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Episcopal Dioceses & Parishes Face Worst Financial Crisis since Depression - V

Episcopal Dioceses & Parishes Face Worst Financial Crisis Since Great Depression - Part V

News Analysis

By David W. Virtue

[This story updates a number of dioceses and parishes that we first reported on three months ago. In most dioceses, the situation has only worsened.]

Episcopal Dioceses and parishes continue to spill red ink as they scramble to make sense of declining budgets, diminished Trust Funds, aging congregations and personal incomes ravaged by an economy in free fall.

The DIOCESE OF WASHINGTON took a hit and drastically revised its 2009 budget, largely because of paltry giving from the bulk of its congregations plus a drop in its investment income.

In an approximately $3.9 million budget approved in May by its diocesan council, the diocese made a series of staff and budget cuts to make up for a shortfall of more than $400,000 from initial revenue projections. The income projections included $357,800 less in pledges than the diocese anticipated from its 93 churches, plus an estimated $26,400 the diocese could lose in investment and interest income, The Washington Times reported.

The 40,000-member Washington Diocese will undergo "an aggressive and rapid reduction in staff, across all levels," according to Paul Cooney, canon to the ordinary for the diocese. Three staff members were let go in February.

The diocese also chopped off a $126,000 gift to denominational headquarters in New York by eliminating an annual contribution from the $21 million Ruth Gregory Soper Trust fund; overall, it plans to give $649,230 to the national church.

Part of the problem is that less than a quarter of the diocese's 93 congregations tithe - or give 10 percent of their money to the diocese - according to diocesan spokesman Jim Naughton. The diocese does not mandate a set amount churches must give.

The remaining congregations appear to be strapped for money. Two or three clusters of churches may combine. Although some of the diocese's fastest-growing congregations are Hispanic, the Spanish-speaking congregations tend to not tithe.

The diocese is heir to numerous churches in several eastern Maryland counties that are small, expensive historic chapels that must stay open because of their designation or because they are attached to cemeteries that are historic. The resources to keep each of these chapels open and staffed would otherwise go to a larger church, Naughton told the Times.

From the DIOCESE OF WESTERN MASSACHUSETTS comes word from Bishop Gordon Paul Scruton, "Congregations are more vulnerable. The courageous decision of St John's, Worcester to close and disperse, planting seeds of sharing with other congregations in the area, reminds us that congregations, like all of us, can come to the end of their fruitful ministry. Several of our congregations are living at the edge of survival. Others with endowments have been hit especially hard by the decline in the stock market. Due to new government regulations, changing expectations and deteriorating facilities, we have experienced the heartbreaking suspension of ministry at Bement. What buildings and ministries can we sustain? "The diocesan endowment income that supports half of our diocesan budget has also diminished. As a result of all these factors, we will need to cut $200,000 out of the balanced Diocesan budget approved by our Convention last October. As the Diocesan Council prayerfully makes these budget cuts, they will ask what priorities best help us develop healthy mission focused Christians and congregations. (Council will communicate more details about budget cuts and their implications for us all.)" The bishops said that some parish buildings have become a liability. "Many are prohibitively expensive to maintain, insure and heat as cost of fuel increases. Now, more than half of our congregations (34 of 67) are unable to financially support their building and a full time priest. We cannot realistically expect that many clergy will move to this diocese and work for a part time salary. Like all other denominations in New England, we will need to do our ministry with fewer buildings and fewer clergy."

The financial crisis has hit the DIOCESE OF MAINE hard. The $2.1 million diocesan budget contains more than $250,000 to assist 24 congregations - fully one-third of their 66 year-round congregations. Aid to congregations for 2009 ranges from $3,000 to $24,000, depending on the need demonstrated to the Grants Review Committee. However, the reserve fund is set at zero for 2009 (the diocesan Finance Committee could have never foreseen the looming economic downturn). Since then an additional eight congregations have applied for grants and have taken advantage of an offer for financial assistance from Bishop Stephen Lane. "We're seeing congregations that have never struggled to meet their budget before suddenly finding their endowment income greatly reduced and that their members' retirement income has been compromised. Congregations that have often been on the edge in economically -challenged parts of the state are affected because their members are losing jobs and struggling to make ends meet at home," explained Lane. The committee with the aid of diocesan- funded consultants will fine- tune a three-year plan to help congregations strategically assess where they are.

