Wednesday, May 2, 2012

About That Elephant

See Part One of this Series Here:  Deck Chairs.
See Part Two Here:  Will the Real Subsidiarity Principle Please Stand Up?

In our continuing series about how to spend The Episcopal Church’s money strategically, to empower mission, ministry, and evangelism, today we are addressing the burning question:

  • What should we NOT be spending money on?

I will try to restrain myself from gleefully rubbing my hands together.  So many living room elephants to choose from – so little time!

Look, we don’t have enough money to do all the things the Church Center has done in the past.  Where to cut?  Two major arguments have been advanced:  cut governance (because it is too costly and cumbersome), and cut program (based on the subsidiarity principle). 

What huge white-elephant category of expenses is being ignored by both the anti-governance and the pro-subsidiarity arguments? 

Administration.  Administration at the Church Center is getting a free pass.

A few weeks ago I did an analysis of the proposed budget that divided it into 7 categories: the five Marks of Mission categories, and two additional categories: (6) Administration and  (7) Governance.  Since then, I have refined my analysis.  Some folks have rightly pointed out that the five Marks of Mission categories don’t include a classification for Other Good Things – like ecumenical relations, which everyone agrees should be done at a churchwide level and which aren’t really administrative in nature.  (I had included these costs in administration because there was no Marks of Mission category to put them in.) 

Therefore, I have added two new categories to my analysis:  (8) Building Religious Relationships (including ecumenical relations, Anglican Communion relations, and Federal Ministries); and (9) Stewardship & Leadership Development (including the Development Office, Congregational Vitality, Transition Ministries, the Office of Pastoral Development, etc.).  With these two new categories, the proposed churchwide budget breaks out as follows (if you would like to see my calculations, please email me at

Anglican Marks of Mission                                                 Amount         Percent

1. To proclaim the good news of the Kingdom                $  2,283,270      2.15%
2.  To teach, baptize, and nurture new believers               $     286,438      0.27%
3.  To respond to human need by loving service               $26,428,618     24.91%
4.  To seek to transform unjust structures                          $  4,600,551      4.34%
5.  To sustain, renew life of the earth                                  $     106,470      0.10%

Not included as marks of mission, but categorized as:
6.  Administration                                                                 $46,823,109    44.13%
7.  Governance                                                                      $12,298,810    11.59%
8.  Building Religious Relationships                                    $  5,207,010      4.91%
9.  Stewardship and Leadership Development                   $  8,067,497      7.60%

Do you see what I see?  After all is said and done, the glaring enormous over-inflated budget item is not Christian Formation, not at all.  It is Administration.  When pared down as noted above, it comprises over 44% of our churchwide budget. That doesn’t even count the cost of General Convention!  

Yes, Administration is the same category of expenses that gives us a finance office that costs over $7 million to run and can’t add a budget spreadsheet up correctly.  (I am sorry to have to point out the obvious.  I would rather be churchy-nice and not point out or ask for accountability for expensive mistakes.) 

It is also the same category of expenses that brings us an office building in Manhattan, the most expensive real estate on earth, based on that old Eisenhower-era hierarchical corporate headquarters model.  Based on the proposed budget, the costs of operating that piece of real estate are:

            Debt Service                                                  $ 8,700,000
            Facilities Management                                 $ 6,443,156
            Offset by Rental Income                              ( 4,050,000)
            Net Cost                                                        $11,093,156

I do not understand why we are going after Program Expenses before we go after the hyper-inflated costs of administration at the Church Center. 

Here’s what I propose: 

  • Sell, lease, or otherwise dispose of 815, and look for a more economic alternative elsewhere, such as using vacant space at cathedrals, seminaries, etc.  This will take some time, so it won’t save us money immediately – we need to understand this.  But there’s no more time to dither about it!  Do it!
  • Reduce the asking to the dioceses, and cut the total budget to $101 million (right now it stands at $106 million, counting the Development Office error explained here – it is a deficit budget of $1.25 million). 
  • Require that administrative expenses comprise no more than 35% of the 2013-2015 churchwide budget. That’s a significant decrease from the current 44% of the budget. In 2016-2018, the administrative percentage would be required to drop to 30%.  The phase-in allows some time to study the situation and make adjustments necessary.  (Note: the percentages depend on the way I have classified administrative expenses: for instance, I have included Communications, part of the cost of the PB’s office, etc.  If you quibble with the way I have calculated administration, fine, but if we change that, we need to change the percentages too.)
  • Freeze salaries at the Church Center.  The proposed budget includes across-the-board salary increases of 3% per year.  How many folks working for local churches get that kind of guaranteed raise these days?
  • Look into outsourcing certain departments like Human Resources, streamlining personnel in administrative departments, or other strategies for reducing administrative costs. 

