Proposed adjustments to 2021 and 2022 budgets will be taken up Monday, and finalized next month at GA
by Mike Ferguson | Presbyterian News Service
LOUISVILLE — Just as congregational and mid council giving and budgets are being hit hard by the COVID-19 pandemic, so will the current and upcoming income streams of the Presbyterian Mission Agency, Office of the General Assembly and the Administrative Services Group.
During a videoconference Friday, about 270 of the national staff serving in all three agencies learned how deep projected drops for revenue during 2021 and 2022 could be — 25 percent in 2020 and 2021 and 20 percent in 2022 for the Mission budget, and about 35 percent total for the Per Capita budget in 2020 and 2021, including uncollectible per capita. The ASG budget will be affected by cuts to the Mission and Per Capita budgets, since the PMA and OGA are ASG’s largest clients.
The proposed downward adjustment for the Mission budget is $9.2 million in 2021 and $7.5 million in 2022. Income from per capita will decrease by 35% due to the per capita rate being left at $8.95 and a higher rate of uncollectible per capita. That means a downward projected budget adjustment of $4.2 million in 2021 and $4 million in 2022 in the Per Capita budget.
The current proposed unified budget for all three agencies calls for about $90.5 million in 2021 and around $92.5 million in 2022. The recommended reductions would take proposed spending totals down to $81.3 million in 2021 and $85 million in 2022.
“We recognize that these hard realities are being felt across the PC(USA) from the national offices to presbyteries and congregations,” said the Rev. Dr. J. Herbert Nelson, II, Stated Clerk of the General Assembly of the PC(USA). “But we serve a great God who will see us through this valley and lead us to be the church of the 21st century.”
The PMA and A Corp boards, along with the Committee on the Office of the General Assembly, will meet together via videoconference at 2 p.m. Eastern Time Monday to discuss the revised income projections. In addition, the three bodies will vote on a per capita apportionment rate for 2021-22 and on a request that the 224th General Assembly delegate responsibility for further budget adjustments to COGA, the PMA Board and the A Corp Board.
There was some good news to report Friday: for 2020, the COVID-19 Financial Implications Team, which has been working to collect data and provide alternatives on the proposed unified budget ahead of next month’s virtual General Assembly, anticipates enough savings to offset the decline in income. Savings will occur because of less travel, fewer face-to-face meetings, general underspending, unfilled vacancies, and by not funding an in-person General Assembly. In addition, an $8.8 million forgivable loan from the Paycheck Protection Program covered two months of salaries for national staff. That said, other adjustments during the current year may be necessary, according to the team’s report.
With the expected declining revenues, OGA, PMA and ASG will all have to adjust their expense budgets in 2021 and 2022. Managers will determine those reductions following next month’s GA.
“Right now we are looking at income,” said Kathy Lueckert, president of the Presbyterian Church (U.S.A.), A Corporation. “We must wait until the General Assembly meets to talk about reducing expenses.”
Lueckert said that GA commissioners must first “vote on granting our boards and committee the authority to make budget adjustments. Then we need to see if there are any financial implications from GA actions. This will allow us more time and data to inform our projections.”
Dipping into reserves “may look like an easy quick fix, but the focus must be on the long term,” the report states. The recommendation is to “preserve reserves as long as possible, and in accordance with existing policies.”
The team also recommends creating a cross-agency team “focused on encouraging giving to all levels of the church.” Like the COVID-19 Financial Implications Team, that team will bring “the best knowledge to bear on the challenge at hand.”
“Now and for the foreseeable future the focus needs to be on helping mid councils and congregations come through the COVID-19 crisis in the best way possible,” the report states. “At the national level, energy and efforts should be directed downstream, with more attention paid to congregational vitality, stewardship and communications.”
The Rev. Dr. Diane Moffett, president and executive director of the Presbyterian Mission Agency, said, “Even during these challenging times, the Church is rising. We are being the people of God — a Matthew 25 people. Our work is directly tied to how well the churches are faring in terms of their ministry and mission, so we pray without ceasing for them.”
Survey data from mid councils and congregations
The report includes results of an April survey of mid councils conducted by Research Services. Of the PC(USA)’s 170 presbyteries, 106 (62%) responded.
Eighty-five percent of presbytery leaders — chiefly stated clerks and executive presbyters — said it’s too soon to know the financial impact of church closings in their presbytery. Twenty-four percent reported significant decreases in congregational giving, and 27% noted a modest decrease. Sixty percent of presbyteries applied for a Paycheck Protection Plan loan, and 54% applied for a Presbyterian Disaster Assistance grant.
Of the 66 presbyteries to report a significant or modest decline in congregational giving, 20 have taken action, including receiving a PPP loan, drawing on their reserves and reducing non-personnel administrative expenses.
Among congregations, 88 percent of the responding presbyteries reported that one or more churches in their presbytery had applied for or received a PPP loan. Nearly four in 10 presbyteries said congregations have been sharing a pastor since the onset of the pandemic. Thirteen percent of presbyteries responding said half or more of their congregations were reducing shared mission giving to the national church.
In five percent of presbyteries, 90-100 percent of congregations had reduced non-personnel costs, reduced mission expenses, trimmed personnel costs through furloughs and layoffs, reduced shared mission giving to the national church or withdrawn reserve funds. Some employed multiple strategies.
Friday’s videoconference included these items under “what we learned”:
- April income from three sources — individuals, congregations and presbyteries — is down 62 percent from April 2019 giving.
- Short-term investments were tapped by $3 million in March to meet cash flow requirements. Short-term investment assets have decreased in value.
- Current market volatility will impact the unified budget in 2022.
- The information on hand is “imperfect and incomplete.”
A “What’s next?” slide concluded Friday’s presentation. In addition to a mention of upcoming meetings and deadlines, two suggestions rated specific mention: “Give us your feedback” and “Pray!”
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Categories: Office of the General Assembly, Presbyterian Mission Agency
Tags: a corp board, a corporation, administrative services group, committee on the office of the general assembly, coronavirus, covid-19, kathy lueckert, office of the general assembly, paycheck protection program, presbyterian mission agency, presbyterian mission agency board, research services, rev. dr. diane moffett, rev. dr. j. herbert nelson ii, revenue declines, unified budget