By Kirk Petersen
The Episcopal Church has the kind of problem you like to have: a huge budget surplus.
At its four-day meeting in Linthicum Heights, Maryland, the Executive Council learned that the church expects to end the year, and thus the 2019-2021 triennium, with a surplus of just under $16 million.
The problem is the optics. More than 80 percent of the church’s revenue comes from the 109 dioceses, which are expected to send 15 percent of their income to the Church Center, or apply for a waiver. Some of the dioceses have been struggling financially for years, although Treasurer N. Kurt Barnes told the council that assessment payments from the dioceses are “in line with commitments” for 2021. The council recognized this reality in April, when it voted to make grants of $40,000 to each diocese that applies.
“It wasn’t a surplus because we were flush,” said Presiding Bishop Michael B. Curry. “We tightened our belts dramatically.” Virtually all travel was halted at the beginning of the pandemic, and the council was gathering in person for the first time since the beginning of the pandemic. When the General Convention was deferred for a year, so was most of the associated expense. After moving $2.5 million in net costs for the July 2022 General Convention, the surplus drops to $13.5 million.
In 2017, the Executive Council voted that when there is any surplus at the end of a triennium, 20 percent of it should be applied to short-term reserves, and 80 percent invested in the church’s various trust funds — essentially, building the endowment. The Rev. Mally Lloyd, chair of the finance committee, told the council that the 20 percent, about $2.7 million, was applied to the short-term reserves. But because the reserves already were funded at a prudent level of three months operating expenses, $2.3 million was transferred from reserves to balance the 2022 budget.
That leaves $10.8 million to be invested under the 80-20 rule — but the discussion revealed there is little appetite for burying all that money in a trust fund. It was noted that the 2017 council had not anticipated a pandemic, and that a rule made by Executive Council can be changed by Executive Council.
“This is an opportunity to do something with what we have, because we tightened our belts dramatically,” Curry said. He and others said the money could be used, for example, for the church’s core priorities of evangelism, racial reconciliation, and care of creation; or for a truth and reconciliation fund related to the church’s role in Indigenous boarding schools, as was discussed in a previous plenary session; or for rebates to churches or dioceses.
Russ Randle, a lawyer and frequent voice of prudence on the council, urged his colleagues to “spend at least 75 percent of the so-called surplus, don’t reinvest it. This is the time to put the chips on the table. We’ve come through some pretty horrific events as a country and as a world. Let’s act like we’re in an urgent situation and put the money where we say it belongs.”
The council passed the one-year budget for 2022 without resolving how to deal with the investment part of the surplus. That will be considered along with the 2023-2024 budget at the council’s January meeting in Cleveland. President of the House of Deputies Gay Clark Jennings, who lives in a Cleveland suburb, closed the meeting by warning the council to dress warmly for January in Cleveland.
