Episcopal Press and News
Financial Crunch in the Church May Force Tough Questions on Priorities
Episcopal News Service. May 14, 1991 [91124]
A financial crisis is sending a shudder through all levels of the Episcopal Church and forcing some serious rethinking of the church's mission in today's world. The crisis may also be straining the connective bonds that hold the church together and make it a unique institution in American society.
The crisis comes at a time when giving at the local level has steadily increased for the last 20 years to a projected total in 1991 of $1.2 billion. Yet fewer and fewer of those dollars are sent on to the diocesan and national level, forcing cutbacks and adjustments -- and some tough questions on priorities.
When Bishop Jerry Winterrowd announced in his first pastoral letter as the new bishop of Colorado a $75,000 cut in the budget and a revamping of diocesan financial policies, he joined a long list of colleagues throughout the church who have been forced to face a new reality.
The financial crisis in Colorado is played out in dozens of dioceses throughout the Episcopal Church as they scramble to make ends meet. Many are caught in a crunch between obligations to the national church and economic realities on the local level that lead parishes to revise their contributions.
A combination of recession and declining receipts from parishes is forcing many dioceses to change staffing and program. Some are holding on with minor adjustments, perhaps by dipping into reserve funds or delaying certain expenses. After a few years, however, the Band-Aid measures are not enough, and more drastic action is needed.
In the Diocese of Massachusetts, largest in the Episcopal Church, an anticipated budget crisis forced a total reorganization of the diocesan staff last fall. A decision in the Diocese of Connecticut to move from proportional assessment to a voluntary plan produced a shortfall so severe that $650,000 was cut from last year's budget and several staff positions were eliminated.
In the Diocese of Central New York, an anticipated $80,000 deficit is forcing what diocesan council member Wallace Frey called "difficult, important, and fundamental decisions about the future shape and size of the program."
Most Western dioceses in the church are not feeling the pinch as much, but even there adjustments are necessary. "The recession is for real," Bishop Joseph Heistand of Arizona said in announcing $100,000 of cuts in the diocesan budget. In order to provide a more predictable income, the diocese this year moved to a plan that calls for a 20-percent assessment of each congregation's net disposable income as "the most equitable way to share the responsibility among all congregations."
For a variety of reasons, many Episcopal parishes are not meeting their obligations to the diocese. Some report that the demand of local expenses is the main reason. Small parishes, for example, are finding that the cost of upkeep of the physical facilities drains limited financial resources.
Fixed costs, beyond the control of most parishes, add to the problem. "We are feeling the pinch with extremely high medical insurance costs," said Sue Foster, fiscal officer of the Diocese of Eastern Oregon. "It has affected our whole budget -- and those dollars paid for medical insurance aren't used elsewhere."
Eastern Oregon is one of the small dioceses supported directly by the national church though a program called Coalition-14 (C-14). As funds available for the coalition have leveled out in recent years, the recent 5-percent cut in the national budget has increased the pressure on programs in C-14, Foster said. One immediate result was discontinuation of the diocesan newspaper.
Some people insist that there is a positive way of interpreting the situation -- pointing to parishes responding to challenges on the local and regional level. Many parishes, with ambitious outreach programs, are choosing to concentrate on new forms of outreach ministry on the local level. The Episcopal Church operates more soup kitchens, for example, than anyother denomination in the country. And the commitment to AIDS ministry and economic justice also draw heavily on local resources.
Ann Fontaine of Wyoming, an Executive Council-member who serves on the administration, budget, and finance committee, agrees with the observation that parishes are more active in local ministry. "There are a lot of hurting people in our communities, so parishes are taking a much more active interest," she said. She points to an identity issue, contending that it is often difficult for people in the pew to relate to the diocese. "It is harder to feel connected to a diocese -- but they have a good sense of what it means to be part of the national church body," Fontaine said.
When asked if she perceives any protest on the local level toward positions taken by the national church, Fontaine told of an encounter on a recent flight with a woman who had just returned to the Episcopal Church. "She is not afraid of the controversy. In fact, that's what she likes about the Episcopal Church -- the freedom to ask the tough questions. She thinks the church is the hope of our society, that only the church can teach us a new way to live together."
Others express concern that the trend toward more localized ministries may represent a growing insularity and inwardness that denies one of the unique aspects of the church as an international faith community. The Diocese of Atlanta is making a special effort to help parishes understand their responsibilities to the diocese. "All of us are the diocese -- and there are vital ministries that we just can't do unless we support this united mission," said Linda Puckett, diocesan financial administrator.
While parishes pass along their own budget crisis to the diocese, an increasing number of dioceses are insisting that the national church absorb some of the pain by learning to live with less income from the dioceses.
The Diocese of Virginia, for example, decided its pledge to the national church should be based on a percentage of the diocesan budget, rather than tied to disposable income at the parish level. Virginia's contribution had reached 36 percent, highest in the church, and was still climbing, so the diocese voted to set the contribution at 25 percent in the future.
It was not an easy decision for the diocese, and some people expressed sadness that the long-held tradition of often pledging more than the national church assessment may have passed into history. Yet the diocese found itself with fewer resources for its own ministry.
The Diocese of Central Florida felt a similar squeeze. "We were caught between two competing systems," Bishop John Howe told the diocesan convention. "The congregations give to the diocese voluntarily, but the national church assesses the diocese on a formula that year by year leaves the diocese a smaller percentage of net disposable income for its own program, staff, and ministry."
The diocese last year chose to make its own contributions to the national church voluntary. Howe said that it was "not an easy or hastily made decision -- in some ways it was very painful. But I believe it was the right one. More and more dioceses around the country are making exactly the same kind of decision, for exactly the same reason."
