Episcopal Press and News
New National Church Funding Plan to Provide Relief to Most Dioceses
Episcopal News Service. February 9, 1994 [94019]
Michael Barwell, Communications Director for the Diocese of Southern Ohio
After years of patchwork solutions and rising tensions between the General Convention budget and diocesan support, the Executive Council of the Episcopal Church is proposing two solutions: a simple formula to determine diocesan support and a new unified national budget.
If approved by General Convention in August, it is estimated that 76 of the 99 domestic dioceses will pay less to support national church operations in 1995, according to Episcopal Church treasurer Ellen Cooke. But 23 dioceses would pay more.
Council unanimously recommended the new formula in which dioceses will pay a flat rate ranging between 15-21 percent of the income they actually receive from parishes and unrestricted income from endowments and investments during a current budget year.
The new funding formula is a graduated percentage basis in four income ranges, based on projected estimates of 1995 diocesan income:
- 13 dioceses with income of $500,000 would pay 15 percent;
- 10 dioceses with income of $500,000-$1 million would pay 17 percent;
- 43 diocese with income of $1 million-$2 million would pay 19 percent;
- 24 dioceses with income over $2 million would pay 21 percent.
Cooke reported to council that the proposed funding formula will reduce national church revenues by more than $7.9 million in 1995, for an asking of $29,067,244.
Under the current formula dioceses pay two fees to the national church: an apportionment of.0375 percent of total net disposable budgeted income (NDBI) based on total parish income to support national church offices and programs; and and an assessment of 0.027 percent of NDBI to support the operations of the General Convention and interim bodies.
The current formula is based on total parish income as reported in the annual parochial report, rather than on income actually received by the dioceses. Cooke explained that using NDBI as the base has proven to be unwieldy and results in budgets reflecting a three-year lag in information. Using projected current year income is riskier, Cooke admitted, but is based on a more accurate financial picture at the diocesan level.
"Now, we'll have a simpler formula that will allow us to live and work together," Cooke said during an interview. The new formula "responds to what the dioceses said. We will be living in the same reality."
The tensions between using estimated total parish income and what parishes actually send to dioceses to support diocesan and national programs has grown in recent years. While congregational income has increased, diocesan budgets have not kept pace, forcing some dioceses to reduce or set limits on payments to the national church operations.
Reminding council members that the 1991 budget was approved by General Convention with only one dissenting vote, Bishop Don Wimberly of the Diocese of Lexington noted that the projected shortfall in 1995 is the direct result of dioceses not paying what their deputies approved three years ago.
"It is apparent that many dioceses are setting their own formula," Wimberly said during council's review of the new plan. "This is not the way we should be doing our business."
During a open hearing sponsored by the church's committee on program, budget and finance (PB&F) last fall in Chicago, diocesan administrators complained that the national apportionment is unfair and unrealistic. When parishes cannot or will not pay diocesan support, the diocese is caught in the squeeze. A number of dioceses have been paying more than 35 percent of their diocesan income to the national church, forcing them to cut diocesan staff and programs.
Council members were almost unanimous in their support of the new funding proposal.
"The overwhelming argument in favor of this formula is clarity: we bring things out into the open this way," said the Rev. Randolph Dales of New Hampshire.
Harold Nicrosi of Alabama asserted that the change in the formula "is not crisis control. Dialogue over funding a formula has been going on for many, many years," she said, noting that the treasurer's office and PB&F have worked and listened for three years to optional plans. The change in the formula, she said, "is not driven by the crunch of the moment. This must be seen as an ongoing development in our stewardship -- not crisis management."
Nancy Moody of Northern Indiana agreed. "This whole funding exercise has been in search of the most equitable way. Perhaps we will never arrive at a perfect one, but we hope it will satisfy a large number of dioceses."