From the DIOCESE OF WESTERN MICHIGAN, Bishop Robert R. Gepert reports, "Over the years that I have been here diocesan staffing has taken a hit. We have eliminated a communications and technology position, we have reduced the diocesan secretary position to half time, we reduced the Canon to the Ordinary's salary in an administrative restructuring, and staff was not given a cost of living adjustment in 2005 and 2006, for half of the year in 2007, and for this year the COLA will begin for staff in August. The total amount saved because of the staffing cuts is $131,407.89. Again, this year, the Finance Committee of the Diocese, recommended to the Executive Council cuts in program and support."

Gepert noted that parish pledges are down from $752,000 in 2008 to $679, 000 in 2009.

From the DIOCESE OF WESTERN NORTH CAROLINA Bishop G. Porter Taylor bemoaned the situation in his diocese, "We understand that parishes have had an extraordinarily difficult time this year and have had to make tough decisions at the parish level. The same has been true at the Diocesan level. Our pledge income decreased 7.1 percent from that budgeted for 2008. Eighteen congregations decreased their pledge from the 2008 level, 16 congregations remained at the same level, and amazingly, 28 congregations were able to increase their pledge. We thank every congregation for their pledge to our common ministry. The 7.1 percent decrease in pledge income combined with the need to decrease our draw on the Trust Fund by another percent meant that we had to reduce our budget after Convention by approximately $208,000. This made for some painful choices."

The diocese reduced giving to the National Church by 3% saving $41, 500. Other cuts include no cost of living adjustments for staff, more communication cuts, delaying starting date of new staff, and cutting convention and retreat costs.

The DIOCESE OF NEW YORK reduced its 2009 budget by more than $1 million or 7.4 per cent. There were huge budget cuts. 12 parishes were notified that their congregational support plan contracts would not be renewed in 2010. [There are 60 parishes currently receiving funds from the CSP.] Bishop Mark S. Sisk observed that the current financial situation means that the 2010 budget process will be delayed by two months.

A report by the diocesan treasurer reveals that the first quarter (2009) assessments are running behind previous years and it would be impossible for the diocese to not operate at a deficit. What does 2010 look like? Further reductions are anticipated. The Congregational Support Plan has already reduced its 2010 budget by $600,000. "We are trying to make all cuts as thoughtfully as possible; being deliberate, compassionate and giving programs affected time to adjust," said a diocesan spokesman.

Bishop Stacy Sauls of the DIOCESE OF LEXINGTON took the gloves off and told his diocese in no uncertain terms that there is not enough money to sustain full time priests and that the lack of funds "would choke the life out of 63% of our congregations, which serve 27% of our people."

"The median clergy compensation in The Episcopal Church nationally is $64,500. With pension and standard insurance benefits, the total cost to a congregation for a median-level priest is between $82,000 and $94,000. That means that a median-level priest is beyond the reach of 22 of our 35 congregations, those with annual incomes less than $150,000 per year. That means that the existing free-market system of clergy placement, unless we think differently and do something differently, will likely, in time, choke the life out of 63% of our congregations."

Sauls said that 11 of 22 congregations are "at risk" with annual incomes between $50,000 and $150,000. "These churches have the resources to support some sort of stipendiary clergy but nowhere near what is necessary to compete for clergy in the free-market system. Here is another startling reality. Of those 11, six are currently seeking priests-six. "

In the DIOCESE OF PENNSYLVANIA, the message from Diocesan Council on May 21 showed irrefutable evidence that, after two years without Charles Bennison at the helm that things have not improved. "With actual pledges in hand, dramatically lower than what was budgeted at Convention, our ability to carry out the mission and ministry of the Diocese is in serious jeopardy." VOL was told that there is no visible overall plan and the Diocese is still stumbling from pillar to post. "The frustration level since then is '"more of the same'" and has built to the point that many are exiting the diocese."

