Wednesday, March 14, 2012

The Budget is Out, and It's Not Pretty

Executive Council’s proposed budget for the triennium 2013-2015 has come out, and it is not pretty.  Christian Formation has been slashed by 90% at the churchwide level – no youth programs, no young adult programs, no campus ministries.  At the same time, administrative costs for the Presiding Bishop’s Office, the Chief Operating Officer’s Office, the treasurer, the finance office, and the Washington DC lobbying office have increased substantially.  What gives?

Let us stipulate that a budget is a missionary document.  “Where your treasure is, there your heart will be also,” said Jesus.  It’s not that we are supposed to put our treasure where our hearts already are.  It’s that we are supposed to put our treasure where we want our hearts to be.  We’re supposed to put money into what we know our mission should be, and Jesus says our hearts will follow. 

So where should our mission be?  What is God calling us to do?

Happily, this not a difficult question.  The Episcopal Church has already taken a stand about where our treasure and our hearts should be.  In 2009, General Convention passed Resolution D027, which stated that our budget priorities should be based on the five Anglican Marks of Mission, which we share with other Anglican churches throughout the Communion.  Those Marks of Mission are:

1.     To proclaim the Good News of the Kingdom
2.     To teach, baptize and nurture new believers
3.     To respond to human need by loving service
4.     To seek to transform unjust structures of society
5.     To strive to safeguard the integrity of creation and sustain and renew the life of the earth

The budget proposal just released includes expenses in these five categories, plus two others not listed as Marks of Mission:

6.     Administration
7.     Governance

We should be clear on what these Marks of Mission mean for us.  The first two Marks describe how we fulfill the Great Commission to "Go and make disciples of all nations, baptizing them and teaching them to obey everything that I have commanded you" (Matthew 28:19-20).  In contrast, the last three Marks describe the fruit of that mission: when we have built committed disciples, they engage in ministries of loving service, changing unjust structures, and caring for the earth.  Therefore the first two Marks of Mission are the essential foundation of all mission in our church.  Without committed disciples, we accomplish nothing.  

So – let’s see how we are doing with our budget priorities.  

Looked at from the standpoint of the Marks of Mission, our churchwide budget seems seriously skewed.  I did a detailed analysis of the line-item budget, and here is what I came up with:

1.     To proclaim Good News of the Kingdom:     $3.1 million, 3%
2.     To teach, baptize and nurture new believers:  $286,438, 0.27% 
3.     To respond to human need by loving service: $27.6 million, 26%
4.     To transform unjust structures of society:         $4.6 million, 4.3%
5.     To care for creation:                                           $106,470, 0.1%
6.     Administration:                                              $55.2 million, 52.1%
7.     Governance:                                                   $13.7 million, 13%

I note that the percentages above are not the same as Bishop Sauls' calculations of "mission" and "overhead" in his famous presentation to the House of Bishops.  I am not sure how he determined his percentages, but my calculations are available to anyone who would like to request them, at

Now, administration and governance are important functions for our churchwide office to perform.  Someone needs to count the beans (administration) and someone needs to make the decisions (governance).  It is certainly important for the churchwide office to be our primary liaison to other churches of the Anglican Communion and to exercise leadership in ecumenical affairs.  Accounting and finance functions are necessary.  Other administrative costs are vital to support our mission.  Our Church Center includes, for instance, an office of Research (administration) that has been churning out useful information for quite a long time, helping congregations understand how they need to grow and where their next mission steps should be.  And one can make the argument that governance is an extremely important reason a churchwide structure exists at all, since most “mission” is performed at the local level. 

But for administration and governance together to comprise 65% of our total churchwide budget?  Ridiculous.  For the two highest, most foundational priorities (Marks 1 and 2) to comprise barely more than three percent of our churchwide budget?  Outrageous.  For the Christian Formation office to have been cut by 90%, from its minuscule less-than-3% level to nearly nonexistent, while administrative costs are beefed up correspondingly?  Unconscionable. 

