Conferences diverge in handling church exits

Key points:

• United Methodist annual conferences have a lot of leeway in administering church disaffiliations. 
• Some conferences are looking to use their reserves to cut the exit costs. Some are adding more financial obligations. Most are hewing to the template found in church law.
• Even with these variations, the number of church exits is climbing.

How much does it cost for a congregation to leave The United Methodist Church with property?

In the words of the real estate adage, the answer often comes down to “location, location, location.”

With General Conference — the denomination’s top lawmaking assembly — postponed to 2024, plans for a formal denomination-wide separation over theological differences are up in the air. That leaves disaffiliation decisions up to each of the 53 U.S. annual conferences — regional bodies consisting of multiple congregations.

“Critical decisions related to the forward movement of the church were pushed down from the General Conference to the annual conference level,” Council of Bishops President Thomas J. Bickerton said. 

“That immediately widened the circle of input to cabinets, boards of trustees and committees on building and location. The challenge for alignment is directly related to the widened circle of input, divergent contexts and varied circumstances.”

The conferences are all relying on the same church law — the Book of Discipline’s Paragraph 2553 — that offers a pathway for churches to leave with property if they meet certain financial and procedural obligations. A rule of thumb is that the bigger the church, the higher its withdrawal costs.

However, the measure also allows for variation among conferences — especially on matters of expense. 

A departing church could be on the hook for thousands to more than a million dollars depending on its size and its conference’s policies. 

Even with these complications, an increasing number of congregations are heading for the exits. 

So far this year, U.S. annual conferences have approved about 300 church disaffiliations under Paragraph 2553. That’s up from about 130 disaffiliations over the past two years.

Still, the three-year total represents only about a 1.4% reduction from the number of U.S. United Methodist congregations in 2019 — when the disaffiliation policy took effect. As of that year, the denomination had 30,543 congregations in the U.S.

The number of church exits will grow. More than a dozen annual conferences already have scheduled special sessions for later this year to take up resolutions for church disaffiliations.

The rise in departures comes after the Global Methodist Church, a theologically conservative breakaway denomination, launched in May. Not every disaffiliating church is joining the Global Methodist Church. Some are remaining independent, and some are joining another branch of Methodism. 

But every departure is a loss. Bishop Debra Wallace-Padgett expressed the sentiment of many United Methodists when she told the two conferences she leads that she is deeply saddened that some churches and clergy will withdraw from the denomination.

“I believe with every fiber of my being that we are more together than we are separate,” she said in her state of the church address to both the Holston and North Alabama conferences.  

In this sad time, she stressed that United Methodists should persevere in making Christian disciples. 

For now, conferences are trying to balance two competing demands: To provide gracious exits for congregations that want to leave and to serve as responsible stewards of United Methodist resources so that pensions can be paid and disciple-making can continue. 

The Council of Bishops overwhelmingly has affirmed Paragraph 2553 as the way to strike the right balance.

“We believe that this paragraph provides a fair and equitable way for annual conferences to uniformly deal with disaffiliations,” Bickerton told UM News. “This paragraph provides a fair way for local churches to acknowledge their responsibility to meet previously made commitments to the connection.” 

Leaving the denomination always has required more than a simple congregational vote. Since the 18^thcentury, The United Methodist Church and its predecessors have maintained a trust clause, which states that all church property is held in trust for the entire denomination. Methodism’s founder, John Wesley, established the forerunner of the current trust clause.

The same 2019 special General Conference that strengthened church bans on same-sex weddings and “self-avowed practicing” gay clergy also passed Paragraph 2553 to offer congregations a limited release from the trust clause.

The church law applies only in the U.S. The 2019 special General Conference also established that legislation passed at the gathering would not take effect in central conferences — church regions in Africa, Europe and the Philippines — until 12 months after the coming General Conference. The church law is set to expire Dec. 31, 2023, months before the next General Conference is likely to take place. 

Among its requirements, Paragraph 2553 says a departing church must pay: 

• Two years of apportionments — shares of church giving that support ministry beyond the local congregation.
• Any outstanding loans or debts.
• The cost for the transfer of title or other legal work.
• A fair share of its annual conference’s unfunded clergy pension liability — that is, what conferences will owe retirees. An annual conference determines what a local church’s share is.

