The Task Force for Reimagining the Church has published its 73-page final report. The group took on a difficult task, waded through the work, and have emerged on the other side with a document that will now belong to the General Convention set to meet in July 2015 in Salt Lake City. It is up to the Bishops and Deputies to now roll up our sleeves and begin doing some work of our own to take up where TREC has left off. My colleagues Nurya Love Parish, Adam Trambley, and Tom Ferguson (aka Crusty Old Dean) have all blogged on this, offering helpful perspectives.
Change Already Underway
While I do agree with Crusty Old Dean’s appreciation for their biblical imagery and articulation of the big-picture issues, I don’t share his pessimism about where this will go. But his prophesy will prove true if we don’t use the present moment to begin the debate and start moving toward change. If we wait until we get to Salt Lake City, the restructuring revolution will falter and halt. But we have already seen how the Reverend Gay Jennings, President of the House of Deputies, has already shown how much progress can be made through the work she has done to make changes to the Rules of Order which should make the General Convention more efficient. And our Presiding Bishop and Chief Operating Officer have already made some helpful changes in of equal import through staffing decisions with no need to wait for the General Convention. And then there is what I believe to be the lever that moves the church, found in a two-line resolve on page 8 of the report:
- “Resolved, That the diocesan assessment percentage be lowered while making it canonically mandatory (with means for pastoral exception) for each diocese to meet that assessment.”
A diocesan assessment creates a real mandate in terms of budget dollars for our church-wide mission. This particular resolve is the technical fix that rules them all in a church needing adaptive change (as noted in the first 6 pages of the report). I currently serve in this triennium on the Joint Standing Committee on Program, Budget, and Finance (PB&F). I also serve on a diocesan staff that lived through reducing the diocesan asking while adding a canonical provision much like this resolve anticipates. So, I have a good vantage point to see how these two lines could be important.
The Current System
The Episcopal Church currently asks each of its 109 dioceses to give 19% of their respective budgets to fund the church-wide budget. Forty-seven dioceses give at that rate or higher. Thirteen give 15-19%. Twenty-seven give 10-15%. Eight give 5-10%. Eleven give 1-5%. Five dioceses do not give anything at all. The current median is 16%.
For full disclosure, I am the Canon to the Ordinary for the Diocese of Georgia and for the year this information is based on, my diocese gave 13.6%.
The Preliminary Draft Budget
In a bold and helpful move, the Executive Council’s Committee on Finances for Mission (FFM) posted its preliminary draft 2016-2018 triennium budget online for comment (comments may be made here). That draft gives some substance to the two-line TREC proposed resolution above. The current budget draft extends the exemption from $120,000 to $200k, meaning that dioceses are not asked to give on the first $200,000 of income. With that new exemption, nine dioceses would not be asked to contribute to the church-wide budget since their entire budgets are less than this amount.
The new asking anticipated in the preliminary draft budget will move to 18% in 2016, 16.5% in 2017, and 15% in 2018 if that proposal were to pass with no changes. This means that for the coming triennium, the budget would be based on income anticipated from an average asking across the three years of 16.5% while moving the The Episcopal Church toward a 15% asking for the next triennium. Since the income of The Episcopal Church is not limited to income from dioceses, that comprises just under 66% of the total income. For example, of the $111.5 Million budget for 2012-2015, the projected income from diocesan askings is $73.5 Million. Other revenue, including income from investments and rental income from the Church Center in New York, is projected to rise. That means the overall revenue would goes up $4.6 million across the triennium in this budget projection. But this increase in income is more than offset by expanding costs, the largest of which is the rising cost of benefits to our Church Center employees.
Whatever you think of the specifics, Clergy Deputy Susan Snook and Bishop Mark Hollingsworth and their committee have done a great service to the church in providing their working document for comment and for having the courage to lower the asking. Given that the budget processes of 2009 and 2012 were problematic.
Note the importance of their revenue projections, for any mandate not funded in the budget is likely to get no follow through. So once we set the asking and so the revenue side of the budget and follow up by setting staffing and the rest of the budget accordingly, ideas that seem vague suddenly get very concrete. At the core is our deciding what we need from the denomination that can’t be more appropriately done at other levels. While this can be done without reference to a budget, the budget numbers will hold more sway than any ideal.
One issue I do see with the projections in the current preliminary draft budget is that they assume that the dioceses giving below the asking will come up by 10 % a year. But since the current draft is based on an asking, rather than on an assessment, I don’t see how we can assume dioceses giving 1% or even 12% will make a move toward 18, 16.5 or 15 percent. Instead, I find it more productive to consider the actual giving pattern by each diocese. When that is done, it is becomes apparent how much the specifics matter. For example, some of those giving 19% have quite small budgets (such as Western Kansas with $172,437 and Alaska with $341,497 in 2013). Other dioceses give a far lesser percentage, but have much larger budgets (Texas at 10.9% on $6.5 million and Pennsylvania with 4.8% on $4.3 million in 2013). Such details matter a lot. The only way to truly generate realistic projections is to talk with diocesan bishops honestly about the asking in order to get a feel for whether those giving less than the current asking will be able to move up to any given new asking.
