Amid church losses, proposed budget slashed

Key Points                           

• The United Methodist Church’s financial leaders met to finalize the proposed denomination-wide budget heading to General Conference delegates.
• Their latest cuts take into account how U.S. church disaffiliations have reduced the denomination’s financial base.
• Even with these stresses, both the Connectional Table and General Council on Finance and Administration board were able to agree on how to increase support for the bishops while shrinking the overall budget.
• Still, these leaders recognize that the slashed budget means losses to ministry, and that affects people’s lives around the world.

After four years of U.S. churches heading for the exits, United Methodists are rethinking ministry expenses at all levels of the denomination.

That includes the general church — with the denomination’s financial leaders meeting Feb. 19-20 to shrink further what was already going to be the smallest proposed denominational budget in decades.

At the same time, the financial leaders agreed on a plan to shore up the faltering fund that supports the work of United Methodist bishops as the episcopal leaders gradually reduce their numbers.

Retired Bishop Michael McKee, board president of the General Council on Finance and Administration, acknowledged that each cut in ministry funds affects lives around the world — not just those of United Methodist employees but also the people they serve.

“I don’t take any great joy in this,” he said. “I don’t think anybody does.”

But, he added, “I take great, great joy in some of the things that are emerging in churches and new church starts all across the country. We don’t know what they will look like. The best thing we can do is to do the work that we’re doing and pray for them daily.”

McKee was addressing a gathering in the Nashville suburb of Franklin that brought together the General Council on Finance and Administration board and the Connectional Table, another leadership body, to finalize the budget proposal heading to General Conference.

The two groups agreed to form a Missional Needs Funding Task Force to study how United Methodists might financially meet the denomination’s connectional mission in years to come. The groups said they also would welcome folding that work into any other study group that General Conference establishes on the denomination’s future.  

What is coming to General Conference

For now, the GCFA board is proposing a 2025-2028 denominational budget of about $346.7 million to the denomination’s top policymaking assembly, scheduled to meet April 23-May 3 in Charlotte, North Carolina.

That’s about $23.8 million less than the budget proposal the finance agency board approved in May last year.

The new bottom line also marks a nearly 43% overall reduction from the $604 million denomination-wide budget that General Conference approved at its last regular meeting in 2016 — and represents the biggest budget drop in the denomination’s history.  

The proposal requires significant cuts to all funds that support denomination-wide ministries — including United Methodist bishops and especially general agencies.

It will be the smallest budget to come before General Conference since 1984 when delegates adopted a four-year budget of about $319.1 million. Back then, The United Methodist Church had far fewer members on the African continent and had yet to establish the pan-African Africa University — now supported with denominational funds.

“Although we are navigating challenging financial times, the GCFA board, along with members of the Connectional Table and the Council of Bishops, are focused on the work before us: ministry and mission,” the Rev. Moses Kumar, the finance agency’s top executive, said in a statement after the meeting.

Chart shows the official General Council on Finance and Administration figures on church closures, including disaffiliations, since 2019. Image courtesy of the General Council on Finance and Administration.

Disaffiliations and apportionments

The most recent cuts to the proposed denominational budget respond to higher-than-projected church disaffiliations in the U.S.

Over the past four years, nearly 7,700 U.S. congregations — a quarter of the denomination’s U.S. churches — have withdrawn under a denominational policy that expired at the end of 2023. Those losses come on top of another roughly 2,000 U.S. church closures that resulted mainly from dwindling membership.

The disaffiliations have come after years of intensifying fights over the status of LGBTQ people in the church, with many of the exiting congregations being the ones that wanted strict enforcement of the denomination’s bans on same-sex weddings and “self-avowed practicing” gay clergy.

Only General Conference can alter those bans, just as only General Conference can pass the budget that supports denomination-wide ministries.

What the policymaking assembly decides on these and other matters will shape local-church ministry and finances for years to come.

Funding for The United Methodist Church’s budget largely comes from apportionments paid by U.S. annual conferences. The regional bodies in turn ask for apportionments — shares of giving — from local churches. 

The General Council on Finance and Administration then distributes apportionments among seven general-church funds, based on the allocations that General Conference approves.

Each fund supports a different category of ministry: bishops, ministerial education, general administration, the Black College Fund, Africa University, ecumenical work and the World Service Fund that supports the work of most general agencies. For the record, the World Service Fund supports the work of United Methodist News.

Central conferences — church regions in Africa, Europe and the Philippines — also pay apportionments but only to the Episcopal and General Administration funds.

In the U.S., the formula for determining an annual conference’s apportionments is its total local church net expenditures multiplied by a General Conference-approved base rate.

Net expenditures are what a church spends after capital expenses, apportionments and benevolent giving. Put another way, the fewer local churches there are, the lower the net-expenditure side of the ledger.

The current budget proposal coming to General Conference calls for reducing the base rate, too, to one that is 21.2% lower than what the 2016 General Conference approved.

All of this means the general church will have a much smaller pool of funds to use for its various ministries.

But the ministry will continue, promised Judi Kenaston, the Connectional Table's chief connectional ministries officer.

"With great sacrifice, our general agencies — like our local churches and annual conferences — continue to offer creative leadership, programming and mission with just five loaves and two fish," Kenaston said in a statement after the meeting.

