Diocesan Administrators Call for Reform of National Apportionment
Episcopal News Service. October 22, 1993 [93184]
David Skidmore, Director of Communication in the Diocese of Chicago
The current system of funding the national budget of the Episcopal Church was scrutinized at an open hearing of national and diocesan staff in Chicago on October 7 -- and it was clear that dioceses are pressing hard for some dramatic changes.
The open hearing was scheduled by the General Convention's program, budget and finance committee (PBF) because of severe stress at the diocesan level in meeting the apportionment without sacrificing diocesan programs. The hearing is part of a listening process that will shape the committee's report to next year's General Convention.
The 18 diocesan administrators, executives and financial officers who participated in the hearing shared moving stories illustrating the pain and frustration in making difficult choices. The Diocese of Louisiana, for example, has been struggling for eight years in a row with a $20,000 to $30,000 shortfall in congregational pledges to the diocesan budget. Last year congregations pledged $791,848 for diocesan operations but came through with just $767,441, forcing staff cuts. The cost cutting has left the diocese with just two full-time staff -- the bishop and canon to the ordinary, and a mostly empty two-story office building open just four days a week.
Reluctantly, Louisiana has had to dramatically scale back its giving to the national church in order to fund essential functions, said diocesan treasurer James Wyrick. Until 1985, the diocese consistently, and proudly, paid its full apportionment, he said, but when the oil recession shriveled payrolls and sent residents on job quests to other states, the diocese cut its national support to the point where the diocese is able to pay less than a third of its annual apportionment. "Our quota is $255,000 and our giving stands at $79,000," said Wyrick. "That's pretty sad."
Two thousand miles away in the Diocese of California, the fallout from budget-breaking insurance premiums, an aging infrastructure and languishing membership growth has forced the diocese to put the brakes on new program development and cut existing programs. For 1994 the diocese is cutting out some grants programs, reducing its clergy training program and freezing salaries for the top four senior staff positions, including the bishop.
This latest setback adds to a general downturn that began 25 years ago when the diocese was divided to create the Diocese of El Camino Real from its southern half. Membership fell by more than half, and the number of congregations dropped from 124 to 85, the mathematical consequence of any new diocese formation. But not so easily explained by mathematical ratios has been the drop in the clergy ranks. Even accounting for the transfers to the El Camino diocese, clergy numbers since the split have fallen by 50 percent in the Diocese of California.
"As a result of the deep financial trouble, we are discovering that every year we have to close, sell, merge or convert to part-time ministry one or more of our congregations," reported the Rev. Canon William Geisler, controller for the diocese. "That has been happening on a regular, systematic basis. We have at all times property for sale which represents the liquidation of parishes and missions. We are at all times converting parishes to missions, and missions to part-time work."
Despite the mounting financial constraints, the Bay Area diocese has not elected to shortchange the national church. It still meets its full quota, which at $460,000 is the diocese's biggest single expense, far overshadowing its next largest outlay which is a $300,000 lifeline to struggling missions.
Mission support, a high priority for most dioceses, has become something of a scapegoat for the 15 or so large congregations that bear the brunt of diocesan budget support. The diocese, said Geisler, has responded to their concerns by aggressively moving missions towards self-reliance or closure and by moving to a more liberal assessment in 1995 -- 5 percent of the first $40,000 of congregational income, and 20 percent for anything over that. The move will mean $100,000 less in the diocesan budget.
At the current rate, the future does not appear to be a bright one for the diocese. Geisler predicts that by the turn of the century, full-time clergy in the diocese will number no more than 40, that only 15 congregations will have paid, full-time clergy and staff, and that mission congregations will be led by retired priests.
To keep the situation from deteriorating further, more money must be freed up from the national apportionment, maintained Geisler. He said that the 1995 budget will be designed on the "perhaps false" assumption "that the national church will be radically restructured. We plan to continue to pay but on the basis that the national church budget for the next triennium will reflect a major reduction."
Downsizing national church operations is a remedy prescribed by Wyrick as well, who in an interview after the hearing said that the national church headquarters in New York City "will have to look seriously at cutting out more jobs. A lot of dioceses have done it; a lot of businesses have done it."
