Recessionary forces had struck the financial markets, and other setbacks to the world economy brought both a loss to the WCC’s portfolio and a reduction in the capacity of WCC member churches and supporting agencies to lend substantial assistance. Even so, it was the WCC’s hope to move through the coming three years with diminishing deficits before breaking even in 2004. Further disruption brought about by the 11 September attacks on the World Trade Center and the Pentagon, together with the markets’ reactions to those events, eliminated any hope of reversing the downward trend of WCC finances in the immediate future.

By 31 December unaudited financial results for 2001 indicated a deficit of 6.6 million Swiss francs, or 5 million Swiss francs more than expected. Konrad Raiser, general secretary of the WCC, was to explain the deficit to the Council’s constituency in a letter dated 12 March 2002. He wrote, “This (deficit) is due to three principal factors: a loss of 2.7 million Swiss francs on investments and currency exchange, a decrease of 1.7 million Swiss francs in contributions from member churches and funding partners, and an additional expense of 600,000 Swiss francs for early retirement packages to achieve long-term reduction in staff costs. With this deficit, the general reserve is exhausted, and a negative balance could only be avoided by making a one-time transfer from the building reserve. As a consequence, the WCC has begun to encounter some problems in its cash flow, as at the end of 2001 there were no longer any readily available liquid assets.”

WCC leaders moved to address the immediate crisis while also developing strategies to continue the life of the World Council of Churches on a sustainable basis in the years ahead. Since selling remaining investments in a down market seemed unwise, World Council leaders decided near the end of 2001 that the best way of handling transition through the adjustment period would be to take out a mortgage on the WCC’s headquarters building, the Ecumenical Centre. Earnings from WCC investments in future years will be designated for use in paying off the mortgage.

Early retirement packages were offered staff over the age of 58, and further steps in staff downsizing were planned for 2002. As 2001 drew to a close, an estimate of the total financial impact from staffing changes had not been made final.

“Unless we are able to identify new, non-traditional sources of income,” observed Raiser, “the WCC will no longer be sustainable in the manner it has been in the past. New sources of income will include foundations. The WCC has approached some of them about the possibility of getting grants for parts of the Council’s programme. The WCC member churches would still be expected to pay for our core administrative structure, but outside sources might be persuaded to cover the costs of such programmes as, for example, one addressing the HIV/AIDS crisis in Africa.”

Raiser continued, “As a Council, we must realize that the recent decrease in income from traditional sources is not a passing event. These sources are no longer adequate to support the WCC in responding to the expectations of our churches. Nor can an investment portfolio be regarded as a reliable source of income; that is surely an important lesson of the past year. We must rebuild our financial position in a way that will avoid having the budget pulled down by a drop in the value of our investments. So the challenge for the WCC over the next three years will be to consolidate our operations within a reduced financial framework. In the period from 2003 through 2005, we should have established a profile of staff and programme that can be sustained on a realistic projection of regular annual income.”

A staff self-evaluation had been planned for late 2001 and early 2002, reviewing the progress of the WCC at the mid-point between the Harare assembly of 1998 and the ninth assembly in 2006. Now a strong planning component was added to the process, defining core activities of the Council and projecting a revised institutional profile for 2003 through 2005. As it had been for every year since its creation, the WCC in 2002 remained a work in progress.