Three bishops talk during the joint General Council on Finance and Administration board and Connectional Table meeting on Feb. 19-20 in Franklin, Tennessee. From left, are New York Conference Bishop Thomas J. Bickerton, Council of Bishops president; North Katanga Area Bishop Mande Muyombo, Connectional Table chair; and retired Bishop Michael McKee, GCFA board president. Photo by Melissa Jackson, General Council on Finance and Administration.

Help for funding the bishops

In developing the denominational budget, the GCFA board recommends the allocations for the Episcopal and General Administration funds. The Connectional Table — which coordinates denominational ministries and resources including the work of general agencies — recommends the allocations for the other five funds.

Both the GCFA board and Connectional Table have long agreed the denomination-wide budget should be significantly reduced, given the financial pressures on local churches and annual conferences. But they previously have differed on how low to go while still sustaining ministries at all levels of the denomination.

At the most recent meeting, both groups came to mutual agreement about the budget allocations. But both leadership bodies struggled with how to handle the long-shaky Episcopal Fund that supports the work of bishops.

Since 2019, GCFA staff have warned that without changes, the Episcopal Fund was in danger of running out of money. The pandemic actually helped the bishops build up their reserves by reducing travel and ultimately the number of bishops in active service.

While the budget approved by the 2016 General Conference called for 46 active bishops in the U.S., currently 39 are serving — often taking on expanded episcopal areas.

The budget proposal approved last year provided funding for only 22 bishops in the U.S. and 22 in the central conferences. That total includes two additional bishops in Africa, where the church is growing.

Council of Bishops President Thomas J. Bickerton told those gathered why he and other church leaders think going down to 22 U.S. bishops would be too steep a drop at this point.

“In this critical period of time in the church,” Bickerton said, “to go that low in the number of bishops in the United States would not be helpful — in terms of bridging the transition, providing effective leadership in the midst of all the changes happening and serving as a bridge to the connection.”

Instead, he said, the bishops are hoping to reduce their numbers in the U.S. through natural attrition.

This year, seven U.S. bishops are slated to retire. If there are no elections, that would bring the number down to 32 U.S. bishops. So far, three of the five U.S. jurisdictions — the North Central, Southeastern and South Central — have announced they anticipate not holding any bishop elections.

In 2028, Bickerton said, another 14 U.S. bishops face mandatory retirement — bringing the number down to 18. Bickerton, who also leads the New York Conference, said that in the next four years, the bishops hope to work with other United Methodist leaders to revise episcopal area boundaries and even the role of bishops.

“We’ve been asking for this brief runway period to be able to do this work,” Bickerton said.

But to pay for 32 bishops in the U.S. over the next four years requires adding $15 million to the Episcopal Fund. 

While supportive of the bishops’ request, members of the Connectional Table expressed reluctance to boost the Episcopal Fund at the expense of the denomination’s general agencies, which already have experienced deep cuts.

Between 2016 and the end of last year, the number of agency staff has gone from 793 to 483, a reduction of about 39%.

Retired Bishop James Swanson Sr., who is now the interim top executive of United Methodist Men, summed up the frustration of many Connectional Table members that they were being asked to find some way to cut $15 million “at crunch time.”

“What all agencies are trying to say is that … the whole body needs to absorb this in some kind of way,” Swanson said.

Ultimately, with the encouragement of the Connectional Table, the GCFA board did support a compromise to help the Episcopal Fund and raise the number of U.S. bishops to 32.

The board decided that $7.5 million of the $15 million added support for bishops would come from a very slight increase to the base rate compared to what was proposed last year. The other $7.5 million would come from additional cuts to the allocations for general agencies.

Overall, the World Service Fund will be cut nearly in half compared to the budget passed in 2016. The biggest World Service Fund-supported agencies — Church and Society, Global Ministries, Higher Education and Ministry, Discipleship Ministries and United Methodist Communications — will see a nearly 53% cut from their budgets.

The GCFA board plans for the agencies to receive a one-time influx of funds from the Benefit Trust, which General Conference created in 1996 to help support the benefits of agency employees and retirees.

Wespath, the denomination’s pensions agency, has submitted legislation to General Conference on agency retirement benefits that, if passed, would lead to the closure of legacy plans and the addition of funds to the Benefit Trust for distribution.

North Katanga Area Bishop Mande Muyombo, the Connectional Table chair, told those gathered that he, like his GCFA counterpart Bishop McKee, recognized the impact of the budget cuts on people’s lives.

“My plea to us as we move forward as United Methodists is to lead with a sense of humility,” he said. “How can we liberate ourselves from focusing on powers or money or positions and refocus on the least of these?”

Toward the end of the meeting, California-Nevada Conference Bishop Minerva Carcaño — a GCFA board member — called on her fellow bishops to have a deep conversation about  the implications of the budget proposal just approved.

"We are the ones most blessed by these decisions, and by that I mean those of us who are bishops," she said. "We are the ones most blessed in terms of the support for our ministry. It is critical ministry. It is leadership ministry. But we need to look at the whole. And so I am hopeful and committed to helping our Council (of Bishops) have the very deep conversation about the nature of the church and the nature of the episcopacy, why we have the connectional system we have that includes agencies .... and what it means to work with one another collaboratively for the sake of the mission and ministry that God has given us."

Roland Fernandes, the top executive of Global Ministries, said in a statement after the meeting that he was grateful for the work of both the GCFA board and Connectional Table through a long and cumbersome process.

“Though these reductions will negatively impact our ability to participate in mission and ministry around the world,” he said, “we will continue to serve as best as we can because it is needed more than ever in these challenging times.”

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