The proposed 2019-2021 budget was presented on July 11, 2018, at the 79th General Convention to a joint session of the House of Bishops and House of Deputies. Photo: Mike Patterson/Episcopal News Service

[Episcopal News Service] Five years ago, The Episcopal Church, in balancing its budget, initiated a shift away from a policy of “asking” in favor of “expecting” its dioceses to share in its operating expenses. All churches and dioceses are “one in the body of Christ,” then-Presiding Bishop Katharine Jefferts Schori said in January 2015, and “we must seek to receive and to share.”

Today, sharing is mandatory. Each of the 110 dioceses and regional areas is expected to contribute 15% of its adjusted annual income – its reported income minus a $140,000 deduction – under Episcopal Church canons that were amended in 2015 at the 78th General Convention. Noncompliant dioceses now may be deemed ineligible to receive grants, loans and scholarships from The Episcopal Church.

The canonical change was intended to encourage the church’s dioceses to participate more fully in funding churchwide ministries, from evangelism and church planting to caring for creation and racial reconciliation. By that measure, it has succeeded.

A decade ago, when dioceses were asked to contribute 21%, only 29 dioceses reached that level. After the church lowered the amount to 15% and pressed diocesan leaders to commit to that goal, 88 now pay in full, and Executive Council granted temporary waivers to an additional 17 while they work to increase their contributions.

“That is a huge success story in my mind,” said the Rev. Mally Lloyd, an Executive Council member from the Diocese of Massachusetts who chairs the Assessment Review Committee.

Only five dioceses paid less than 15% without receiving waivers from Executive Council: Albany, Dallas, Florida, Rio Grande and Springfield. Those five are ineligible this year to apply for grants from Episcopal Church programs, such as Becoming Beloved Community, church planting, Constable Fund, Roanridge Trust and United Thank Offering.

Bishops in some of those five dioceses partly explained their underpayments as rooted in longstanding theological disagreements with General Convention on issues of human sexuality, while still affirming their belief in the principle of shared financial responsibility for churchwide ministries.

“Being a diocese in full compliance mode with the whole church is what we’re supposed to do,” Dallas Bishop George Sumner said in a phone interview with Episcopal News Service.

The Diocese of Dallas pledged 6.1% in 2019 based on reported income of $3.6 million, and Sumner said the diocese upped its pledge this year to 9% – still not aggressive enough for Executive Council, which declined to grant the diocese a waiver at its February 2020 meeting in Salt Lake City, Utah.

Diocesan assessments make up The Episcopal Church’s largest income source – more than 60% of the triennial budget. Executive Council, which drafts and recommends the triennial budget to General Convention for approval every three years, is then responsible for managing income and expenses during the triennium. As part of that process, the church’s Finance Office calculates current-year assessments based on dioceses’ income reports from two years earlier, so dioceses have time to plan for the payments.

Episcopal Church Treasurer and Chief Financial Officer Kurt Barnes explains the church’s financial operations to members of the General Convention’s Joint Standing Committee on Program, Budget and Finance in October 2017. Photo: Mary Frances Schjonberg/Episcopal News Service

At each General Convention, “the bishops and deputies vote to support a budget. They work on the budget together,” Kurt Barnes, the church’s treasurer and chief financial officer, said in an interview. “In that budget is an income and an assessment expectation.”

Paid in full, those assessments would total nearly $90 million of the church’s revised $137 million budget for 2019-2021, though church officials estimate about $5 million less in actual collections over three years, based on the number of dioceses that have said they can’t or won’t pledge the full amount.

Ability and willingness to pay can vary from diocese to diocese. The Diocese of the Rio Grande, for example, cut its budget by 10% in 2020 to stabilize its income after losing a key funding source. At the same time, it is encouraging its congregations, which are located in New Mexico and the westernmost edge of Texas, to step up their stewardship efforts, Bishop Michael Hunn told ENS.

Hunn, who was consecrated in November 2018, said he and Episcopalians in his diocese take seriously the financial expectations set by General Convention. In 2019, Rio Grande paid an assessment of 6% based on reported diocesan income of $1.3 million.

“I don’t want to be a bishop of a diocese that’s not paying its fair share,” Hunn said, but “there’s no way we’re going to get to 15% this triennium.”

Talk of changing the ‘asking’ took years to gain traction

How to get all dioceses to pay their fair share – an amount once known as “the asking” – has long been debated by church leaders, as they contended with wide disparities in dioceses’ demographics and financial standings. Alongside Texas, New York and other dioceses with multimillion-dollar incomes are small, rural dioceses like Eau Claire and Western Kansas, sometimes led by part-time bishops, struggling to get by with incomes at or well below $500,000.

