[Episcopal News Service] Uncertainty over dioceses’ level of support for future churchwide budgets is a top focus of budget planners leading up to next year’s 81st General Convention, according to a presentation of income sources during a June 30 online meeting of Executive Council.

The meeting, held on Zoom and livestreamed publicly on YouTube, featured discussions facilitated by members of Executive Council’s Joint Budget Committee, which is tasked with developing the 2025-27 budget proposal and presenting it at General Convention when bishops and deputies gather in June 2024 in Louisville, Kentucky.

“We want to test out our working assumptions on the income with you, so that we’re all clear how those numbers have come into being and that we’re comfortable with them,” the Rev. Patty Downing of the Diocese of Delaware, who chairs the Joint Budget Committee, told Executive Council.

The largest revenue line in the budget is the assessments that The Episcopal Church receives from dioceses, which typically generate more than half of the church’s revenue. For 2023 and 2024, the church maintained its 15% assessment on diocesan revenue while increasing the amount of revenue exempted from that assessment from $140,000 to $200,000.

San Diego Bishop Susan Snook, a member of the Joint Budget Committee, cautioned that at least three dioceses have passed resolutions proposing that General Convention reduce the rate to 13% by 2027 and to 10% by 2030.

“We have no way of knowing whether that ‘C’ resolution will pass the convention,” Snook said, referring to the category of resolutions that are submitted by dioceses. If the assessment rate is reduced, it could leave Executive Council with “some scrambling to do” to close a sudden budget gap, she said.

Executive Council is the church’s primary governing body between meetings of General Convention.

On the positive side, nearly all dioceses have met their commitments at the 15% level, a sign of relative stability after concerns that financial fallout associated with the COVID-19 pandemic and inflation could negatively affect the church’s financial position. The Joint Budget Committee is expecting that diocesan revenue will increase annually at a rate of about 2%. “Commitments have been strong,” Snook said, but increases in plate and pledge income “don’t necessarily keep up with inflation.”

Timothy Gee, another Joint Budget Committee member, from the Diocese of El Camino Real, added that with most dioceses contributing at 15% the church doesn’t need to set aside as much money for the hardship waivers it grants to some dioceses.

The budget also is balanced partly with income from returns on the church’s investments, which have been affected by the stock market’s recent volatility. The Joint Budget Committee anticipates future annual returns of at least 7.5% on those investments, which Downing said was slightly more conservative than the 8% return the church has historically seen. In most years, the church then draws 5% from those investments to support churchwide programs.

Executive Council spent about a half hour discussing those budget details in small groups. Afterward, the groups shared some of their discussions’ highlights. Louisa McKellaston, a Joint Budget Committee member from the Diocese of Chicago, said there were questions in her group about what would happen if General Convention passed conflicting resolutions, one approving a budget with a 15% assessment rate and another reducing the rate.

Given what appears to be a growing churchwide interest in reducing the rate, “there is a clear need for discussion and study on the current 15% rate and the desire to reduce it to 10%,” and how it could reduce support for churchwide ministries, McKellaston said. “If we reduce further than 15%, we can only do so much with the money that we have.”

Gee, in sharing highlights of his group discussion, said some Executive Council members raised concerns about how the wider church is reacting to the news of recent budget “surpluses” during the pandemic, much of it related to money saved because of reduced travel and fewer in-person gatherings early in the pandemic. Some of that money already has been returned to the dioceses, and the church cannot rely on similar surpluses going forward to close budget gaps.

“We need to live within our means now,” he said, and the budget would be tight even with a 15% assessment rate. “We no longer have surpluses.”

Downing reiterated that the June 30 discussion was just focused on the income side of the equation. When factoring in ongoing expenses, her committee currently estimates it will need to make up for a $7 million churchwide budget shortfall for 2025-27.

A graphic included in the proposed 2023-24 churchwide budget, as presented to the 80th General Convention, shows the churches various income sources. The final figures were modified slightly upon approval.

The Episcopal Church typically operates on a three-year budget plan approved by General Convention and managed by Executive Council. In July 2022, because the pandemic had forced a one-year postponement of the 80th General Convention, bishops and deputies approved a $100.5 million budget for two years, 2023-24. The last three-year budget approved by General Convention, for 2019-2021, totaled $134 million.

Budget documents for 2023-24 can be accessed on the Finance Office’s website.

The Joint Budget Committee has offered two churchwide listening sessions so far, one on April 17 and the other on June 20. The listening sessions are not promoted as hearings but as an opportunity for people across the church to offer feedback on current budget priorities and their suggestions on the church’s future financial decisions.

The committee will spend the coming months analyzing the input it receives and will schedule additional listening sessions later this year with church task forces, other interim bodies, church staff and the wider church, with the goal of drafting and presenting a 2025-27 budget plan to Executive Council in October, followed by formal hearings.

The proposed budget plan will be finalized in January 2024, voted on by Executive Council and submitted for consideration by the 81st General Convention in June 2024.

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