In the DIOCESE OF CENTRAL NEW YORK, The Rt. Rev. Gladstone B. Adams III told his diocese that while many have experienced the sudden decline of personal assets, the Diocese has not been immune to these same setbacks. "Clergy and vestries throughout the Diocese are cutting costs where there is no place to cut, all the while trying to balance budgets and keep their important missions and ministries active. The Board, too, has made drastic cuts to the Diocesan budget, including a freeze on all hiring. The Finance and Investment Committee had to make the difficult recommendation to the Board to lower the return on investments in the Central Investment Fund 2. The Diocese is also adversely affected as some parishes are finding they cannot fulfill their pledge and assessment promises."

In the DIOCESE OF SOUTHERN VIRGINIA, Bishop Herman "Holly" Hollerith IV said an amended 2009 budget reflected an adjustment for the $335,000 shortfall from the anticipated budget presented during the 2009 Annual Council. "The significant decrease in pledges from congregations to the diocese made it necessary to adjust the programs and services provided, reorganize and reduce staff and decrease support of the national church, Chanco on the James, communications and other programs." He said that only the financial support from the diocesan budget for youth ministry services was not considered for adjustment. He did say that among the programs to suffer from the decrease in financial support is Chanco on the James, the diocese's camp and conference center located in Surry, Virginia. Other cuts were in communications...no longer mailing copies to those who prefer electronic communication. He said that financial support of the national church will also be decreased.

It is not only in dioceses but also in cathedrals and local churches where the money pinch is being felt.

Trinity Church, San Francisco will close its main sanctuary. The official line is that the building is not earthquake proof. The 350-capacity main sanctuary is going to be mothballed, likely by the end of September. "Services are moving to the smaller chapel on the property, a separate building that holds about 75 people," said interim rector Otis Charles a former TEC bishop now on his fifth marriage to a man. Upon his retirement in 1993, Charles publicly announced his homosexuality, becoming the first openly gay bishop of any Christian denomination. Several knowledgeable bloggers weighed in on this closure. They reported, "It is clear that the high concentration of Episcopal Churches on the north end of the city is no longer sustainable, and at least one of the parishes should close. It's a pity that Trinity is the one that will close."

And this: "This isn't about seismic upgrades. This is about an Episcopal diocese in San Francisco that doesn't want to maintain a costly large building with a dwindling congregation. THAT is the story here, not money for studies or repairs. The Episcopal diocese has plenty of money for both, but with St. Luke's around the corner, it should be obvious that closing Trinity is the real agenda.

"Trinity Church is another one of those DEAD, has-been congregations. Several previous rectors drove everyone away - the church has no viability anymore and should be sold. No more time to play games with history, tradition, etc."

An attendance chart reveals that attendance peaked at 155 in 1999, down to 60 in 2004, climbed back to 82 in 2006, and dropped back to 70 in 2007.

One outraged blogger stated, "Gene Robinson stated that 'countless' people would replace those that flee the Episcopal denomination. But here we have the gay-friendliest church in the heart of San Francisco with Tiffany stained glass windows and a Skinner organ and all it can muster is a pitiful 70 parishioners a week? Make the church '"inclusive'" and it seems no one wants to come. The diocese can't fork over $300 thousand for a priceless treasure? Pathetic. Theological bankruptcy quickly leads to financial bankruptcy."

Said another blogger, "The current Episcopalian leaders are taking the denomination down a certain path and state that 'All is Well'. Ms (Jefferts) Schori and (Bishop) Marc Andrus talk about the 'vibrancy' of the church, etc. Yet, here we have a treasure of incredible value being boarded up. The diocese can't even afford a few hundred thousand for restoration? Such a magnificent church can only attract 70 on a given weekend? Boarding it up is criminal."

St. Philips cathedral in the DIOCESE OF ATLANTA faces hard times. Its pro gay dean, Samuel G. Candler noted that many of his important givers have had to cut back their pledges. "Perhaps their own incomes are down; perhaps they are just cautious. But one gift, which has been $150,000 in past years, was just reduced to $50,000. For sure, that is a lot of money; but it is also a $100,000 shortfall in our budget. Some $20,000 pledges were reduced to $5,000. Some $1,000 pledges were reduced to $500. "So, right now, in May of 2009, we still need $300,000 in pledges or forecasted gifts to balance the 2009 year. We need $3.6 million in pledges, and we have received $3.3 million. This church is in a critical time. There is no way we can reduce more without also drastically losing some of our mission and ministry."