Historically, the church asked for 21% but received only 15% as a churchwide average, Barnes said. Some dioceses paid the full amount. Others paid little.

Then in 2003, when the church elected its first openly gay partnered bishop, efforts to increase participation were further complicated. Some of the more theologically conservative dioceses responded by withholding all or part of their financial contributions to The Episcopal Church, a response that Barnes said was not widespread.

One of those dioceses was Springfield, which encompasses the largely rural lower half of Illinois. Nearly two decades later, it continues to contribute one of the smallest assessments of any diocese. Its 2019 pledge rate was just 3.5%, or $23,000 on reported income of just under $800,000.

Springfield Bishop Daniel Martins was not consecrated until 2011, but as bishop of Springfield, he has continued the diocese’s policy of leaving the question of assessments up to congregations – they decide what portion of their assessments to the diocese will be relayed to The Episcopal Church. Some congregations are fine sending money, while others want none of their assessments released beyond the diocese, Martins said in an email.

“This is a complicated and arcane system, but it manages to keep the peace in the diocese and allow us to focus on our mission,” said Martins, who plans to retire in 2021, adding that he would prefer the diocese move toward full payment.

The Episcopal Church began laying the foundation for its current effort to move all dioceses toward full payment at the 76th General Convention in 2009, when bishops and deputies approved a financial restructuring plan that lowered “the asking” from dioceses to 20% in 2011 and 19% in 2012.

Church financial records show only 29 dioceses were reported in 2009 to have pledged at or above the 21% asking. When General Convention met again in 2012, the roll of full participants had grown to 47 – still fewer than half of all dioceses.

The House of Bishops voted in 2012 to lower the rate even further, to 15% within three years, and to require underpaying dioceses to ask Executive Council for a waiver “accompanied by an action plan appropriate to the circumstances of the diocese.” But because of a procedural mix-up at General Convention, the House of Deputies never acted on it.

In addition to adopting a budget that maintained assessments at 19% without making them mandatory, both houses approved another resolution that established a task force to consider ways of streamlining and improving The Episcopal Church’s structure, governance and administration.

When the Task Force for Reimagining The Episcopal Church, sometimes called TREC, issued its report in December 2014, one of its recommendations was to lower diocesan assessments and require dioceses to pay.

“A diocese that neglects or fails to pay its assessment according to the budget adopted by General Convention shall be subject to such reduction of any church program funds designated for the diocese as the Executive Council may approve, taking into account the diocese’s particular circumstances,” the task force said.

General Convention makes assessments mandatory

Executive Council, meanwhile, had been collecting input from dioceses about potential changes to the assessments, as it drafted the proposed 2016-2018 budget. Its 2013 survey of 221 bishops and deputies found that more than 60% of respondents thought restrictions should be placed on dioceses that don’t contribute at the requested level. And most said financially struggling dioceses should be able to make their cases for leniency.

Executive Council endorsed a new process based on those tenets at its January 2015 meeting. The church “should employ its resources for the welfare of the whole body of Christ,” Jefferts Schori told Executive Council then, in one of her final presentations to that body as presiding bishop. “The dioceses that make up this part of the body of Christ should expect this challenge to participate in the life of the body of Christ joyfully, in ways that demonstrate love of neighbor equal to love of self.”

Also in 2015, Executive Council created an Assessment Review Committee to follow up with noncompliant dioceses – “to encourage and work with such dioceses to create a plan for reaching the full assessment amount.”

Central New York deputy Chuck Stewart, right, studies the budget with fellow deputy the Rev. Georgina Hegney, at the 78th General Convention in 2015. Photo: Tracy Sukraw/Episcopal News Service

That summer, the 78th General Convention adopted Executive Council’s plan, passing one resolution to gradually reduce the annual amount to 15% and another resolution warning that the assessments would become mandatory in 2019.

That process has had a number of success stories, such as the Diocese of Pennsylvania. As recently as a year ago, meeting minutes show the Assessment Review Committee was uncertain whether the diocese would pay in full, but good news followed in August 2019.

“Hooray for Pennsylvania!!” the minutes of the committee’s meeting say. “After additional conversation they have agreed to commit at 15%.”

Other dioceses applied for and received financial hardship waivers based on their plans to move to the full amount or nearer that level during this triennium. In October 2018, for example, Executive Council accepted the Diocese of West Texas’ plan to pay 14% by 2021. Similar plans were approved for the Diocese of the Central Gulf Coast in February 2019 and for the dioceses of Colorado and Fond du Lac in October 2019.

