Used by permission of Laurence Skermer, pbase.com
A long-term missionary family in South America had been experiencing a serious decline in their buying power due to a much lower than normal exchange rate between the weakened U.S. dollar and the Brazilian Real. In a belt-tightening mode and a bit discouraged, they nevertheless determined not to seek help from their sponsoring congregation in the United States
The church, however, discovered the variance when they studied the missionaries’ financial reports and action was immediately taken to relieve the financial pressure (Ross, 2012). “After all,” the church reasoned, “these are our missionaries and we need to take care of them.”
The caring response of this congregation is admirable and should be the norm for all churches who agree to steward the expansion of God’s worldwide kingdom, but like ocean tides it is not easy to master the shifting tides of exchange rates.
Ocean Tides and Their Financial Counterpart
Tides crest and ebb at different times daily, depending on the position of the moon. Similarly, many factors contribute to the ebb and flow of exchange rates. Take the Chinese yuan, for example. For many years the Chinese government pegged their currency to the U.S. dollar, but in July 2005 they began letting the yuan float in the world currency market and, because of the trade imbalance between the two countries, the dollar fell in relation to the yuan (Wikipedia).
Tides differ from region to region. General Douglas MacArthur battled against 29-foot tides in his landing at Inchon at the outbreak of the Korean War (Hunt, 457), but Singapore, nearer the equator, has only 9-foot tides. In the same way, inflation and exchange rates vary from country to country, depending on their economic and political situations.
Fluctuations in tides affect people all over the world. Whether one is a sailor, surfer, beachcomber, fisherman or seafood lover, tides influence our lives. Tides determine when ships can come into harbor or leave, when the breakers are at their peak and when the fishing will be most profitable. In much the same way, fluctuations in the value of a country’s currency affect not only every financial issue within its own borders, but also influences the world economy.
Principles for Coping with the Ups and Downs of Exchange Rates
So how can churches better steward their mission dollars and the missionaries they support? We asked that question to church leaders from more than 20 congregations who attended two Missions Leaders Luncheons earlier this year in Fort Worth and Dallas, TX. Here are their suggestions for maintaining equitable missionary compensation despite the changing tides of exchange rates.
1. Take Care of Your People. You are stewards of the missionaries God entrusts to your care. They are willing to sacrifice for the sake of the gospel, but do not let them suffer needlessly. You are in this endeavor together, so if a special need arises, share the burden with them.
2. Trust in God and His Undiminished Resources. Remember that the issue is God’s resources, not our economy. He still owns the cattle on a thousand hills. Therefore, step out in faith and prayer. Realizing all the assets God places at your disposal, your objective in kingdom matters should be to thrive, not just survive.
3. Practice Good Stewardship. Encourage sacrificial giving because it honors the Father, blesses the givers and enables the missionaries. Contrary to a common myth, churches across the land have discovered that missions giving does not take away from the regular church budget; in fact, the opposite is usually the case. Churches are also learning that people seem to respond more sacrificially during down times.
4. Be Proactive. Keith Alexander of the Legacy Church of Christ in North Richland Hills, Texas states that they build into their missions budget a contingency fund of ten percent to allow them to respond to special issues such as changes in exchange rates and inflation. Numerous congregations have such reserve funds for handling this kind of eventuality, but few churches have policies that define when and how they will respond to the economic changes. Your policies might look like these:
· Review and possibly adjust the base salary of our missionaries after they have been on the field for six months.
· Stabilize the buying power of our missionaries at plus or minus five percent of their base salary.
· Make adjustments if the exchange rate increases or decreases by more than five percent over a three-month period.
5. Track the Exchange Rates. Charles Ross, a former missions committee member at the Highland Oaks Church of Christ in Dallas, is a software engineer with a side interest in finances to help missionaries. He suggests that someone at the sponsoring church should be tracking the exchange rate monthly. Gilbert Yarbrough, business manager for the missions committee at the Saturn Road Church of Christ in Garland, TX, has done that and more by compiling 365 days of daily exchange rates for the 22 nations where Saturn Road is providing major missionary support. Gilbert has a master’s degree in mathematics and more than 30 years’ experience as a management consultant and financial analyst. Not every congregation will have someone with Gilbert’s background, but all churches could at least do the following:
· Monitor exchange rates by consulting a free online service like Oanda (www.oanda.com/convert/classic)and average the monthly rates for the last quarter.
· Using the base salary, calculate your missionary’s salary in the national currency over those three months.
· Compare the 90-day average with the base salary and, if it exceeds the plus or minus five percent, make the necessary adjustments.
· You might also monitor inflation rates by using such sites as Global Rates (www.globalrates.com/economic-indicators/inflation/inflation.aspx).
· Or you could save yourselves a great deal of work by using such services as Xpatulator (www.xpatulator.com) who provide reports that calculate both the exchange rate differential and the inflation in the missionary’s host country. The cost is $99 per report and we recommend that churches purchase one report per quarter.
6. What Goes Up Must Also Go Down. If stabilizing your missionaries’ compensation at plus or minus five percent of their base salary requires you to increase their compensation when exchange rates and inflation are unfavorable, then it stands to reason that when the financial picture is rosier you will decrease that compensation to maintain your target of plus or minus five percent. In other words, you will need to adjust the salary for both the bad times and the good.
7. Maintain Good Communication. Dale Johnson, an elder for 35 years with the Buckingham Road congregation, believes in first-rate communication. He has traveled abroad for 20 years as part of the church’s missions program, but became aware of the effect of exchange rates only five years ago when one of their missionaries told him of the adverse effect of lower exchange rates. He now believes church leaders must listen carefully to their missionaries.
First-rate communication between the supporting church and its missionaries is especially vital in a situation where salaries are lowered as well as raised.
Churches that practice these seven principles will enhance both their fiscal stewardship, as well as the stewardship of the missionaries in their care. And remember, God blesses churches and individuals who practice good stewardship—“For everyone who has will be given more, and he will have an abundance” (Matthew 25:29).
Hunt, Frazier. 1954. The Untold Story of Douglas MacArthur. New York: Devin-Adair.
Dale Johnson. Telephone interview, March 27, 2012.
Charles Ross. Telephone interview, March 24, 2012.
Gilbert Yarbrough. Telephone interview, March 26, 2012.
________. Email to Bob Waldron, March 24, 2012.
Wikipedia. The Free Encyclopedia Anyone Can Edit www.wikipedia.com. Accessed on March 27, 2012.