We don't need this kind of administrative structure.  We need governance, we need accountability, we need lay and clerical involvement in decision-making structures of the church.  We don't need armies of administrators.  They are not accomplishing the Marks of Mission.

Look, let us agree on some foundational principles for creating a budget:

  1. 1.     The budget needs to be balanced.  This is a test that the current proposal fails – despite the fact that it looks balanced, this is actually a deficit budget of $1,250,000.  See line 366 of the budget: development office expenses were understated by this amount.  This budget was balanced on the strength of $1,250,000 taken out of the endowment and unintentionally applied to operating costs.  On Day 1 of Convention, if nothing else changes, PB&F is going to have to find another $1,250,000 of budget cuts to correct this error. 
  2. 2.     The budget needs to include responsible payments on debts, because Christians honor their obligations.  As far as I can tell, this budget passes that test. 
  3. 3.     The budget needs to provide for reasonable overhead, administration, and governance costs.  As noted above, these functions are necessary.  However, this budget fails this test.  No one on earth could claim that $69 million of administration and governance costs are reasonable and necessary.
  4. 4.     The budget needs to further the mission of the organization.  Epic fail.  The resources devoted to the Five Marks of Mission, already determined as the church’s mission priorities, are tiny compared to the self-perpetuating administrative structure.
  5. The budget should provide that expenditures are made at the level at which they will be most effective - congregation, diocese, or churchwide.  I myself have advocated for moving away from churchwide programming in some areas toward more of a networking structure.  But targeting Christian Formation for these cuts is a seriously bad idea.  By cutting Christian Formation almost entirely, and by devoting laughable amounts to the first two Marks of Mission, this budget ignores opportunities to empower mission at the churchwide level.  Youth ministries, for instance, are in such decline across the church that teenagers need to be gathered at levels other than the congregational level in order to achieve critical mass.  Teenagers like to be with other teenagers, and they hear the gospel best in company with other teenagers, in age-appropriate worship, speaking, and cultural styles.  Most of our congregations, average attendance 65, do not have the capability to do these things.  Dioceses, provinces, and yes, the churchwide structure should take on more responsibility for gathering young people in groups like EYE, not less.  
  6. The budget should abandon expenditures that are not effective.  Does anyone in Washington really care what the tiny Episcopal Church thinks about the great issues of the day?  Does the average Episcopalian think that lobbying is a good use of her or his hard-earned, faithful contributions?  Do we really want to spend $2.6 million on this function and practically nothing on the 2nd Mark of Mission, Christian Formation - one of the two mission areas that empower all the others?  

The budget narrative states that funding was cut for items best done at the local level, while retained for governance tasks for which the churchwide structure exists.  I get it.  I think governance is important too.  Our unique polity in The Episcopal Church is based on widespread participation by laity, deacons, priests and bishops: governance.  But that is not what is increased here.  Funding for CCABs (i.e., governance), for instance, is cut substantially.  Well and good.  But staffing is increased for numerous administrative (not governance) staff positions.  And Christian Formation is nearly eliminated. 

Has anyone at the Church Center (other than that very useful Research office) looked recently at Episcopal Church trends?  At our declining attendance, at our age distribution, at the way our members are skewed alarmingly toward the older end of the scale?  How can anyone think – apparently based on a haphazard, non-random Survey Monkey survey, no doubt filled out by a lovely, non-random, self-selected sample of the most dedicated insiders of our aging Episcopal population – that youth ministries should not be funded at every possible level – local, diocesan, and churchwide?  How can we not be in emergency mode here, doing everything possible at every level to reach new and younger populations for Christ and for the Episcopal Church? 