Other dioceses were granted waivers for agreeing to pay nominal amounts due to widespread poverty in their dioceses, particularly the Latin American dioceses of Province IX, each of which also receives money from The Episcopal Church to support their self-sustainability efforts.

When Executive Council met this month in Salt Lake City, the Diocese of Alabama received the final waiver for 2019. Although it contributed only 12.8% last year, it pledged to increase that rate to 15% in 2020.

“The waiver process has caused us to be more relational and to sit together to talk about money and mission. This is the best thing to happen in our financial life in many years,” General Convention’s Joint Standing Committee on Program, Budget and Finance said in its introduction to the adopted 2019-2021 budget.

Five dioceses now ineligible for churchwide grants

Of the remaining noncompliant dioceses, Springfield arguably is the least responsive to Executive Council’s appeals. It didn’t increase its payment, and it didn’t request a waiver.

The Diocese of Albany requested a waiver but was denied, despite arguing that its parishes are struggling. Based in New York’s capital city, the diocese includes more than 100 congregations, most in less-populated communities from the Canadian border to the northern Catskill Mountains.

Albany pledged 8.8% in 2019 based on reported income of about $1.4 million. “The bottom line is we can’t give what we don’t have,” Albany Bishop William Love said in an email to ENS. Another reason the Albany diocese doesn’t pay its full assessment is that, like Springfield, it allows parishes to decide how much of their money goes to The Episcopal Church.

Whatever arrangement a diocese has with its parishes, it must find a way to contribute the full 15%, said Lloyd, the Assessment Review Committee chair, or else submit a plan for getting to that level. Albany offered no plan for increasing its contribution, she said in a phone interview.

The Jacksonville-based Diocese of Florida, like Springfield, never applied for a waiver, Lloyd said, after pledging to pay only 10.7% in 2019. Some diocesan officials had suggested to the committee that they were interested in moving toward a 15% contribution, but Florida’s Diocesan Convention rejected that idea when it met in January 2020. The diocese, with a little more than $2 million in reported annual income, is among the church’s more conservative dioceses under the leadership of Bishop John Howard.

“The place we begin, and always have, is with the admonition of Paul in 2 Corinthians: ‘Each one must give as he has decided in his own heart, not reluctantly or under compulsion, for God loves a cheerful giver,’” Kristyna Munoz, Florida’s communications director, said in an email to ENS.

Dallas Bishop George Sumner delivers remarks at the House of Bishops meeting in September 2019 in Minneapolis, Minnesota. Photo: David Paulsen/Episcopal News Service

Dallas, which also has been historically a more conservative diocese, is happily moving toward paying its full share of the churchwide budget, Sumner said. His diocese has been increasing its payments annually, he said, with “a full and clear intention to go to full compliance” before he retires in a few years.

The diocese’s reported income, approaching $4 million, has ranked it among the top 15 Episcopal dioceses in recent years. Executive Council concluded Dallas had not submitted a clear plan for getting to the 15% assessment that would justify a waiver, Lloyd said.

As for Rio Grande, it’s no longer a “won’t pay” diocese, but rather a “can’t pay” diocese, according to Hunn, who saw the other side of this process in his previous role as canon to Presiding Bishop Michael Curry for ministry within The Episcopal Church.

Rio Grande had been among the dioceses that were on the brink of leaving The Episcopal Church in 2003, but Rio Grande’s Episcopalians now want to be full participants in The Episcopal Church. “It’s our church. We’re a part of it, and that really matters,” Hunn said.

Shortly after Hunn took over as bishop just over a year ago, the Assessment Review Committee rejected a previous plan that tried to reach 15% too quickly. Hunn submitted a follow-up plan last year to hit the target by 2032, but the committee deemed that timeline far too long.

“We have a sense that it’s very, very difficult going for him and for the diocese right now,” Lloyd said, but the committee ultimately chose not to recommend a waiver for Rio Grande because the committee felt it was “not asking too much” of Rio Grande to submit a new plan for getting closer to 15% sooner. Other struggling dioceses have been able to viably clear that minimal threshold, Lloyd said.

Hunn said he is disappointed his diocese is now ineligible for churchwide grant programs, which have benefited Rio Grande in the past. After the diocese’s recent budget cut, he said he needs more time to develop a realistic timeline, but Rio Grande will pay its full assessment.

“We are coming home, and we’re happy about it,” Hunn said. “But we’ve got a long way to go.”

– David Paulsen is an editor and reporter for Episcopal News Service. He can be reached at dpaulsen@episcopalchurch.org.