Budget Formation Task Force: Changes in the Draft Budget for 2019

Dear Colleagues in Christ,

In the June 20 diocesan newsletter you will have seen an article entitled, “Aligning Budget with Mission: 2019 Proposed Budget Released.” That article included a link to the Draft 2019 Diocesan Budget. This letter is from the Budget Formation Task Force and goes into greater detail about the changes in this draft budget for 2019.

The initial 2019 budget had requests exceeding income by almost $400K. The current proposed budget is balanced. That is due, in large part, to the efforts of Bishop Jennifer, the Executive Council and my colleagues on the Budget Formation Task Force which include: Tom Wood, Treasurer; Fr. Steve Fales; Laurel Cornell; Lara Dryer; and Canon Brendan O’Sullivan-Hale.

As you think about the 2019 budget, and, perhaps the 2020 budget, I encourage you to think about them in terms of transition. As the bishop and the Executive Council articulate the direction of our diocese, the budget and budget process will follow their lead. There are a number of specific changes in the direction of our planned spending this year, and next year I would anticipate a change in the structure of the budget layout to be more in tune with what is coming to be known as, “The Work Set Forth.” One way that “The Work Set Forth” will be put to use in the 2020 budget is that every line item will be categorized under one of the five pieces of that work:

  1. Beacons of Jesus Christ (strategy and mission)
  2. Generous invitation and welcome (evangelism)
  3. Connect with one another and the world (communications plus networking/convening)
  4. Stand with marginalized and vulnerable, transform systems of injustice (social justice, outreach, community organizing, racial healing)
  5. Resource clergy and lay leaders for church of today and tomorrow (congregational development, Waycross, leadership resources)

To reformat the Diocesan budget for the future in this fashion will be an important investment of time and will require the focus and care of all the folks mentioned above. In the meantime, we continue, degree by degree, to chart a new course.

Following is a list of items in the budget to which you might pay particular attention. We were faced with an interesting challenge of stewardship. We have $3.8M in income and we still needed to “trim” almost $400K in order to make the budget balance, which is required by diocesan canons. At the same time, we have striven to include creative initiatives which introduce new paradigms of ministry to our worshipping community. Putting this budget together has helped identify areas where we want to invite larger, imaginative conversations about fresh models of congregational and missional sustainability.

Budget Items of Change or Special Interest Income Side:

  1. Line 1 – The recommendation is to keep the apportionment at 14% for 2019. This will result in a reduction in income of about $20K.
  2. Line 7 – The recommendation is to keep the draw from invested funds at 5.25%. This will increase income about $76K. This is not our preferred choice. A sustainable rate of draw is 5% or less.
  3. Line 13 – This amount is from items in the 2018 budget which for various reasons are not anticipated to be used.
  4. Line 14 – Bishop Jennifer has requested that we set a goal of raising $30K as part of a new Annual Fund line item.
  5. Line 36 – Total income for 2019 will increase by almost $59K.
  6. Line 56 – Savings from consolidation of technology of $12K.
  7. Line 60 & 60.1 – Funds from Leadership Development will be moved to create a line item called Seminarian Internships.
  8. Line 61 & 61.1 – Ministry in Higher Education and Matching Funds. This is going to be a major change: Following Bishop Jennifer’s lead for the diocese, it was decided that Campus Ministries should adopt a pattern of raising a portion of their own funds. (Line 61) Ministry in Higher Education will be reduced to $82,103. Matching funds will be made available in the amount of $10K, which, when matched, will equal $20K which, when added to the original funding, equals $102K which is, in effect, equal to their grant from last year.
  9. Line 63 – IU Campus Ministry Mortgage increase. This was expected.
  10. Line 67, Line 68, Line 69, & Line 181. In an ongoing effort to be transparent in the budget, the line item known as “Mission Strategy” (67) goes away this year. A significant portion of those funds will move to “Direct Parish / Mission Support” (68).  Another portion of those funds, $50K, will fund a new line item “Strategic Resources for Congregational Sustainability and Discernment” (181).
  11. Lines 97-101 – Pathways Clergy (Phase 2) – This strategic initiative continues the Diocese’s commitment to the Pathways Program and helps align the Diocese to be eligible for future grants from the Lilly Endowment.
  12. Line 114 & Line 139 – Medical Insurance Expense – Exact medical premiums will not be available until the end of August, so this is a place holder based upon historic values.
  13. Line 152 – After a lengthy hiatus, the Archbishop of Canterbury has announced a Lambeth Conference for 2020. This line item will continue to accrue funds for Bishop Jennifer’s travel expenses.
  14. Line 168 – There seems to be some question as to whether provinces will exist after General Convention. If they do, we will revisit this line item.
  15. Line 169 – The Cooperating Ministries’ greatest advantage is being able to access benefits through the church. They will continue to receive $1K each to ensure their ability to access benefits.
  16. Line 171 – The Episcopal Fund for Human Need [EFHN] – Reduced to encourage fund raising (in concert with the Diocese) which has been the historic norm for EFHN. A committee being led by the Rev. David Guilfoyle is developing a strategy to make both the fundraising and granting process more robust going forward.
  17. Line 179 – Very little of the anti-racism line has been used recently. Racial reconciliation is a priority for the diocese. This line item will be re-evaluated as program needs become clear.
  18. Line 182 – Replenishment of the fund to help congregations match Center for Congregations matching grants.

As we think about “The Work Set Forth,” I would like to applaud the Executive Council for their perseverance. We continue to be excited by Bishop Jennifer’s energy and the vision that is emerging under her leadership. We are deeply committed to this work and the long-term strategic thinking it requires.  It is gratifying to be a part of this group.

The Budget Formation Task Force will meet again on August 27 to consider any requests for revisions and to finalize a balanced budget to be presented to Executive Council on September 15. Once the budget has been approved by Executive Council it will then be ready for the fall deanery meetings. I will be happy to make the rounds to the deanery meetings and pleased to schedule them on a first come, first served basis.

Thank you for your prayerful consideration of this Draft 2019 Diocesan Budget.

Yours in Christ,

C. Davies

The Rev. C. Davies Reed,
Chair, Budget Formation Task Force