Paul Goodyear is the territorial finance secretary. Under his leadership, the finance department supports the mission of The Salvation Army by delivering quality accounting and financial reporting services, providing strategic business advice, ensuring prudent management of the organization's investments, and promoting excellence in financial management and Christian stewardship. Paul recently spoke to Salvationist.ca about the financial health of the Army.

Recognizing the importance that investments have on The Salvation Army's financial stability, how are we responding to the current market volatility?

For a number of years now, we have followed a strategy of spending our investment income based on a long-term expected rate of return, rather than what has been earned in a particular year. This strategy allows us to place funds earned above the long-term rate in a reserve to be used to fund our operations in years when the earnings climate is less favourable. The long-term rate used in the spending policy is derived from assumptions concerning such factors as the expected rates of return for fixed income and equities and inflation. Over the past 10 years, our investment returns have varied from a low of -10.6 percent to 25.2 percent. Our spending policy calls for us to spend 6.1 percent per year. So, in the years of above-average returns, we are able to put funds aside to help us in years when returns are below average, somewhat akin to Joseph's approach to dealing with the seven years of plenty and seven years of famine in Genesis 41.

What percentage of our operating budget comes from public donations? Can we expect to see a decline in our resources due to the economic situation? How will this affect the day-to-day operations of the Army?

Currently, about 30 percent of the Army's $600 million operating budget territorially comes from public donations. At this point, it is difficult to project what the impact will be on our resources as a result of the economic situation. What we are seeing to date is that our donations are roughly in line with last year, except in the area of gifts of securities, where we have some evidence of a lag, which we believe to be a result of the situation in the capital markets. Depending on how long the current economic turmoil continues, we may see a decline in donations overall. If so, this will have an inevitable impact on our operations just at a time when our services will be challenged to meet greater needs as a result of the situation people are facing in their own finances.

What measures are in place for financial accountability within the Army? How do we ensure that money is going to the right places?

The Army's financial systems are strong and rely on a variety of controls to ensure funds are allocated based on the donors' wishes. First, we have a strong internal-controls regime throughout the Army's financial system, with appropriate policies to govern financial management. External and internal audits (both by the territory and International Headquarters) help ensure that these systems are well designed and working as intended.

In addition, the Army is subject to regulatory oversight by the Canada Revenue Agency, the office of the Public Guardian and Trustee, and other organizations that have an interest in ensuring that charitable organizations serve the public interest appropriately. The Army was one of the first adopters of Imagine Canada's Ethical Code program, which ensures that we are complying with high standards of financial management and accountability.

Finally, the Army publishes an annual review and audited financial statements in order to demonstrate its accountability for the funds it receives.

How well do Salvationists financially support the work of the Army?

Unfortunately, this is an area of challenge for us. While it varies from corps to corps, and from Salvationist to Salvationist, the reality is that most Salvationists do not financially support the work of the Army very well.

Contributions from members amount to about 52 percent of the operating budget of the average corps. This means that most corps are dependent on other sources of income to balance their budgets, most notably from the operation of thrift stores, special events and rental of corps property to outside groups.

In addition, Salvationists are not, as a rule, as generous as the public at large in supporting the Army's social services. The Army receives over $40 million per year from bequests, however, in my experience, few Salvationists remember the Army in their last will and testaments.

Finally, and most disturbing, the territory as a whole is giving less to the international Self-Denial or Partners in Mission Appeal than we did 20 years ago. Nine Salvation Army territories, including us, contribute 90 percent of the funds needed to maintain the Army's work overseas, so the contribution of the Canada and Bermuda Territory is important.

What percentage of corps are self-supporting? How do we encourage Salvationists to think more concretely about financial concerns?

At present about 70 percent─or just over 220 corps─are self-supporting, compared to just over 100 a decade ago, which is a significant improvement. At the same time, there is still a great need for Salvationists to “put their money where their mouth is” in terms of their support for the Army and its ministry.

