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Dioceses Make Progress in Their Stewardship

By Kirk Petersen

The Episcopal Church is highly dependent on contributions from its dioceses, just as dioceses are highly dependent on their churches, and churches are highly dependent on their members. At every step along the income pipeline, some pay more than their proportional share of the budget.

And some pay less. TLC has examined the church’s recent records to determine which dioceses are paying less than their required assessment, and reached out to those dioceses to find out why.

The analysis is based on 103 domestic dioceses, accounting for well in excess of 99% of The Episcopal Church’s income from diocesan assessments.

The overall story is positive, as the number of domestic dioceses in compliance has grown sharply. The Rev. Mally Lloyd, who chairs the finance committee of the Executive Council, told TLC that in 2013, TEC was asking each diocese to contribute 19% of their revenue, but only 44 dioceses were doing so. The “ask” has since been reduced in stages to 15%, and more than 90 dioceses are expected to comply for 2019.

“To me, that’s incredible,” she said. “I think it’s a combination of the General Convention and the Executive Council budget group paying attention and lowering the assessment consistently, and the House of Bishops working hard to get their colleagues to say that if we lower their assessment, [they] will come up to it.”

It may also point to less conflict in the church. Several dioceses reported a decline in the number of parishes and individuals who insist that their contributions not go to The Episcopal Church.

Kurt Barnes, the church’s Chief Financial Officer, said the reduced assessment has caused only a modest drop in income. He notes that moving the assessment from 19% to 15% represents a 21% decline in the total amount of expected revenue. But because of the increased participation, in 2018 The Episcopal Church’s actual revenue from assessments was only 4% lower than 2015, the final year of the 19% assessment. Barnes said based on conservative projections, he expects the revenue to edge up during the 2019-21 triennium and exceed the 2015 level.

Diocesan assessments account for roughly two-thirds of The Episcopal Church’s $134 million annual budget. The Church also has substantial investment income, and collects rent for five floors of its headquarters building near the United Nations in New York City.

The 2015 General Convention adopted a carrot-and-stick approach to assessments – gradual reductions in the rate of assessment, combined with a penalty for noncompliance. The penalty is that beginning this year, dioceses that do not either meet the assessment or obtain a waiver will be ineligible to receive grants or loans from The Episcopal Church in the following year. Any exceptions would have to be approved by Executive Council.

How serious is this penalty? That will vary from diocese to diocese, depending on their inclination to apply for loans or grants. Barnes estimates that in 2018, TEC provided about $5.5 million in grants and loans, to dioceses, individual churches and organizations. This includes $3.9 million in block grants, primarily to financially dependent dioceses. The remainder includes scholarships and grants for campus ministries, church planting, anti-poverty efforts, seminaries, rural churches and other programs.

Several of the bishops and diocesan staff interviewed by TLC said they were focused less on the potential penalty than on a desire to participate in the broader church while still honoring the fact that their members have differing social and theological views.

That focus may shift as soon as specific grant applications are denied in 2020. Barnes said his staff will determine which dioceses have paid the requisite 15% when they close their books for the year at the end of January. The Executive Council, which must approve most grants and loans, will meet in mid-February.

Implementation may be a source of new conflict, given that the council has the authority to approve specific grants despite the new rule.  The council has discussed, but not resolved, the issue that the new rule may end up penalizing churches and individuals who strongly support The Episcopal Church but reside in dioceses paying less than the minimum

As shown in the nearby chart, 12 of the 103 dioceses have made 2019 pledges below 15%. These pledges range in size from 3.5% to 12.8%.

The dioceses range in income from near the highest (the Diocese of Pennsylvania has the third-highest income) to near the lowest (the Diocese of Fond du Lac ranks 91st of 103).

The most theologically conservative dioceses are well represented on the list. The bishops of Albany, Dallas, Florida, and Springfield are members of the Communion Partners, a group devoted to upholding the traditional teachings of the church. Three other domestic dioceses are headed by Communion Partner bishops, but the dioceses of Central Florida, North Dakota and Tennessee have pledged 15%.

Three of the dioceses – Dallas, Pennsylvania and Springfield – are led by bishops who are members of the Living Church Foundation, which publishes TLC.

Most of the dioceses said they were not meeting the 15% pledge for one or both of two reasons: financial hardship, and a demand from some parishes that their diocesan pledge not be passed along to The Episcopal Church because of theological differences.

Lloyd and Barnes said that the waiver process is based on having a significant reason for the shortfall, combined with a plan to get to 15% in the coming years. “To me, progress toward the 15 is as important as being at 15,” Barnes said.

“We’re not trying to be punitive,” Lloyd said. “The overall goal is to build community, not break it.”

The Executive Council committee that evaluates waiver requests has granted about a dozen waivers, most of them to non-domestic dioceses. The Council will consider additional waivers at its October meeting.

TLC reached out to each of the twelve dioceses to learn more about the factors that have kept them from reaching the 15% pledge.  Their responses are listed below, in alphabetical order.

Alabama, 12.8%. The Rev. Deacon Kelley Hudlow, communications coordinator for the diocese, said three of their parishes exercise an option to withhold their contributions from The Episcopal Church, a practice that started in 2005 “as a pastoral response so that we can walk together in difference.” Other dioceses offer similar options.

The three parishes include the Cathedral Church of the Advent in Birmingham, one of the largest Episcopal churches in the country, with an average Sunday attendance of more than 1,000.

Albany, 8.8%. The Diocese of Albany did not reply to repeated requests for comment.