The Episcopal Church Center has already trimmed over 50 staff positions in 1991 to meet a million dollar shortfall, and streamlined its bureaucracy by a departmental reorganization. But for diocesan administrators faced with making even deeper cuts in diocesan staff and programs, a more fundamental change is needed at the national level, one that revamps a funding process perceived as inequitable and punitive towards dioceses whose actual income falls well below the projections on their spreadsheets.
Under the present system, dioceses are assigned a quota by the program, budget and finance committee based on the total net disposable income (NDI) of their congregations. To fund the current triennium's budget (averaging $43 million a year), the quota is calculated on 3.75 percent of a diocese's congregational NDI. The problem, say diocesan administrators, is that the formula doesn't take into consideration the different funding approaches used by dioceses and, particularly in recent years, the significant shortfall in what congregations pledge or are assessed and what they actually contribute to the diocesan budget.
This can result in dioceses with substantial investment and endowment income shouldering a smaller relative share of the national church expense than dioceses whose budgets are built almost entirely on pledges or assessments of congregational income. More problematic for financially stressed dioceses is that the NDI approach can siphon off a disproportionate share of diocesan income for the national apportionment.
The Diocese of Washington, for example, has seen its income steadily decline the past three years but its national apportionment hold steady. As a result, one-half of its budget now goes to support the national church.
"The national church is basing the formula on the parochial reports, not the funds that flow into the diocese, and it seems to me there should be a recognition of that," Washington's treasurer August Palmer told the committee.
Most of his colleagues agreed. At the end of the hearing the committee polled the 13 diocesan administrators still present on whether the funding of the national apportionment should be based on diocesan income. All but one agreed.
Though not present at the hearing, the Diocese of Southern Virginia's treasurer Ross F. Hawkins told the committee in a letter that his diocesan council had voted October 2 to unilaterally base apportionment to the national church on diocesan income. In each of the past two years the diocese has been forced to cut $100,000 from its budget because of a decline in congregational income under their voluntary apportionment, he explained. And the diocese in turn has been forced to cut $44,000 from its apportionment to the national church.
The lone voice opposing a diocesan income based apportionment came from the Rev. Canon Carl Gerdau, director of ministry, deployment and communications in the Diocese of Chicago. Gerdau, who testified by letter, argued that changing the formula "penalizes those places where work beyond the congregation at the diocesan level is well-supported," while on the other hand rewarding congregations that hoard their income for parochial needs.
The proposal for a more equitable distribution of the apportionment burden also had considerable backing, even from those administrators whose dioceses would be subject to a higher, not lower, quota.
"If the apportioned fair share is to be truly fair, then all unrestricted income regardless whether it is at the diocesan or parish level should be included in the formula," said Michael McPherson, chief administrative officer for the Diocese of New York. "To only include receipts for general purposes in parishes, and to specifically exclude diocesan unrestricted income, just isn't fair and denies the diocese the opportunity to share its wealth throughout the church."
Describing his diocese as "a collection of poor congregations blessed with a handful of wealthy parishes" and one saddled with a $12 million deficit, McPherson said that he is aware that if the current capital funds drive is successful, then under his proposed change to the national formula New York would be writing an even larger check for the national budget. But it would be an equitable apportionment, he added, "and we would gladly pay for it."
Equity was also emphasized by the Diocese of Olympia's executive officer, the Very Rev. Gerald Porter, in his argument for both employing a wider income base in calculating diocesan quotas and basing the formula on diocesan income. Echoing an earlier statement by the Diocese of Maryland's executive officer, Porter said the apportionment issue reflects the ongoing erosion of the diocesan mission as the focal point of the Episcopal Church, and the theological crisis confronting the wider church in which a theology of abundance is losing ground to a theology of scarcity.
"It's not only a mathematical situation," said Porter. "I think it's a theological situation because the diocese in our tradition is the primary unit. We are not a congregational church, and we ought to reflect this in how our funding system works for the wider church," he said. "I say this knowing full well it could cost us more money. We may pay the price for it but it would still be the right thing to do."