At St. Mark's Cathedral in Seattle staff was reduced to balance the budget. Despite a balanced budget at the beginning of 2009 by April it became apparent the cathedral would suffer a $200,000 - $400,000 shortfall. Plate donations and other solicited and unsolicited gifts did not come as planned. Additionally, the Finance Committee requested that the church not spend its usual 5% of investments due to the decline in the market and portfolio. As a result the Vestry requested that expenses be reduced for the remainder of the year by at least $250,000. Steps were taken to reduce personnel costs by nearly $225,000 resulting in a net savings of over $200,000. The Vestry and Canon Missioner agreed that all staff, including the Canon Missioner, would sacrifice financially to meet the $200,000 target. Some staff worked part time. The position of Office Manager was eliminated and a severance was offered to those whose positions were eliminated.

St. Paul's Episcopal Church in the DIOCESE OF NORTH CAROLINA and its bishop, The Rt. Rev. Michael B. Curry reflect grass roots concerns when money dries up. St. Paul's expenses are exceeding their monthly income. In order to meet financial obligations, there is a need to supplement income with existing funds from the checking account. However, utilizing the funds in the checking account is not a long-term solution. Bishop Curry offered several budgetary suggestions, but realizes that they too were band-aid solutions to a larger problem. The outcome of the meeting is that St. Paul's does not have the financial resources to continue to operate as a mission with a half time Vicar. The parish will go to quarter time.

St. Luke's Church in Auburn, California reflects a similar reality. The Treasurer said the Vestry and the Finance Committee struggled to put together an operating budget that was only achieved by eliminating paid secretarial office help, cost of living increases and a number of desired services. The Rev. Susan Plucker agreed to reduce her compensation by 10 %. An $184,000 operating budget was accepted until the end of 2009. Beyond this year, St. Luke's may have difficulty remaining a healthy church effectively carrying out its Christian mission.

The Episcopal Church of St. John in the Wilderness in White Bear Lake, Minnesota, is more typical of parishes across the country. A Vestry Financial Subcommittee is determining whether reductions must be made for the rest of 2009. Why? Pledges are down and Capital Funds will soon be depleted. Some pledgers are behind due to financial struggles. The church is prayerfully looking at all alternatives to reductions in Staff and programs.

The Rev. Anne Bonnyman, rector of Trinity Church, Boston, Mass announced at their all-parish Annual Meeting recently that the church endowment had suffered, some pledges had declined, and six professional staff positions, primarily at the senior level were eliminated. "There will likely be more budget cuts in the future and all of us will be asked to increase our giving to support the Church," she said.

As Washington Bishop John Chane observed, The Washington Diocese's cuts mirror the majority of other Episcopal dioceses around the country, 68 percent of which are reporting serious financial difficulties, according to a "State of the Church" report released by the denomination in March.

Death is catching up on the aging denomination. The Episcopal Church is experiencing 19,000 more deaths than births per year, which roughly equals the loss of a diocese annually with Average Sunday Attendance (ASA) now hovering at about 700,000.

To date, four dioceses have seceded from the denomination because of the 2003 consecration of homogenital New Hampshire Bishop V. Gene Robinson. Membership losses have escalated dramatically since the consecration of Robinson with many believing that the numbers will escalate even more following GC2009 when it is expected that rites for same sex blessings will pass and the church will formally reject Resolution B033 which calls for a cessation of further pansexualists to the priesthood and episcopacy.


Episcopal Dioceses & Parishes Face Worst Financial Crisis since Depression :: An On-going Series from VirtueOnline.org

Part 5 - http://www.virtueonline.org/portal/modules/news/article.php?storyid=10612

Part 4 - http://www.virtueonline.org/portal/modules/news/article.php?storyid=10242

Part 3 - http://www.virtueonline.org/portal/modules/news/article.php?storyid=9983

Part 2 - http://www.virtueonline.org/portal/modules/news/article.php?storyid=9804

Part 1 - http://www.virtueonline.org/portal/modules/news/article.php?storyid=9638

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