Yes, we can also streamline governance expenses.  I am skeptical of the idea of holding a Special Convention (very expensive and unlikely to produce real change unless it is preceded by a real visioning and change process), but I certainly believe that we can “sunset” some CCABs and significantly reduce the expenses of others.  And we can consider ways to reduce the cost of General Convention itself, such as allowing much work to be done beforehand, electronically, or reducing deputation size. 

However, we cannot count on any cost savings for these possible changes in the current triennium, because they would require a constitutional convention, and no changes would take place this triennium. 

What we can do, right away, is address the unacceptable level of administrative expense at the Church Center.  We can make a real decision to sell 815 and move to a less-costly alternative, and we can realign our staffing structure, outsourcing some departments and streamlining others.  

We can do it because it’s worth it.  Because you and I aren’t writing those pledge checks every week so we can maintain  $46.8 million of administrative expenses.  We’re writing them because we believe in the mission, ministry, and evangelism of this church.  What we have is worth sharing, and it’s worth spending money on – strategically.  But not on elephants.  

Stay Tuned for Tomorrow's Post: Empowering Mission.


  1. Constitutional changes can only be done at a regular meeting of General Convention (not at a Special Convention) according to Article XII

  2. Once I suggested, in my innocence, that perhaps moving the central office from NYC and down to Washington DC to use the now empty fascilities of the College of Preachers and some of the other empty space around Mt St Albans. The reaction was ... interesting. It was, in all but one persons responce, overwhelmingly negative. Nothing about practicalities, but one person became quite excited that doing so would "ruin" the ecumenical and interfaith atmosphere at the National Cathedral. She was also one of the persons who expressed dimay that TEC already used it to much for it's "private" activities.

  3. Thanks for the correction, Ann. John, my hope is that the anxiety over budget and structural issues this time around will make it possible for us to get over inertial forces like the situation you describe. We'll see - never underestimate inertia!

  4. I wonder what the percentages for each area would be be if such a financial analysis was done for the entire Episcopal Church: parishes, dioceses, and national church. It is possible that, as Episcopalians, we are doing much more in those other areas than it appears because it is happening at other levels of the church. "Administration" is the glue that holds it all together.

    I'm not saying the numbers would look much better than your percentages, but they would look different. The numbers could be worse. Local parish budgets probably have an even larger percentage for administration.

    I'm not saying you are off base in asking this question. The question MUST be asked at all levels of the church. We may discover where our hearts really lie because of where we put our treasure.

  5. Thanks for the comment. Naturally you are right that the Church Center does only a small amount of the church's mission. I'm sure the percentages would be different if you included all levels - but I still don't think that spending $46.8 million on administration gets us much in return. I would much rather see that money go to empowering mission, either by reducing the asking from dioceses, or by direct grants for mission.

  6. Susan ~

    Thank you for your time, energy and passion for this work. You've taken some seriously overwhelming information and presented it in comprehensible, digestible bits.

    Diocese of Wyoming
    GC Lay Deputy

  7. Susan, thank you, thank you, for stating this in such simple terms for us. Question: does your analysis break down the necessity of some of the administrative costs to equip mission? I know we often forget the light bill when we point to monies spent on outreach ministries at the church. We leave out the expense of the parish administrator who facilitates communications. That kind of thing. I really like where you are going with this but curious about how we separate out administrative costs.

    Marian Fortner
    Diocese of Mississippi
    C4 Deputy

  8. Hi Pamela, thanks so much for your comment. I really appreciate it!

    Marian, great to hear from you. You make a good point. Of course administrative costs are necessary. As you say, the secretary, the sexton, the bookkeeper, etc., are important jobs that someone needs to do in any church. A lot of what any rector or vicar does is administrative, in fact. And our churches often maintain large buildings so that people can gather, because gathering is at the center of what we do. Administrative costs are obviously also necessary for the churchwide structure - accountants, communicators, directors, etc. But I question why they have to be so high. And I really question the need for the large building, in this case. The churchwide structure doesn't "gather" the way a local church does; a building is not the least bit central to what it does. We actually use very little of the building, renting out part of the rest, and pay huge costs for a building in a very expensive location. And of course we have to pay higher staff costs so employees can afford to live in that location. In recent years, a number of Church Center employees have been located in satellite offices, and that has worked just fine. I think we need to move away from a "corporate headquarters" model, toward a leaner Church Center in a less-prestigioius location, whose job is mainly to empower ministry at the local level, rather than "do" ministry on behalf of the rest of us.

    See you at Convention! Susan

  9. I know of a wonderful facility in Falls Church VA that would be perfect for a national HQ. Big sanctuary that would be perfect for hosting convention (no costs to rent a hotel!), close to DC and the corridors of power, and ties to George Washington. What could be better? ;-)

  10. Ann is correct about Constitutional changes, but Article I.7 only mandates that regular meeting happen at least every three years. If we decide to make Constitutional changes and we don't want to wait three years to effect them, we can hold a regular meeting sooner.