Methods of Funding the National Church

Funding of the National Church from the dioceses has taken a steep drop since a new approach was adopted in 1994.  Here is a description of what happened.

As the result of a resolution adopted by the 1985 General Convention, a "Select Committee" was set up to determine what method should be used for splitting up the national budget among the dioceses.  The Committee was directed by the resolution specifically to consider asking the same percentage of diocesan budget from each diocese.  The then-existing method was to base each diocese's share on the Net Disposal Budgetary Income (NDBI - basically the normal operating funds including income from unrestricted endowments) of the parishes in each diocese, plus the income of the diocesan endowment used for budgetary purposes.  Prior to 1974, the method was based on the total expenses of the parishes and diocesan organization.  In 1985, strong voices were calling for a flat percentage of diocesan income.

The Committee considered five methods:

  1. the pre-1974 method
  2. the then-present system (parish NDBI plus diocesan unrestricted endowment income)
  3. voluntary giving
  4. apportionment based on the diocesan income received from congregations, plus diocesan unrestricted endowment income
  5. apportionment by the national church of each congregation directly based on congregational income.

The principal numerical difference between #2 and #5 is the effect of the diocesan endowment income; however the collection mechanism is very different, as would be the visibility of how much money from each parish was going to the national organization.  A survey was taken of diocesan and national leaders; #1 and #5 received so little support that they were dropped. 63% favored apportionment rather than a voluntary (with no suggested amounts) system.  Many who theologically supported a voluntary system said that they didn't think the Church was ready for it yet. (Subsequent events have proven them right!).

The Select Committee recommended that approach #2 be continued; the 1988 Convention agreed.  A lot of the data gathered by the Committee showed that voluntary plans don't work unless the participants are carefully and thoroughly prepared, and then continually reminded of the need to give.  When voluntary plans are entered into without adequate preparation, and without strong continuing leadership in stewardship principles from the top of the organization, they lead to financial disaster.

In 1991, during the period leading up to Convention, a movement built up to adopt a flat proportion of diocesan income (like #4 above, but without the adjustment for diocesan unrestricted endowment income).

I did a quantitative analysis, and showed that some dioceses would receive very major increases (Utah's amount would be more than four times what it would be under the old system, and Idaho's more than three times). Some other dioceses would receive quite substantial decreases (Long Island's cut would be 47.1%, Virginia's 41.5%, and New York's 32.8%).     Since people would be happier to cut than to increase, I predicted that the National Church would receive $2.0 to $3.5 million less per year than under such a system.   My memo helped kill the change in 1991, so that the then-existing system was continued until 1994.

But I wasn't around the National Church in the period leading up to the 1994 Convention, and steam again built up for a change to a system more nearly based on a flat percent of diocesan income, but asking those who had been giving above their new flat rate to keep on doing so. Rosy projections were made of income expected over the next three years.  I tried to head this change off at Convention, but I was too late, and the change went through.

graphGuess what? Beginning the next year, the totals received by the National Church started dropping substantially, both in absolute dollars, and as a percentage of either diocesan income or parish NDBI - pretty much as I had predicted. In a period of financial stress, when most of the Church is feeling rapidly increasing costs, it's a lot easier for a diocese to go down than to go up.  Although some of the overall drop was for ideological reasons, some of the drop was also because of the following. Previously high-giving dioceses who were asked for less gave less, while those asked for more didn't give nearly as much more.  This outcome is not surprising, but the 1997 proposal is that we keep doing it again for another three years, even though many dioceses are still in transition from the old formula to the new.  If this happens, we can expect further decimation of National Church programs and staff.

Doesn't anybody care about the mission and ministry of the National Church? The current staff size at the Episcopal Church Center represents about one staff person for every 11 thousand Episcopalians, or about 2.2  staff members per diocese. This is not a bloated bureaucracy!  The Church can't do things without dollars or staff.

The proposed annual budget of the National Church for the next three years averages about $39 million per year.  $39 million is enough money to build about three miles of interstate highway.  It also equates to less than $16 per member per year, or $1.25 per month.

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