A 15% Budget
If this plan works, and we begin to move to a 15% assessment, where will this leave the churchwide budget? That would, of course, depend on how many dioceses are able to reach that level of giving right away. In 2013, the total income from dioceses after the $200,000 deduction was $173.4 million. This means that the highest possible income number (every diocese giving at the new assessment number) would be $26 million per year or $78 million for a triennium. This would be an increase of more than $4 million above the current draft income. But given that every diocese would not be able to move to this number in a single year, we need to adjust expectations.
If every diocese giving more than 15% dropped to that number at once and no dioceses below 15% increased their giving, the income would be $22.5 million or $67.6 million for the Triennium. This creates a worst case for the move to 15%. Actual experience would be somewhere close to the middle of the $67.6 million likely worst case and $78 million best case scenarios. We can not know without the diocese by diocese conversations, but a back of the envelope projection would end up cutting the churchwide budget by $3-4 million in the first year. The church would then see that number rise each year as the number of dioceses making their full assessment increases. Without the asking become an assessment, this option would result in more drastic cuts in revenue. If the “teeth” in the assessment are seen as not an issue for dioceses, then this move will still fall short of raising the revenue projected above.
Given that my own diocese unanimously passed a resolution calling on TREC to adopt the tithe as the standard of giving to the churchwide budget, I would be neglecting my role as chair of the Georgia Deputation if I did not mention moving to a tithe. The standard of ten percent is consistent with our traditional tithing messages to parishioners and is therefore defendable. This percentage is likely to get very high participation even in the first year as only 11 dioceses give less than 8% now once the $200,000 deductible is in place. This makes the working number of $17.3 million per year or $54 million for the triennium a close estimate, if giving income increased each year by the 0.5% assumed by the current preliminary draft. This cut by $19.2 million to the three-year budget would significantly change what we are able to do at the churchwide level. This example shows more clearly the point above that when we set the revenue side of the budget, we create the one technical fix that makes the most change.
A Number We Can All Support
I believe that we would all prefer to have our dioceses fully support the church-wide asking, even though we might not agree on the percentage we can all support. In 2012 the House of Bishops considered a 15% asking. Given that the current median is 16%, perhaps that number of 15% is a realistic number that the vast majority of dioceses could support, especially with the $200,000 deduction proposed by the Executive Council’s Finances for Mission Committee. The current proposed draft assumes this as the number, but it will take three years to get there.
Putting Teeth into the Budget by Turning Asking into Assessments
With the $200,000 deduction and a move downward below the median, the time is right for the asking to become an assessment. What might that look like? Those not giving their full assessment would lose their voice and vote on the budget at both CCAB and General Convention levels and would not be eligible for program funds, such as a Mission Enterprise Zone Grant. These dioceses would retain their seat in convention and continue to have voice and vote on other matters.
All dioceses would be given the opportunity to appeal to a committee of Executive Council if they could not move at once to the new assessment. We would expect that all dioceses significantly below 15% would need time to adjust their budgets to get there. The “pastoral exception” should be only for dioceses that experience a significant drop in their own revenue. In these cases, the committee could have the ability to adjust the assessment to 15% of the actual income of the diocese. Any diocese giving at the rate approved in an appeal to Council (such as those moving up in a multi-year plan) would continue to have seat, voice, and vote on all matters before the General Convention.
In the Diocese of Georgia we made the move from a graduated system of four rates (17.5%, 15%, 12.5%, & 10%) to a simple of 10% for all congregations (based on the average of the previous three years Normal Operating Income line item from the Parochial Report). We also created an appeals process that helped congregations below the tithe move up to 10% over a three to four year process, depending on how far below 10% they were. We also asked those giving more to ladder down to 10% over three to four years. We had enthusiastic cooperation in this process from our congregations.
I propose moving at once to 15% for all three years of the next triennium and removing voice and vote on the budget as noted above in order to make this an assessment. I am willing to work hard to make responsible cuts keep this leaner budget mission focused. I think that the move to a 15% asking will generate higher participation by dioceses without creating catastrophic budget changes at the churchwide level. If we combine this approach with asking dioceses giving more than 19% to ladder down while other dioceses are laddering up, the significant impact could be lessened. There is no easy way to make this change and it will result in likely cuts of $4 million in the first year alone. Elsewhere, we can begin the discussion on changes to the expenditures that would be in line with a 15% assessment.
This is a technical fix which will not do anything toward the real adaptive change needed to move the church to a mission mindset and approach. But setting this income number rightly will provide the context for the decisions which follow as we determine which mandates get funded and which get left out of the budget. That’s when our talk of changes to the structure will really start to be made real.
The Rev. Frank Logue is the Canon to the Ordinary for the Diocese of Georgia. From 2000-2010, he served as the founding rector of King of Peace Episcopal Church in Kingsland, Georgia. He served on the floor of the House of Deputies in 2003 when a first alternate, then in 2006, 2009, and 2012 as a Deputy, including twice as chair of the deputation and two conventions on Dispatch of Business. In 2012, he ran for President of the House of Deputies.
The video above is offered in appreciation for the Task Force for Reimagining the Church who is considering how to align The Episcopal Church structures more effectively for mission. This is my very bad freestyle rap based on tweets from the churchwide meeting held at Washington National Cathedral on October 2, 2014.