The World Council of Churches (WCC) is facing a "serious financial situation", and "drastic action" is needed to achieve a balanced budget for 1997, according to the organisation's General Secretary, Konrad Raiser.
The financial crisis has already resulted in some job cuts at the WCC's headquarters in Geneva and may affect the programmes and services of the WCC, which is the world's biggest ecumenical organisation, with a wide range of dialogue, development and aid programmes and services.
At the beginning of this year, the WCC had 276 staff members. Because of the financial crisis, the equivalent of about 42 staff positions are being cut.
In a letter released to member Churches with the WCC's 1995 financial report in July, Dr Raiser states: "Income is no longer sufficient to pay for the present activities in which the Council is engaged."
Pointing out that the WCC's finance committee and its governing body, the central committee, require balanced budgets for 1997 and subsequent years, Dr Raiser says: "I am taking active steps to review both the programmes and services of the Council, and to bring them into line with anticipated resources." Sadly, he says, more staff cuts are needed.
A 1995 financial report shows the WCC's total income in 1995 was 80.4 million Swiss francs (US$63.8m), 9.3 million less than in 1994. Expenditure for 1995 was 101 million Swiss francs, compared to 114 million in 1994.
"We are seeking contributions immediately for our Staff Restructuring Fund to help us meet the cost of providing a proper separation package for staff who are having to leave ..." Dr Raiser says in his letter. About 2 million Swiss francs (US$1.58m) are needed, he says.
"Secondly, we are asking all member Churches and supporting organisations to make a very special effort to increase their regular, general (undesignated) contributions to the Council from this current year."
One of the WCC's sources of income - membership contributions by Churches - amounted to only 6.27 million Swiss francs in 1995. The contributions - which fund the WCC's administration and services - need to reach at least 10 million a year "if the Council is to be able to maintain anything like the services the Churches and agencies have come to expect of it", Dr Raiser says.
Explaining the financial causes of the WCC's problems, Dr Raiser says that after "encouraging results" in the early 1990s, the council, like many other organisations, suffered a reversal of its financial situation in 1994. This was largely a result of general economic conditions, a very strong Swiss franc and because some funding partners were themselves "finding times difficult" financially and had to freeze or even reduce their support.
"A year ago, we thought that we were in one of those periodic fluctuations which would correct itself before long." This has not been the case as the decline in income has continued and by the end of this year, despite strict expenditure control and savings, the general funds and reserves available will have been used up."