Let us be frank here.  The need to reach out to young people is not an emergency that will hit us 20 years in the future, just because 20 years is when those folks will be old enough to pledge.  This is an emergency that hits now.  If we are not foresighted enough to understand this on its merits, then maybe we can understand it this way: if we can’t appeal to the youngsters, then we’ve lost their parents too.  And Generation X, their parents, is the generation that is about to take over leadership and stewardship in our church, as the Baby Boomers reach retirement age.  This emergency is here NOW.  More on this here:

We need to make some huge changes now.  We need to immediately reallocate resources away from administration into evangelism and Christian Formation. 

The current budget was promulgated by Executive Council, with the staff backing of a delightful group of administrators. These administrators remember the days when a Washington lobbying office of The Episcopal Church could actually make a difference in US politics.  They stay busy all day long with their administrative tasks.  They naturally see their own functions as crucial. 

They are not.  Here is what is crucial.  The kids are crucial.  The college students are crucial.  The un-churched, de-churched, and semi-churched people who are longing for a spiritual connection to God are crucial. 

God has a calling for this very special branch of the Christian family called the Episcopal Church.  We are unique, distinctive, wonderful.  We are catholic, evangelical, liberal, sacramental.  We have a vital role to play in the coming generations.  Let’s don’t let this beautiful church die in an meaningless, short-sighted, administrative ditch.  

Just a Couple More Things

Development Office.  Perhaps this is a good idea.  But is it right to fund it out of our endowment funds?  Is this even legal under the terms of our endowment, when funds generated by the Development Office won't necessarily go back into the endowment?  I would like to see a legal opinion on this.  Even if it is legal, is it an ethical use of endowment funds?  I am not decided on these questions, but I think we need to ask them.

Special Convention.  The special convention recommended by Bishop Sauls has been deep-sixed in this budget.  Instead, Executive Council has allocated $500,000 for a special consultation on restructuring.  Hurray, I say!  A special convention would have been outrageously expensive.  A special consultation will be a good first step in figuring out mission for the future.  

815 2nd Avenue.  My understanding is that the value of the building is not much in excess of the debt, so that after closing costs, commission, and moving expenses, we might walk away from it at breakeven.  It still might be a good idea to sell it.  But that won't affect the budget for this triennium.  This is an albatross we have to budget for.  

Debt Funding.  My understanding is that our two items of real property, 815 and the parking lot in Austin, are backed not by mortgages, but by our endowment fund.  This is not a wise way of funding real property.  A mortgage is a responsible way of doing debt funding because the risk is limited to the value of the property itself, and creditors can't come after other assets.  Not so with endowment backing.  If we end up underwater on our building-related debt, our creditors can come after our endowment.  This is very risky financing.  We need to make wise and responsible rules for how to fund our properties.  We're stuck with it at this point, but we should not be doing these things in the future.  


  1. Susan,
    I agree with you and I thank you for your analysis.

    When you say, "Has anyone at the Church Center (other than that very useful Research office) looked recently at Episcopal Church trends?" Speaking from experience, I will say that yes, the Formation and Vocation office (and possibly others) know this deeply. It needs to be clear that the "Church Center" did not come up with this budget. A few people from the denominational office had some input into this budget. The rest came from Executive Council and the survey they say they based the budget upon. But can a survey speak for all of us? No.

    Again, thank you for speaking out and doing the work that you did to post this blog. I will be sharing.


  2. Thank you for spending this much time and attention on the budget. I did some reflecting myself so I have a vague sense of how much time this took... more than I spent. I have shared this in a couple places. Did you know that there's a roundup of posts on the budget at

  3. Thanks for your comments. Shannon, you're right that the program offices didn't have input into this budget, which seems odd to me (when we do budgets at the parish level, for instance, we ask ministry leaders for their needs and their dreams, which is what we base our budget on). The staff that had input are people with finance and leadership positions. Executive Council wouldn't have the human resource power to do this kind of accounting on their own, and they certainly receive recommendations from the top officers. However, I have clarified that language in my blog, because you are right that this is Executive Council's budget, not 815's.

