Tuesday, March 20, 2012

What Would a Mission-Oriented Budget Process Look Like?

A budget is a missionary document.  Like it or not, the budget states what our true priorities are.  As Jesus said, “Where your treasure is, there your heart will be also.”  Wherever we put our treasure, is where our hearts are guaranteed to end up.  So – it follows that we need to put our treasure where we want our hearts to be. 

So, a budget states our missionary priorities.  Unfortunately, too often, a budget is simply a rehash of whatever happened last year, plus some sort of adjustment for inflation (cost increases, salary raises, or whatever).  Thus, our missionary priorities are built on the backs of the past, and we end up doing whatever we did last year, plus some (or, recently, in DFMS, minus some).  In a paradigm like this, it becomes very hard to turn a very large ship.

So what happens when times change?  When it is time for adaptive change, not just technical change (in Ron Heifetz’ terms)?  When we need to rethink our mission, our actions, and our paradigms?

In a situation like that – which, in The Episcopal Church, is the situation we are in – a same-as-last-year-plus-a-little (or minus-a-little) approach is exactly the wrong approach.  Remember that where our treasure is, there our hearts will be also.  If we don’t change our way of allocating treasure, we will continue inexorably on the course we are on: decline. 

Unfortunately, our budget process in TEC is almost guaranteed to keep us in decline.  If I understand it correctly, it goes something like this:

  • The treasurer's office laboriously estimates next triennium's income, adds up all the expenses it can anticipate, and enters it all in a massive spreadsheet that it presents to Executive Council.

  • Executive Council, composed of a group of people with varying degrees of financial expertise, very little time to work, and lots of other tasks to accomplish, works through the numbers it is given as best it can, asks questions, makes a few changes, and creates a budget proposal.  Of necessity, the budget is based on last year’s expenses, because there has been no overarching consideration of mission - only ad hoc discussions as Executive Council members looked at the numbers they were given.  Council does the best they can with the limited information they have.

  •          The Program, Budget, & Finance Committee takes the proposed budget and begins to massage it.  At General Convention, they hold a series of hearings, at which the best-organized and most unanimous groups, those with the most articulate supporters, get the most air time and attention. 

  •           In the waning hours of Convention, PB&F proposes a revised budget to General Convention.  That budget is similar to Executive Council’s proposal, with pluses or minuses for what PB&F heard in the hearings. 

  •            General Convention may make minor tweaks to PB&F’s proposal, but because the Convention is nearly concluded and cannot adjourn without a budget, the budget passes with little enthusiasm.  This budget may have little relationship to initiatives that were passed earlier in the Convention.  As it turns out, much of the previous legislative work is for naught.  The only thing that counts at an operational level is whether projects were funded.  (Example: at GC ’09, all of the resolutions of the Evangelism Committee, on which I served, were passed with high levels of support.  Almost none of them were funded; the Evangelism Officer, who would have taken on these projects, lost his job; the only project funded was the Latino/Hispanic initiative, which had numerous well-organized supporters speaking in support in hearings and on the floor, and got 10% of its budget request.  Note: I worked hard on the Latino/Hispanic resolution, and supported it enthusiastically.  But I supported the other Evangelism resolutions also, and they all died for lack of funding.) 

  •          The church continues to trundle on, with enthusiastic dreams not funded.  In fact, some of those dreams may never have been articulated because some of the folks most deeply involved in the ministries were never consulted.  The ship goes meandering slowly on, in the same direction it was already going. 

So what would a mission-oriented budget process look like?  First of all, we need to do away with the assumption that what we did last year should have any relation at all to what we do this year.  No more last-year-plus-a-little.  And for that matter, no more last-year-minus-a-little.  No references to last year at all. 

Now I realize that I am not an 815 insider, or an Executive Council insider, or any kind of expert on the inner workings of DFMS.  But, to me, this is not rocket science.  In the financial straits we are in, it is vitally important that we ensure that our limited financial resources go to fund mission priorities that can transform the church.  After all, where our treasure is, there our hearts will be also.  A mission-oriented budget approach might look like this:

  • At the beginning of each triennium, Executive Council undergoes a visioning process.  In the light of decisions made at the last General Convention, what should be the priorities of the church?  Where is God leading us at this moment in our history?  Where does God want our hearts to be?  That's where we need to put our treasure.  Executive Council names its top mission and budget priorities for the coming triennium.  