It seems to me that if we are to make a significant change here, we will have to forget about teaching and preaching about stewardship only when a corps is in financial difficulty, and make this a regular part of the program, both in good times and bad. We need to start young and include teaching about this subject in Sunday school, junior soldiers and the corps cadet curriculum.

We also need to do a better job of educating and informing Salvationists about what our needs are. Many corps still do not report to their congregations about the financial position of the corps and how they are doing. That is a fundamental flaw, in my view. It seems to me that it is not enough for corps to simply rely on members to contribute because they see this as part of their Christian responsibility. The corps also has a responsibility to be accountable for the decisions it makes about resources and how they are allocated.

How can Salvationists better contribute to the financial health of the Army?

First, be informed. Ask questions. Hold your leaders at all levels of the organization accountable for the wise use of resources. Learn about the Army's needs and consider how you may help.

Second, inform. Tell your friends and neighbours about the work the Army is doing around the world, and encourage them to give.

Third, pray about your own level of contribution and ask yourself whether you are giving as God would have you give, in accordance with your means.

We live in a culture obsessed with money. In your role as finance secretary, you could spend all of your time pouring over balance sheets. How do you keep things in perspective?

It is certainly true that much of my time is spent reviewing and interpreting financial information to help the organization make decisions, as well as to report to donors and other stakeholders about how we have fulfilled our stewardship obligations.

Interestingly enough, it's my experience that people who do not spend their time in the world of finance are often more obsessed with money than those of us who do. For me, money is simply a tool to achieve the mission of the organization.

It's also a means of evaluation. When I look at the financial information of an entity (whether it's a corps, social services centre, DHQ or THQ), I can tell a lot about what's really important, whether the particular ministry unit is really mission-focused, and to the extent it does what it says it does.

The key to perspective for me is to always keep the bigger picture in focus, and see the role of finance as simply one of the inputs we use to deliver the mission. It's an important input, but no more and no less important than other key inputs, such as program theory and models, human resource expertise and capacity.

What does the Bible have to say about wealth? How does it advise and encourage us in these days?

The Bible has a lot to say about money. In fact, there are more references to money than most other subjects.

The most important thing it says, in my opinion, is that there is no inherent worth or evil in money; it is what it is, and it only becomes good or evil because of how I use it, and my attitude toward it.

One verse that speaks to me particularly is found in Hebrews 13:5: “Keep your lives free from the love of money and be content with what you have, because God has said, 'Never will I leave you; never will I forsake you.' ”

Contentment is an elusive idea for most people. Money is one of the things that they seem to think will help them achieve it, but the truth is, true contentment can only be found in coming to terms with one's self, and in the knowledge that you are who God intended you to be and that he is with you.

There is the perception that the buck stops at THQ and that many program proposals don't see the light of day because THQ is unwilling to fund them. Do you feel that this is a fair sentiment? What principles are used to decide which programs should take priority?

This is really an inaccurate perception. Our funding model involves THQ allocating resources to divisions who, in turn, make decisions about funding individual programs. THQ actually does not make program grants to individual ministry units.

The other important thing to keep in mind is that Salvation Army funding from DHQs to ministry units, on average, accounts for about 11 percent of the operating budget. So, if a particular program cannot be implemented because of financial concerns, it is likely more about the ability of the ministry unit to obtain other sources of funding than it is about Salvation Army funding.

At the same time, it must be remembered that the territory as a whole, and individual divisions as well, are constrained when it comes to financial resources. There is a not a limitless supply, but there is a limitless list of needs and program ideas out there that ministry units would like to undertake if they had the means to do so. Divisions are faced with the reality that they simply do not have the money to fund everything that is presented to them. As a result, they have to balance the requests they receive with what they know about the capacity of the ministry unit to deliver, the degree to which the desired program fits with divisional priorities, as well as where they can get the “biggest bang for the buck” in terms of mission results.