However, Paragraph 2553 also says annual conferences “may develop additional standard terms that are not inconsistent with the standard form of this paragraph.”

Brant Henshaw, president of the denomination’s National Association of Annual Conference Treasurers, has been trying to keep an eye on general practices regarding church disaffiliations.

“I think there’s a covenant that’s been in place around both pensions and the trust clause. That has to be recognized,” he said. “But we also have a ministerial covenant for where there are differences to bless and release and say, ‘go on your way.’”

Most conferences are applying Paragraph 2553 as written with no additional terms, Henshaw said. Those include both the Pacific Northwest and Alaska conferences where he is treasurer and director of administrative services, as well as the New York Conference, where Bickerton is resident bishop.

However, Henshaw estimates that about 15% to 20% of conferences have added terms — such as requiring disaffiliating churches to pay back recent grants or even a percentage of their assets if they have long withheld apportionments. 

He estimates another 15% to 20% of conferences — especially those expecting a large number of disaffiliations — plan to use their reserves to reduce the departing churches’ pension liabilities and other costs. 

The Northwest Texas Conference is a prime example.

Last year, the annual conference passed a nonbinding resolution that expressed the conference’s intent to leave The United Methodist Church en masse and join the Global Methodist Church. At the time, the conference expected General Conference to meet this August and approve a separation plan that would make such a move possible.

However, with General Conference postponed, that is not the case. The Judicial Council — the denomination’s top court — ruled earlier this year that without General Conference action, current church law does not have a mechanism for whole U.S. conferences to leave The United Methodist Church. 

That has left Northwest Texas working with individual churches to discern their next steps. 

In June, the annual conference approved a financial framework to spend down its reserves so that none of its roughly 200 churches must pay apportionments in 2023 or 2024. The annual conference also supported using a portion of the conference’s reserves to help exiting churches pay their share of unfunded pension liabilities. 

The conference has invited all of its churches to enter two weeks of prayer and fasting to discern where God is calling them. Northwest Texas plans to have a special annual conference session on Dec. 3 to take up disaffiliations.

The Rev. Jeff Fisher is helping churches navigate the process as the conference’s newly hired director of transitional ministries. He said, at this point, it’s too soon to know how many of the congregations will vote to disaffiliate or whether the conference’s remaining churches will need to merge into another conference.

“There’s a significant number going to the Global Methodist Church and a significant number staying and some going independent,” he said. 

The Northwest Texas Conference consulted with Wespath Benefits and Investments, the agency that manages investments for pensions and other retirement-plan assets for United Methodist clergy and lay employees on behalf of conferences.

Wespath has not taken a position on whether conferences should use their reserves to offset pension liabilities. In response to frequently asked questions, the agency urges conferences to “consider equity among local churches in the application of reserves. Reserves should not be used to benefit only disaffiliating churches.”

The California-Pacific Conference follows the parameters of Paragraph 2553 with specific formulas around asset valuation.

“Those formulas are not about making it impossible or unaffordable for congregations to disaffiliate,” said the Rev. Karen Tannheimer, chair of the conference’s board of trustees and disaffiliation task force.  

She added that the conference’s policy “is about ensuring congregations and pastors engage in a balanced process that includes options and choices that reflect the true desires of the body.”

In a video on the conference’s disaffiliation policy, Tannheimer and California-Pacific Conference Bishop Grant Hagiya noted that clergy and lay members have a long history of working together despite disagreements. “Our region is not a utopia, but it is a place with people who love God and follow Jesus,” Hagiya said. 

Lonnie Chafin, Northern Illinois Conference treasurer and a veteran General Conference delegate, said he knows of no conference playing hardball.

“We have no wish to capture compulsory Methodists,” he said. “If a church — and not just a clergy person or the leaders, but a church — wants to leave, we will do all we can to ease their transition.”

He added that he also hopes to see conferences do what they can to promote United Methodist mission and ministry. 

“Everyone is exhausted by all this disaffiliation talk,” he said. “And we should spend our every minute emphasizing the value of the UMC to the world.”

Hahn is assistant news editor for UM News. Contact her at (615) 742-5470 or newsdesk@umcom.org.To read more United Methodist news, subscribe to the free Daily or Friday Digests.