Doing the right thing also entails an appeals process for dioceses that can't afford to pay their full national apportionment, said Porter. Currently, 60 of the church's 117 dioceses are not paying their full quota, he noted.
Providing apportionment relief on a national scale appealed to several administrators present. Geisler suggested setting up an appeals board composed of diocesan treasurers, a framework similar to the budget review panel of Coalition 14 during the years it served as a conduit for national assistance to struggling rural dioceses. In his diocese an appeals process allows compassion to be a factor in assessing congregations, Geisler said, which helps mitigate resentment over what could be a purely mathematical process.
But for committee member Bishop Don Wimberly of the Diocese of Lexington, an appeals process would prove moot if dioceses continue to lack confidence in the present funding process. Besides, he pointed out, an appeals process wouldn't add much relief given that 60 dioceses are already reneging on their commitments, "and therefore are creating an appeals process of their own."
Among other proposals put forward was the suggestion that the committee recommend the practice of dioceses operating under a voluntary apportionment in which a budget isn't developed until the congregational pledges are counted. Episcopal Church treasurer Ellen Cooke pointed out that General Convention deputies, by adopting a triennial budget, are in effect making a pledge on behalf of their dioceses.
Rather than tinkering with the budget process, the church needs more accountability on the part of its dioceses, said Wimberly. "To me the most alarming thing is that 51 percent of the dioceses have been going back and determining their own funding to give to the national church budget after their deputies have approved the other way...To me that is where the critical problem is and I think that is the issue we really have got to come to terms with."
To reverse the present budget process would run counter to the ecclesiology of the Episcopal Church, said Bishop George Hunt of Rhode Island, a member of the PBF committee. "I've never considered the asking of the national church to be an optional thing. I take it as a bald-faced assumption that it will come off the top," he said.
As Episcopalians, Hunt added, we are obligated to mutual support of congregation, dioceses and a national church structure, "and it is a given that it is going to cost us more money."
Mutuality also figured in the criticism of a number of diocesan administrators towards an ill-defined sense of mission on both the national and diocesan levels. Congregations are increasingly seeing their relationships with their dioceses and the national church as a one-way street, they said.
In the Diocese of Maryland the diocese and national church are targets for suspicion and hostility said diocesan executive officer, the Rev. John Kitagawa. Ignorance is the primary culprit, he said "but it is also clear that there are folks who feel there is a great lack of clarity about the mission of the diocese and the national church." The church is on the verge of an ecclesiological crisis over the question of whether the basic mission unit is the diocese or congregation, said Kitagawa, and increasingly, Episcopalians are choosing congregations as the focal point.
"It is in the local congregation that they are invited and led into a deeper fellowship of faith, into a deeper relationship with Christ," Kitagawa said. The diocese and national church no longer seem as relevant to the ministries of the local congregation, he asserted.
In the Diocese of Dallas the distrust is focused on policies and pronouncements of the presiding bishop and national church leaders that are at odds with the more traditional views of diocesan members. More important than the question of equity is what the national leadership is saying at a given moment, said the Rev. Paul Lambert, president of the diocesan standing committee. "It affects the people who are doing the voting. They may not understand the budget and how it works and what you do with the program, but they read newspapers."
In 1991 Dallas withheld $250,000 of its national apportionment in protest over the presiding bishop's statements supporting gays and lesbians in the church and General Convention's decision not to mandate exclusion of homosexuals from the ordination process, according to Lambert. "Many of us in the diocese at that time were not proud of that," he admitted. Last year, Lambert said, delegates to diocesan convention voted down an effort to again suspend payment to the national church.
The sentiment now, said Lambert, is for a more equitable disbursement of national resources, one that acknowledges assistance for AIDS ministries or ethnic ministries, for example, as being "just as valid in a rural parish in East Texas as it is in a parish or mission in New York, New Jersey, or Colorado."
For Kitagawa, the way to bridge the growing chasm between dioceses and the national church may not require rejuggling of apportionment formulas and reshuffling the church's bureaucracy, but something as simple and powerful as a change of heart. "More sensitivity of the national church to the economic problems of dioceses would go a long way. If you can communicate the concern then I think every diocese would be willing to support that level of funding of the national church."