to $125, then your total compensation at WorldVenture is $150. We approach housing allowance this way because we currently have a needs-based salary model. In this example, the $25 could be excluded from reportable income on your tax return.
In order to qualify for housing allowance, a worker must be classified as a minister which means that they meet these criteria:
There are many steps involved with the entire housing allowance process, but to keep it simple, we have broken this down into three main steps.
It all starts during appointment where Partner Ministries works with a worker’s sending church and receives a document called the “Certificate of Assignment”. WorldVenture does not ordain, license, or commission a worker, but, rather, the sending church commissions the worker. The certificate of assignment formalizes a connection between WorldVenture and the sending church where the church affirms the worker’s call to ministry and assigns the workers to fulfill their ministry work under WorldVenture. This step is important in WorldVenture’s efforts to partner with sending churches as well.
The next step in the housing allowance process is that the worker must calculate and request their housing allowance using the housing allowance form (FIN.FORM.06.02 Annual Housing Allowance Request Form). This form is part of our standard operating procedure and is required for a worker to receive a housing allowance initially (even during appointment), when a different housing allowance amount is needed from their current amount and needs to be completed on an annual basis.
There is more that can be said about this topic, but hopefully this article has clarified the big picture of the housing allowance and how it is administered at WorldVenture. If you have more questions regarding housing allowance, please send an e-mail to financehelp@worldventure.com with “budget” in the subject line.
We are pleased to announce an expansion of benefits under the policy for the Tax Equalization Fund. Effective after December 31, 2022 and for tax years ending after December 31, 2022, benefits from the tax equalization fund will include claims for the following:
Please review the policy document called, “FIN.POL.2018.004 Tax Equalization Fund Policy” found on the GMC Knowledge for more details.
Hello again from the Spousal Compensation Implementation Team! Our task is to implement the GO Team directive to facilitate paying/compensate ALL appointed WorldVenture global workers that desire to receive compensation. At this time, only one member of a couple/unit is paid or officially designated as a global worker.
In early November, the team determined that an important step in the process was to seek input from a segment of global workers on the compensation model being considered. Accordingly, we created a survey and conducted focus groups via video calls in December.
We are so thankful to the 19 global workers from across each of our regions that completed the survey and took time to share their thoughts with three of our team members in these online meetings! Some of the questions that we asked dealt with whether the proposed model was understandable, how they felt about the change/model, what questions or concerns they had, and was our Implementation Team meeting our stated outcome goals with the proposed model and accompanying material.
Other issues that were discussed were how these changes could impact global worker visas, social security, totalization, and whether there would be the option to opt in or out of both spouses receiving compensation.
A major theme in each focus group was the recognition that the move to financially compensating all global workers is only one piece of a larger cultural change that needs to be prioritized in WorldVenture, primarily finding ways to recognize and ensure the visibility of each global worker, especially those who have traditionally been marginalized. Implementing an appropriate spousal compensation model is an important starting point in this process.
Again, we are grateful for the opportunity to serve you through this spousal compensation implementation project, and we look forward to sharing more updates with you in the months to come.
Tax Season will be coming up – as a reminder WorldVenture provides U.S. Federal, State, and FBAR tax preparation services for you.
Information contained in this newsletter is intended for internal use by WorldVenture workers, staff, approved volunteers, and board members. Unauthorized distribution to other parties is not permitted without permission from Finance leadership.