Report of the Trustees
At the Fourth Presbyterian Church Annual Congregational Meeting on February 8, our Treasurer, Mark Hurley, shared encouraging news about the church’s finances. He reviewed our 2025 results, the 2026 budget, and several key financial decisions made by the Boards of Trustees and Session. Overall, he reported meaningful progress and a much stronger financial position for Fourth Church and its affiliated ministries.
Two years ago, the Trustees and Session adopted a plan to eliminate a $2 million annual operating deficit by the end of 2027. In 2025, we took a major step toward that goal, reducing the Church’s deficit to an actual deficit of ($128 thousand) from a budget of ($661 thousand), a notable 81% improvement. Pledged contributions increased by an inspiring 21% over the prior year, the Draw from Invested Funds rose, and overall Disbursements declined.
In 2025, Invested Funds grew by 15%, in line with the market. The Draw now accounts for over a third of our revenue, up from 25% five years ago. This underscores the importance of sustaining and growing our endowment to support our church's growth, as advocated by the Legacy Society. Larger donations and gifts from estates may be donor-restricted or unrestricted, and their disposition is governed by the Gift Acceptance policy of the Trustees. Our long-standing policy is to draw 5% of the three-year average value of invested funds, which aligns with widely accepted best practices for non-profit organizations.
Expenses in 2025 came in nearly 5% below budget. This reflects careful expense management by staff, along with more staff vacancies than originally anticipated. Any remaining operating shortfalls through 2027 will be covered by the $1.8 million Transformation Fund, established in 2023 to address expected deficits and support restructuring costs.
Chicago Lights fully covered its direct costs and ended the year with a 10% surplus over Disbursements, providing resources to support future growth. All other affiliates and capital projects were fully funded. On a consolidated basis for all Fourth Church entities, total 2025 revenues exceeded total disbursements by 1%.
Looking ahead to 2026, the budget assumes more modest growth in contributions following the particularly large increase in 2025. At the same time, it benefits from a higher draw on invested funds, reflecting strong recent investment returns. Expenses are budgeted to increase by 7%, highlighting the continued importance of careful expense control even as we invest in digital ministry, communications, and technology.
In addition to regular operating expenses, the 2026 budget includes $1.1 million for facility improvements. The space formerly used by the Replogle Center will be repurposed for office space. Planned work includes continued tuckpointing and masonry repairs, HVAC system repairs, restoration of an additional Frederic Clay Bartlett panel in the Sanctuary, and addressing water leaks near the Delaware entrance.
As part of the pastoral search process last summer, the church decided to provide a housing allowance for our senior pastor rather than to continue owning a pastoral residence. As a result, the Walton Street apartment was sold, generating net proceeds of $920,000. Since the apartment had originally been purchased with investment funds, the sale proceeds have been returned to the investment portfolio for reinvestment.
We are deeply grateful to the congregation for its generous financial support and to the staff and volunteers who steward these resources so carefully. Thanks to this collective effort, Fourth Church has made substantial progress toward financial sustainability. While a small operating deficit remains, we are well-positioned to move beyond a period of transition and into a new season of growth and expanded opportunity.