Exits from the church, COVID led to steep budget cuts

December 3, 2021 | ONE News

What do the predicted denominational rift and unpredictable pandemic mean for the end result of the United Methodist Church?

The Committee of the General Council on Finance and Administration tackled the issue as members reconsidered the budget for the entire denomination to go before the upcoming General Conference.

The board of the financial agency was already preparing to send the lowest budget in more than 30 years to the legislative assembly. On December 1, with 18-1 votes, the board approved an additional reduction in the proposed four-year budget to a total of about $ 407.3 million for the period 2023-2026.

This marks a reduction of almost 33% – a third – of the General Conference budget approved in 2016 to support ministries across the denomination.

The current proposal would also be the lowest budget submitted to the General Conference since 1988, according to the Denominations’ Archives and History Commission. At the time, the denomination had about 3 million fewer members than it does today and had yet to establish an African University, which is now supported by denomination funds.

However, board members stressed that the budget proposal is still ongoing and could be further amended.

They are trying to get a clear picture of what the financial base of the denomination will look like in the near future – and the fog of strangers obscures their view.

After decades of intensifying the debate on LGBTQ inclusion, the upcoming General Conference is facing multiple proposals to separate the denomination.

But no one knows how long the congregation will leave if the separation plan passes. Similarly, no one can say when the deadly pandemic will stop disrupting lives.

“Those are projections for things we’ve never done before,” said Christine Dodson, vice president of the GCFA board, which is a member of the denomination’s budget advisory team. She is also the Treasurer and Business Manager of the North Carolina Conference.

“We have no data on how the pandemic and abandonment will affect our churches in the future.”

The committee has educated speculations from the leaders of American conferences, regional bodies that provide the lion’s share of funds for ministries across the denomination. In both 2020 and this year, the GCFA surveyed conference treasurers, bishops, district overseers, and others to gain a better sense of the financial impact of congregational allocations.

Based on this year’s survey, the financial agency now estimates that the denomination will lose about 25.5% of the net expenditures of local churches in the United States by 2025. That is a bigger loss than predicted in last year’s survey, which sought estimates only by 2024.

One of the graphs presented during the GCFA 2021 autumn committee meeting shows how the basic percentage used in calculating divisions – required church donations – has declined since the 1990s. The GCFA Committee agreed with the recommendation of the Budget Advisory Team to use a base percentage of 2.7% in the next four-year budget. Graphically courtesy of GCFA.

The results of the research do not mean that the conferences expect that more than a quarter of the American united Methodist churches will leave or close in the next four years. Net expenses can vary greatly depending on the assembly and circumstances.

What the results mean is that the leaders of the conference predict that the departures and closures of churches will lead to a significant drop in one of the key factors used in determining the denomination’s budget.

As it stands now, some churches are already leaving without waiting for the General Conference to react.

The GCFA reports that in 2020, 32 American congregations separated from the United Methodist Church. But that represents only a small fraction of the more than 31,000 united Methodist churches of the denomination nationwide.

Rev. Steve Court, a member of the GCFA board and former director of liaison ministries for the Eastern Ohio conference, told the committee he thinks net expenditure estimates could be too negative about what the future holds.

“I just want to keep emphasizing that because it has a real impact on the ministry on the level of cutting that we are doing at the moment,” he said.

North Texas Conference Bishop Mike McKee, chairman of the GCFA committee, agreed with the Court that the estimates are far from definitive. McKee said conference leaders tend to answer the exclusion question very differently depending on their role.

“This is going to be very difficult to predict,” McKee said. “I think people will walk more than churches.”

However, he added, he does not know a better way to project the budget.

In other actions

In addition to its work on the denominational budget for 2023-2026, the General Finance and Administration Council Committee also approved spending plans for 2022 to various ministries of the United Methodist Services.

The GCFA Board never expects a collection rate of 100%. Conferences have also started paying out shares in anticipation of a reduced budget and its new allocations. With that in mind, most United Methodist agencies have planned a collection rate of between 60 and 65% for 2022. The General Council for Finance and Administration has predicted a collection rate of 50%. Most agencies plan to reduce their reserves in 2022.

During the closed session, the GCFA board also approved the sale of the financial agency’s headquarters at 1 Music Circle North in Nashville, Tennessee. Negotiations are underway. The agency plans to release details once the sale is complete.

Read the GCFA press release.

Board meeting from November 30-Dec. 1 was in itself a symbol of the uncertainty the group faces. Until the day before the meeting, most members planned to be in Nashville, Tennessee, for the first personal meeting of the group since COVID-19 closed travel in mid-March 2020. However, a growing number of COVID-19 cases in Nashville led the committee to cancel the hybrid format and meet exclusively online.

The pandemic has also wreaked havoc with the General Conference, which usually passes laws – including the denomination’s budget – every four years. Coronavirus has twice forced the postponement of the international assembly from the original dates for 2020, and has questioned whether the big meeting can continue as it is now planned from August 29 to September. 6 in Minneapolis.

Meanwhile, the Judicial Council – the denomination equivalent of the Supreme Court – has decided that the budget allocations approved by the 2016 General Conference remain until the Legislative Assembly approves the new allocation formula.

With so much in the air, the Commission at the General Conference asked the GCFA board to give delegates the opportunity to vote on a budget that could last a denomination until 2026.

The budget approved by the General Conference is allocated to conferences, which in turn seek divisions – shares of donation – from their local churches.

The GCFA requests allocations from each U.S. conference based on a formula that includes the net cost of the local church, the economic strength of the conference, and a base percentage approved by the General Conference.

The GCFA Steering Board asks the forthcoming General Conference to reject part of the formula on economic strength and significantly reduce the base percentage.

Budget planning is a multi-step process, and the votes of the GCFA committee on December 1 are just the beginning. The next step is allocations.

The proportions support seven denomination funds.

On December 1, the GCFA committee made recommendations on the distribution of two – the Episcopal Fund, which supports bishops, and the General Administration Fund, which supports the General Conference, the Judicial Council, the Archives and History, and the financial agency itself.

It is now up to the Connectional Table, the church leadership, to recommend allocations among five other funds.

These funds include the Fund for Ministerial Education, which supports the United Methodist Seminars and the Development of the Clergy; The Black College Fund, which supports 11 history schools affiliated with the Black Church; The University Fund of Africa and the Inter-Denomination Fund, which supports ecumenical work. The largest is the World Service Fund, which supports the work of eight general church agencies and the Connection Table itself. The World Service Fund also supports the work of United Methodist News.

According to the current budget proposal, Connection Table has about $ 294.8 million to be distributed among those five funds. This is about 37% less than allocated for the five funds within the budget approved at the 2016 General Conference.

The correlation table plans to present its revised allocations to a joint meeting with the GCFA board in May.

The Economic Advisory Committee, a group of financial forecasters from United Methodist, will next consider updating the projections in June.

Based on these projections, the GCFA committee and liaison tables typically continue to adjust the budget until the General Conference meeting.

Finally, the General Conference has the final say on the form of the denomination budget.

Heather Hahn serves as assistant news editor for UM News.

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