Finance board gets update on giving, reserves

As United Methodists have faced a pandemic and a potential church split, giving to denomination-wide ministries has become more variable.

That was evident when the General Council on Finance and Administration board on May 14 received an update on giving in the first quarter of the year.

Bottom line: U.S. apportionment receipts were down by about $857,000 through March 2021 compared to the same period in 2020 when the pandemic started.

However, that drop follows the denomination’s record-high apportionment collections of nearly $40 million in December 2020.

What this volatility in giving indicates about congregational finances is unclear.

Rick King, GCFA’s chief financial officer, pointed to another possible cause for the dip that has nothing to do with financial distress.  

“We’ve heard conferences saying that some are giving at the proposed rates heading to General Conference rather than the actual apportionments,” King said at the board’s online meeting.

Trouble is, the ongoing COVID-19 pandemic has postponed General Conference — the denomination’s top lawmaking assembly — until Aug. 29-Sept. 6, 2022.

In the meantime, the Judicial Council — the denomination’s top court — has ruled that until General Conference can adopt a new budget, the one passed in 2016 remains in effect. That means GCFA is still using the same apportionment formula General Conference approved five years ago.

Apportionments — shares of church giving — are what sustain United Methodist ministry beyond the work of individual congregations. Denomination-wide ministries receive apportionments from annual conferences, which in turn receive apportionments from local churches. About 90% of giving remains in the local church.

U.S. conferences distribute their apportionments among seven general-church funds. Each fund supports a different category of ministry: bishops, ministerial education, the work of most general agencies, general administration, the Black College Fund, Africa University and ecumenical work.

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

In the first three months of 2021, collections from central conferences were 2.6% higher than the same time last year. Still, that increase was not enough to overcome falling U.S. apportionments receipts.

Overall, the general church funds received just under $13 million in the first quarter 2021. That’s about a 6% decline from the same time last year.

However, collections among the general-church funds varied wildly. U.S. collections for the Episcopal Fund that supports bishops actually increased 17% compared to 2020. On the opposite end, collections plummeted 55% for the Interdenominational Cooperation Fund that supports ecumenical work.

That aligns with the dramatically reduced general-church budget the finance agency plans to submit to the coming General Conference.

The proposed budget includes an increase for the Episcopal Fund and cuts to all other funds — most dramatically for the interdenominational fund, which has sizable reserves.

The budget proposal remains a work in progress until General Conference meets.

One big challenge before GCFA is determining the impact of a potential denominational split on finances.

After decades of debate regarding LGBTQ people, General Conference faces multiple proposals to divide the denomination along theological lines. Among those proposals is the much-endorsed Protocol of Reconciliation and Grace through Separation.

This summer, GCFA plans a second survey of annual conference leaders about what they see as the likely effect of church closures and disaffiliations. Financial leaders plan to use those survey results as part of budget calculations. The GCFA board and other denominational bodies plan to revisit the budget multiple times before it goes before General Conference delegates.  

“It is crucial that we take great care in how we craft the budget,” the Rev. Moses Kumar, GCFA’s top executive, told the board. “Your input is essential.”

For now, the denomination’s agencies already are cutting back expenses and adjusting ministries in anticipation of the challenges ahead. Most have budgeted for a 50% apportionment collection rate in 2021.

Bishops also are making adjustments that will cut costs to the Episcopal Fund, which was seeing its reserves dwindle even before the COVID-19 crisis.

King said the fund had $14.2 million in reserves as of the end of 2020 — down from $20 million at the end of 2016.

Bishops initially had recommended a hold on U.S. bishop elections until 2024 to stabilize the fund, but they have now rescinded that recommendation and scheduled elections for 2022.

In the meantime, active bishops are planning to expand their workloads to cover areas where bishops are retiring, and at least two retired bishops have taken on interim roles. That means salaries are under budget, King said.

In part because of bond performance last year as well as reduced expenses, the General Council on Finance and Administration itself has seen its reserves exceed six months of operating expenses. But agency staff say it remains difficult to determine whether this surplus is a short-term or longer-term situation given the denomination’s uncertainty.

In other actions:

The board approved a grant of $240,000 from the General Administration Contingency Fund to the United Methodist Commission on Archives and History. The agency plans to use the funds for a website redesign, hardware and equipment as well as information technology labor to bolster its "ministry of memory." With the grant’s approval, the contingency fund has a balance of about $2.4 million.

The board also heard an update on the response by the United Methodist Committee on Relief to the COVID-19 surge in India and neighboring Nepal.

Roland Fernandes, the top executive of UMCOR and its parent agency, the United Methodist Board of Global Ministries, said the relief arm is working with partners in India to bolster health care. So far, he said, UMCOR has raised $94,000 for the effort but more is needed.

United Methodist Women also has distributed $9,500 to Christian Medical College in Vellore, India, for the treatment of COVID-19 cases, said Harriett Jane Olson, the group’s top executive.

The GCFA board meeting concluded with Bishop Mike McKee, board president, urging fellow board members and others to give to UMCOR’s efforts. The denomination’s relief arm funds its work with direct donations, with money only going where designated.

“I’m all for prayer,” said McKee, who also leads the North Texas Conference. “I am also all for responsible action on behalf of Christian people.”

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 Weekly Digests.