    Nurya, thanks for pointing me to that roundup of comments on the budget. I had read your blog post a couple of days ago, because someone else had posted it on Facebook or something. Good post! You are right that the Strategic Plan from 2010 seems to have been shoved in a drawer and forgotten. I considered adding that to my blog too, but my post was getting too long as it was. The Strategic Plan (which Executive Council adopted and supported, then shelved) did highlight developing the next generation as a top priority of the church. What happened to that idea? It's a mystery to me.

  4. A few thoughts, Mthr. Susan.....

    If the Five Marks of Mission (drawn from the five wounds of Christ?) are intended to be the principle functions we as a Church are called to, we ought to take every dollar out of administration and governance initially and figure out how we shall live into those Marks at parish, diocese, province and national level and THEN allocate administration and governance dollars accordingly....note the bottom up approach, not top down.

    My particular areas of interest are in formation and evangelization...these marks should be seen as linked and funded together, and while funding for youth needs enhancing, we forget to continue outreach and ongoing formation for folks 40+ and above - these are folks whose attention to their mortality makes them thoughtful about matters spiritual and whose relative fiscal well-being gives them the ability to act on their faith for the benefit of the Church and those not in the Church.


  5. Small Farmer, you bring up some great points. You are right that I focused on youth formation, but lifelong formation is essential in forming committed disciples. I am not sure it requires quite the same funding level, however, since there are enough adults in local parishes who are able to gather together for education, and there are many resources out there. Youth is where we have slim populations in most of our parishes, so it becomes even more important to be able to gather them in groups at higher levels in the organizational structure - diocesan, provincial, churchwide. I also think it is very helpful to have these larger structures take on the mission of leadership training for youth mission.

    Regarding budgeting, you are advocating a zero-based budgeting approach, which I agree with. Every triennium, decide on the vital missions to be accomplished, then decide on what support structures are necessary. Don't assume that support structures will carry over from one year to another. (In a practical sense, this would have to be balanced against the reality that we are talking about people's jobs, and you normally don't hire people for one-to-two-year terms.)

    And there are certain areas that don't fall into the 5 Marks that are necessary for the churchwide structure to perform, such as ecumenical relations and governance. I do think governance is important, else we will fall apart into a loose network of independent congregations, which is not what The Episcopal Church is. One thing that is distinctive about us is that we are connected through our bishops, but our governance structures involve all orders of ministry. I think this structure is an essential component of our witness to the world.

    But what you are saying is very important: without careful attention to mission in every single budgeting process, administration grows and takes over and becomes the thing of primary importance. I am with you - start with the mission and then add only what is necessary.

  6. Thanks for the feedback...may I offer a few additional comments?

    First, I'd like to point folks who are interested in youth formation to a website, - The Online Encyclopedia of Informal Education. There are many ways of educating folks of all ages and I'd offer the thought we've only just begun to explore the options here in the Episcopal Church.

    Second, I'd offer the thought that perhaps a Monastery of the Heart type local community based on The Rule of St Benedict or might be more helpful than usual Sunday School for folks who aren't attracted to the usual mission approach to involvement....this doesn't require huge expenditures of money but does require laity involvement at the local level....

    Third, the Episcopal Church continues to rely on its clergy often to the exclusion of laity in pursuing the five Marks, yet as a community we are highly educated, well trained, and quite capable of both teaching AND leading...

    Fruther thoughts?

  7. Susan,
    Appreciate the work and energy necessary to put this post together. In my estimation this is a good, solid shot across the bow. No need to adjust it, edit it, revise it, polish it, civilize it, no matter who comes along and sits on it. You have spoken truth to power.

    And for current comments and ones to come: let's not quibble with defining "who's" budget this is. Everybody from "815" is in on this, everybody from GC bodies is in on this, and quite a few voices from EC are in on this. Susan's shot, and of others also blogging, is across the WHOLE bow of the flagship: no one gets unexcused.