Central Gulf Coast, 11.9%. The diocese includes the southern third of Alabama and the Florida panhandle. The Rt. Rev. Russell Kendrick said “we did apply for and received a waiver.  We also have a plan to get to the 15% within the triennial.”

Dallas, 6.1%. At its February 2019 meeting, the Executive Council approved several waivers but denied a request from the Diocese of Dallas. Lloyd said at the time that Dallas leaders “said they will move to 15 percent by 2020, but their 15 percent is split between about 12 percent that comes to [the church center] and 3 percent that goes to other ministries of the church of their choosing. The committee felt that the assessment is not a split-able entity.”

The Rt. Rev. George Sumner, Bishop of Dallas, told TLC the committee misunderstood the diocese’s intent. “We do give to other entities, and that’s a good thing – we help Venezuela, we help North Dakota – but we understand that isn’t in lieu of our obligation,” he said. “That was more just a full disclosure thing. But we know we need to get to 15.”

Sumner said the diocese had not been contributing anything when he took office four years ago. As the result of a compromise “between the more liberal and more conservative members of the diocese,” he has been able to increase the contribution each year, and intends to continue to do so.

“Part of the trouble is I can’t say we’re going to do this, we’re going to do that, because I’m not the king,” the bishop said. “We are trying to do better, but to do it in a non-conflictual way.”

Florida, 10.7%. Director of Communications Emily Stimier said by email, “The Diocese of Florida is committed to being good stewards of the gifts we have received from God. We are currently in the planning stages of our 2020 budget and prayerfully considering all of our pledges and commitments for the upcoming year.” The Jacksonville-based diocese includes the northern quarter of the state.

Fond du Lac, 11.9%. This small Wisconsin diocese allows individuals to inform the diocese “not to include their personal pledge in the calculation of the national pledge,” said Matthew Payne, lay canon for administration. If not for that, their pledge would be 13%.

“Regretfully, being a diocese with fixed expenses and a smaller, shrinking budget, we are only able to pledge to the broader church at a level that is a little bit below expectations,” he said.

Colorado. The Diocese of Colorado has not made a pledge for 2019, but pledged 10% the prior year. The Rt. Rev. Kym Lucas was consecrated in May 2019, so has been bishop for just a few weeks. She told TLC by email that some parishes had restricted their giving over LGBTQ issues, but “I have every intention of complying with [the canon requiring a minimum pledge] and our pledged assessment will meet this new target in this new season of ministry in Colorado.”

Pennsylvania, 8.2%. This historic Philadelphia-based diocese is recovering from the deeply troubled episcopacy of a bishop who among other things was banished from the ministry in 2008 for mishandling accusations of sexual misconduct. Charles Bennison was reinstated as bishop two years later after an ecclesiastical appeals court ruled that the statute of limitations had elapsed for his alleged offenses. The House of Bishops promptly and publicly urged him to resign in a strongly worded resolution, but he remained in office until retiring in 2012.

The Rt. Rev. Daniel Gutiérrez said that since he was elected in 2016 he has been working to restore trust, both within the diocese and between the diocese and TEC. He said “we are in many ways a wealthy diocese,” and “I think it’s a shame that we’re not paying the full assessment.”

Even though the diocese’s current participation is little more than half of what is expected, “we’ve made a commitment, beginning in 2020, we will pay our full assessment. I have faith, I have hope.”

Mississippi, 10%. The Rev. Scott Lenoir, editor of the diocesan newsletter, said the diocese is below the participation rate because “we couldn’t make our budget … it’s not any kind of protest.” The diocese has been granted a waiver for the next three years.

Springfield, 3.5%. Springfield, headed by the Rt. Rev. Dan Martins, has the lowest pledge of any diocese. Archdeacon Shawn Denney said “it dates back to 2003, and the difficulties at that time.”

“The council of the diocese changed the name of the national church pledge line to Outreach Fund,” Denney said. They also passed a resolution giving any parish that is meeting its minimum pledge to the diocese the option of specifying that its contribution not be passed along to The Episcopal Church.

For 2019, only 46 percent of the budget line will go to The Episcopal Church. The remainder will be used “for ministry purposes either outside the diocese, or outside ordinary diocesan administrative responsibilities,” he said.

Also around 2003, the small diocese in Illinois began experiencing financial difficulties, and that worked in tandem with the split budget line to ratchet down the diocese’s participation in the broader church. “Many of us,” Denney said, “would like for us to move in the direction of satisfying [the 15% pledge], but it’s taking some time.”

Rio Grande, 6.2%. Since November 2018, the Rt. Rev. Michael Buerkel Hunn has been the 11th bishop of the Diocese of the Rio Grande, which includes New Mexico and the far-west Texas city of El Paso and the surrounding area.  Up until November he had been one of the most senior officers on the presiding bishop’s staff, leaving him predisposed to support The Episcopal Church.

Hunn told TLC that the diocese and many of its parishes are struggling financially. He has begun “reconfiguring diocesan staff to provide congregational development support to help our congregations grow. We intend to increase our Fair Share payments each year but will not be able to fulfill our required 15% this triennium.” Rio Grande’s waiver request will be considered at the October meeting of Executive Council.

West Texas, 12%. The Rt. Rev. David Reed, bishop of the San Antonio-based diocese, said congregations there have been allowed to redirect their contributions away from The Episcopal Church. “Over the years, that has done a lot to keep the diocese together,” he said. Fewer and fewer people object to the Church’s LGBT stance, but “for those for whom it matters, it matters a lot.” He said he is committed to reaching 15%, and his diocese has been granted a waiver.


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