As our fiscal year draws to a close, I’ve asked Burnet Tucker, chair of the MRA Board of Directors, to share an update with you.
I have the privilege of serving as Chair of the Board of the Mountain Retreat Association (d.b.a. the Montreat Conference Center). Over the past several months, I’ve been asked about how the MRA is weathering COVID financially as well as how the proposed lodge fits into our bigger financial, hospitality, and programmatic picture. As the MRA prepares to close its books on April 30 (the end of our fiscal year), I thought it would be helpful to share an update with you.
Our board is a diverse group of 27 people that includes sixteen cottagers, thirteen pastors, and several who have come to know Montreat primarily though the conferences and programs that they experienced or led. Representing many paths to Montreat and many voices, board members are united by a love for Montreat as a place for the transformation of God’s people. Part of our board responsibility is to ensure we have sound financial resources to support our ministry, both now and for the future. Here are some of the questions I’ve received and the responses.
How is the MRA doing financially? The MRA balance sheet will end the 2020-21 fiscal year in as good financial shape as when the year began. Montreat donors responded generously this year in numbers and in dollars, we received some nice estate gifts, and the Paycheck Protection Program played a significant role as well, providing one loan which has already been forgiven and another loan likely to be. Also, the staff did a wonderful job in managing very frugally, working very hard, and sacrificing in many ways (including financially). Finally, the MRA’s endowment benefited from the rising market, and its portfolio value reached $19 million in April.
What about operating? The fiscal year will end with a projected operating deficit of around $500,000. Board members and staff met regularly throughout the year and communicated well, so the deficit wasn’t a surprise. In fact, the board made a couple of decisions at the outset of the pandemic that were in the long term best interests of the ministry but contributed to this year’s deficit.
Such as? We urged the MRA leadership to stay open and keep serving our mission rather than go into a financial hibernation, which might have saved money but would have cost us the ability to reach people and do our ministry this year. We stood by the MRA employees rather than think about layoffs; we wanted the staff to be ready to ramp up again as soon as conditions improved. Those investments ended up being covered to some degree by the PPP loans, but not entirely.
Where did you get the cash to operate? In addition to the PPP loans and gifts, we had reserves on hand. Since 2004, the board has prioritized the importance of building cash reserves, setting aside some portion of operating surpluses each year in order to be prepared for surprises like this past year. We eliminated our need for seasonal borrowing in 2016 and continued to fund two board-designated reserve accounts, which totaled about $400,000. We turned to those accounts first.
What other steps did the board take? In September, we authorized the staff to access an additional $750,000 in board reserves that had been established in 2004 with proceeds from the conservation easement. Ultimately, we didn’t have to access those funds, another sign of how we were able to effectively manage our response to the pandemic.
Where does the proposed lodge fit into all of this? The need for the lodge is not related to the pandemic. The necessity for the lodge came from a process that began years before the pandemic. Most church retreats that we host come on the weekends, and we currently have very little availability during those times. The lodge is an important part of enabling the MRA to continue to deliver its mission through programming and hospitality and ensure that we are welcoming all of God’s people to Montreat not just for the short term, but for years to come.
Why did the board move forward on the lodge during the pandemic? That was the third big decision the board made last March. Don’t postpone the future – keep moving forward! We had restricted funding available to develop a plan, and we wanted to know if we could raise funds to support it. People who think the lodge is a response to the pandemic are mistaken; lodge planning moved forward despite the pandemic, not because of it.
That’s our role: balance between the short-term needs and the long-term health of the conference center. Short term, the next five-to-ten years for the conference center will be strong. We’ve built up some very positive momentum since 2004, and that helped carry us through the last year. And the lodge will provide some immediate benefits, but it’s a long-term move to help us improve facilities by providing welcoming and accessible housing and enabling a more robust offering of programs. We’ve got to do that to continue to build for the future and ensure that we have a solid financial footing for future generations who want to experience all that Montreat has to offer.
What lessons will you take from this year as a board member? We learned that unrestricted cash reserves are absolutely essential if the MRA is to respond to immediate issues and maintain a long-term vision at the same time. Over the next year or two, we’ll prioritize replenishing these reserves as a goal. We learned that our faith in our donors was well-placed. Our donors supported us even at the very beginning when the market was falling and things looked their worst. And yet, I venture to say that if this past year has taught us anything, it’s that we must be able to adapt and embrace change if we are to continue to grow and prosper. That’s probably the most important lesson of all.
Burnet Tucker
Chair, MRA Board of Directors
We look forward to seeing you in Montreat very soon. Stay tuned for updates as we approach the summer.
Richard DuBose
President
Montreat Conference Center