  •            Next, Executive Council asks each department or mission group also to undergo a visioning process, in conjunction with the group’s networks of influence in the wider church.  The Formation Officers, for instance, would work within their own group and would also consult with groups like NAECED (now Forma).  The Stewardship Officer would consult with The Episcopal Network for Stewardship and the Episcopal Church Foundation.  What is their mission, and what activities are vital to achieving this mission? 

  •           Once each mission group has defined its mission, ask them to explain how their mission helps to further the church’s mission.  For convenience, General Convention has already defined TEC’s mission as the Five Anglican Marks of Mission.  Executive Council might choose to add other vital components of the DFMS mission, such as relationships with other churches of the Anglican Communion, ecumenical relationships, governance by all orders of ministry,  fiscal responsibility, etc.  Each mission group needs to explain how their mission helps to advance Executive Council’s defined components of mission.

  •            Now that each mission group has defined and justified its mission, it needs to explain what its mission will cost.  It will do this in two interrelated ways:

o   Its basic budget request.  What is the bare minimum amount the mission group needs to fulfill its mission?  What would allow it to do maintenance and no more?  The group needs to justify the full amount it is requesting, line by line, position by position.  It must be an absolute rule that its request does not refer to last year’s budget.  This is the basis of zero-based budgeting.  Your request starts from zero, and you justify it from there. 

o   Its “dream” request.  If there were no limits in resources, personnel or time, what would the group like to achieve?  How could they creatively work with other church networks?  What would they love to do, if only they could?  Let them dream about the possibilities.  Then let them put a dollar figure on the possibilities, with a full explanation of what the dream projects would accomplish.  If the group has no dreams – well, that speaks for itself. 

  •            Please note that every mission group that needs funding must go through the same process – every administrative department, every CCAB.  What are they hoping to accomplish to further the church’s mission?

  •            Executive Council may have some dreams of its own – a development office, say, or ensuring greater fiscal responsibility by paying down some debt.  Executive Council will also have to articulate these dreams and how they help to advance the church’s mission. 

  •            Executive Council’s budget group receives the mission statements, the definition of how those missions achieve the church’s priorities, the basic and the dream requests.  The budget group weighs these requests against projected revenue.  And then the budget group begins to set priorities.  How central is the mission of each group to the mission of TEC?  How well has the group worked with other networks in the church to empower diocesan and local mission?  How captivating are the dreams?  How do all the amounts balance out, dreams against dollars?  Are there some big dreams that can be achieved for moderate dollars, or very few dollars?  Fund them!  Are there some big dollar amounts that don’t seem to map well to the church’s mission priorities?  Eliminate them!  Executive Council creates a budget that uses the funds available to meet the mission priorities that are most vital.  Administrative support is funded as necessary to support other mission groups. 

  •             Executive Council creates a budget and forwards it, along with all the budget information, including dreams and mission statements, to PB&F.  This communication process will be very important, perhaps requiring in-depth meetings so that PB&F members can hear what exciting and vital things are contained within this budget proposal.  Mission groups who want to have their dreams funded will work with networks within the church to have appropriate resolutions formulated and passed, and supporters mobilized to speak in favor.  This will require them to do consciousness-raising work in the wider church. 

  •            PB&F will make a budget proposal four days before the end of convention.  This will be possible because significant advance work will have gone into the dreams and requirements that make up this budget.  This advance proposal will mean that there will be time to make changes on the floor; however, proposed changes must be bottom-line-neutral.  That is, if they propose to increase an expense item, they must cut another expense item or increase a revenue item to counterbalance it. 

  •            With plenty of time to consider, General Convention will decide on the budget.  It will be Executive Council’s job to communicate the dreams and priorities and hold the mission groups accountable to achieve what they said they would achieve.  Employee evaluations, raises, and continuance of employment will be based on these benchmarks. 

Under this revised budgeting method, you have not assumed that last year’s assumptions will still hold true.  You have a group of people that has worked hard to understand its own mission and how it relates to the mission of the larger church.  You have employees and networks that have dreamed about the possibilities and about ways they can achieve them. You have begun to point a very large ship in a whole new direction.  

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