Diocesan contributions to the national church were a major topic of discussion at the recent Conference of Diocesan Executives. "I was really surprised at the number of dioceses represented that were concerned about national church apportionment. It was a real eye-opener," said Marlene Eaton, assistant treasurer of the Diocese of New Hampshire.
While there are signs of a trend in rethinking the contributions of dioceses to the national church, others express reluctance to do so because it would send the wrong signal to parishes.
"We have maintained our dedication to the national church," said Ben Matlock, assistant to the bishop of Western Massachusetts. "We feel if we don't it sets a horrible precedent." Marlene Eaton, assistant treasurer of the Diocese of New Hampshire, expressed a similar sentiment. "We pay the full amount because to ask our parishes for a full amount and then turn around and not give full apportionment to the national church, well, it doesn't say a whole lot. Eaton added, however, that cutting diocesan programs to pay that apportionment is raising some tough questions.
"The diocese is committed to paying its apportionment -- in principle," added the Ven. Kent McNair, archdeacon of the Diocese of Northern California. "We feel that if we don't do that, then the churches won't be obligated to pay to the diocese, and the people won't pay to their churches."
Some dioceses have gone to great lengths to fulfill their commitments to the national church. The diocesan council of Massachusetts, for example, dipped into a reserve fund in order to meet its $905,000 obligation. Bishop David E. Johnson warned that it was time "to make the national church aware of the limitations we are under in Massachusetts and the limits to what we can do over the next three years."
That note of warning is appearing more often in diocesan conventions. "We are beginning to think the unthinkable -- cutting our contribution to the national church," observed one administrator from a Southern diocese.
At a recent meeting with staff at the Episcopal Church Center, Presiding Bishop Edmond Browning said that most mainline denominations were feeling the financial crunch. The Presbyterian Church (USA) recently put a freeze on staff and all new programs. And the Evangelical Lutheran Church in America (ELCA) faced a substantial budget deficit for the third year in a row. Its financial reserves are depleted, and it now faces deep cuts in staff and program.
"The candy store of the churchwide organization must close now," said ELCA Secretary Lowell Almen. "The time has ended when every interest group, every caucus, every concern, every emphasis, every self-proclaimed representative body, every good intention, every noble effort, and every great program could demand to get whatever was wanted, as if there were no limits."
The ELCA must trim $5.2 million from its 1991 budget. ELCA's Bishop Herbert Chilstrom wrote out a personal check for $5,000 to underscore the crisis and said, "If you look at the broader picture, we are not alone."
The financial crisis has been a bit slower in hitting the Episcopal Church because the church's financial planners saw it coming and were able to make adjustments. A freeze on hiring and salaries was put into effect last January and will continue through the end of the year, Browning told the Church Center staff. The Phoenix General Convention will provide a better sense of resources available -- and it will set priorities for the coming triennium. Once those priorities are established it is quite possible that there will be adjustments in the organizational structure and staffing at the national level. "There will be changes," Browning warned, almost certainly some staff reductions. Plans for 1992 will be shared with the staff at a special meeting in October.
The national church is learning to live with the new financial reality and has been adjusting to the change in revenues, according to Ellen Cooke, the church's treasurer. She pointed out that revenues and expenses have kept pace, and said that she does not see the financial crisis as a long-term threat. "We are going to have a soft landing," she commented.
As Cooke travels throughout the church, she preaches an up-beat message that the strength of the Episcopal Church is especially evident at the congregational level. "Our congregations are closer to the heart of problems and quicker to respond to realities of life in our society today," she said on returning from speaking at several province meetings. She does detect, however, a feeling at the congregational level that dioceses and the national church don't always see and appreciate the kind of ministry they are doing.
Cooke said that she finds many signs of vitality in the church -- and a new maturity in dealing with all kinds of issues, not only financial ones. "We are still a community. We've been through all kinds of trials, but we are emerging a stronger church," she said. Part of that maturity is based on some new understandings of what community means. "Once we come to terms with the human systems and the basis for community, it is easier to sort out the practical issues.
"The financial crisis is straining relationships in other parts of the globe. Budget cuts have a disproportionate effect on our partners in other churches -- and our commitments to international church agencies, such as the World Council of Churches," Cooke continued.
"We are caught in a double crisis -- our societies are in trouble economically, and now our churches face further cuts in resources," said Bishop James Ottley of Panama, vice president of the House of Bishops. "These cuts are preventing us from new opportunities for mission in this part of the world -- just when the needs are greatest. Not to be able to reach out is very frustrating."
Ottley said that the cuts could be "devastating" for churches in the Third World and necessitate staff cuts. While accepting the financial reality, he is clearly uncomfortable about being put in the position of competing for fewer dollars with other programs of the Episcopal Church.
Vince Currie of the Diocese of the Central Gulf Coast, who has chaired the administration, finance, and budget committee of the Executive Council for the last three years, said that the national church "must respond to the financial situation and face realities." Describing himself as a conservative businessman, Currie said that it is clear to him that the church has been attempting to do too much, trying to be all things to all people and meet the needs of too many special interest groups. "Sooner or later we must draw the line," he said.
"We must take a hard look at what the church can do best -- and turn our attention to the needs of our constituency, the people in the pew," Currie added. Among the issues that he thinks need more attention are traditional areas such as Christian education, evangelism, and stewardship.
Currie agrees with some observers who worry that the connective tissue of the church -- between parishes and dioceses, between dioceses and the national church -- are being strained. "New members may not always understand what it means to be an Episcopalian, so we must help them understand how we belong to each other," he said. One of the major issues is how to build trust and confidence on all levels of church life, Currie added because then the money for our mission will follow.