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 susansnook@thenativity.net. 

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:  http://www.tens.org/blog/generation-x-coming-into-leadership. 

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.