  8. Thanks, Rob. I hope all the folks you name are listening to the many voices that are speaking on this subject. Susan

  9. Thanks for your hard work Susan. I think your analysis is very helpful. I do encourage you to re-vision the "solution." You talked about doing adaptive vs. technical change....but the process you outline is a technical change. I used to work at 815 (many years ago) and we at least thought we were doing essentially what you outlined. What I've learned over my 30+ years of watching the system as well as being in it is that almost any change you make will quickly become part of the system. In other words, changing the budget making process, the people in it, etc. does not change the system. All of those technical changes simply mean we produce the same thing -- maybe just a little faster, better, cheaper. But the end result is the same.

    If you want at different outcome, you need a different system. Zero-based budgeting is one way to start getting at that, but I believe you'd have to radically change how money is collected and allocated. For example, DON'T have the committees, staff, networks, etc. involved -- thats what we now try to do and they all have self-perpetuation (maintaining the existing system) in their DNA. Instead, do three things:
    1) decide what we need as the core functions of a central administrative function -- e.g., finance office, communications, the PB's and General Convention offices.
    2) decide what is working well, is not being done elsewhere and would not be something easily done elsewhere -- e.g., ERD, Migration Ministries, etc.
    3) put the rest (most) of the money into a pot and administer it as grants to dioceses, congregations, organizations, even individuals who will do specific work we need done, have a plan and are publicly accountable (post monthly expenditures, activity, results, etc. on a website). Right now, I'd allocate the majority of that money to reinvigorating, reimagining, reinventing the church. That would accomplish what I think you are looking for -- which is a fresh start, so to speak, but would move it outside of the existing system so a new system could (and would) emerge. Some of those grants might well go to existing staff offices and committees -- but only if their proposals were better than the ones from other groups. While administering this would certainly be a challenge, the reason for doing it would be to open the door to new life and to watch what is emerging from the future instead of, as you say, building on the past or just doing the same thing over and over while expecting a different result.

    I think the postmodern age moves us from machine (linear, rational, atomistic, mechanistic "fixes", etc.) to the network (organic, circular, connectivity/relationships, etc.). Trying to fix a broken machine (modern age solution) will just get us a 1950's machine running a bit better. I believe we are called to be brave enough to step out and allow a new way of being church emerge. Can't do that, though, without letting go of much of the old ways of doing things. If we don't stop what we are doing now we will not have the time, money or energy to discern, much less follow, God's leading into the future.

    (The Rev. Linda L. Grenz)

  10. Linda, thank you for that very helpful comment. I won't respond in detail here, because I am working on a new post that will take feedback I have received from you and several other people, and create a new set of suggestions. I hope to get that done in a day or so.

    Blessings, Susan

  11. Too bad the Presiding Bishop is no longer really simply the President of the House of Bishops, but has taken on the trappings of a Supreme Pontiff. If we believed the polity that we claim to have, our Administration and Governance expenses would be fairly low. However, now that we have to enforce the new canons on discipline, force bishops to litigate property disputes rather than negotiate out of court when possible, and put out Easter Messages that do not even mention THE resurrection or the name of Jesus, you know, the one who was resurrected if anyone believes in that sort of thing at 815, we have to make sure that our actual polity is well funded.

    On the other hand, given the current economic situation of the Episcopal Church, along with its demographics, and growht trends this may well be the last triennial budget passed at a General Convention of the Episcopal Church. Why not pass this budget that will ensure that we continue on this glorious procession to extinction.

  12. A thought for revrj....I note that the canons on discipline ought to have been in place and enforced years ago and we wouldn't be incurring the legal expenses we now have. True?

    Second, we might want to hold off on the doom and gloom - indeed, if we are so concerned about Our Lord's Death and Resurrection and being faithful to it, perhaps we should see TEC in the same way?

    Third, I continue to see the regular faces each Sunday in my parish and more than a few new ones of all ages...perhaps you need to go visit another parish this Sunday?

    Finally, perhaps its time to deprofessionalize the Church and return to a community of vocations for all members - I suspect this would go far in changing the emphasis on administration and governance to one of mission...