Looking at financial impact of GC2020 plans

With a possible denominational split on the horizon, the task of preparing The United Methodist Church’s budget for the next four years comes with far more uncertainty than usual.

During a Feb. 21 online meeting, the General Council on Finance and Administration board discussed some of the what if’s that could affect the church’s financial future. 

Those include the impact of the proposed Protocol of Reconciliation & Grace through Separation and other possible splits over how accepting to be of homosexuality.
 
The finance agency board also raised questions about what the proposed addition of five new bishops in Africa means for the already imperiled funding for the Episcopal Fund that supports the denomination’s bishops.
 
The agency is preparing the general church budget proposal that will go before General Conference on May 5-15 in Minneapolis. The denomination’s international lawmaking body will have final say on any possible plan of separation as well as the 2021-2024 budget for denomination-wide ministries.
 
One thing the GCFA board and staff cannot answer at this point is just how many churches and members will leave if a plan of separation passes.

Even if no separation plan passes, church leaders expect lean times ahead. Already in 2019, the highly polarized denomination experienced nearly an 8 percent drop in general-church support compared with 2018.
 
“There will be a lack of funding no matter what happens after General Conference. I think we have to acknowledge that,” said Bishop Mike McKee, GCFA board president. McKee also leads the North Texas Conference.

The online discussion was a preview for a face-to-face meeting the GCFA board has planned March 9-10 at the Scarritt Bennett Center in Nashville, Tennessee. The March meeting will include a review of the legislation submitted to General Conference and a review of the budget already drafted. 

McKee cautioned that the GCFA board would have to continue working on the budget during General Conference to incorporate any decisions the lawmaking body makes. 

“We’re going to have to be willing to meet and respond rapidly to General Conference as things unfold,” he said. 

General Conference delegates typically take up the budget the last day of the 10-day meeting. The assembly establishes the total amount of money needed to support churchwide ministries over four years. 

That amount is then apportioned mainly to U.S. conferences, which in turn ask for giving, or apportionments, from local churches. The U.S. provides 99% of the funding for general church ministries. 

Delegates are asked to approve the base percentage rate used in calculating apportionments. Each U.S. conference’s apportionments are determined by multiplying the base percentage rate by its local church expenditures.
 
Even before legislation to split the church was drafted, GCFA had already planned to submit to General Conference a $493.8 million budget — an 18.3% reduction of the current budget and the smallest in more than 20 years. GCFA planned the reduction in hopes of keeping more funds in local churches. 

The proposed protocol comes with its own immediate financial impact. The mediated agreement by a diverse group of traditionalists, centrists and progressives aims to avoid lawsuits that plagued other denominations that split over LGBTQ inclusion.
   
The plan would allow traditionalist churches — those who oppose same-sex weddings and the ordination of noncelibate gay clergy — to leave with their properties and receive $25 million over four years in United Methodist church funds. The protocol also would set aside $2 million of funding for the forming of any other Methodist denomination.

The plan also asks that $39 million be reserved over the next eight years for the denomination’s ethnic plans and Africa University.  Half of that funding is already in the four-year budget GCFA is bringing to General Conference, said Rick King, the agency’s chief financial officer. The hope is that General Conference would maintain the same level of funding for those ministries no matter what the future holds. 

GCFA has asked for feedback on how to fund the other $27 million.
 
The Liberia Annual Conference approved a resolution Feb. 14 urging General Conference to amend the protocol. Among the changes the conference seeks is to equally divide $120 million in United Methodist funds among the five U.S. jurisdictions and the seven central conferences in Africa, Europe and the Philippines.

In a chat stream during the GCFA online meeting, Christine Dodson said the amount the Liberia resolution requested calls for “basically all of the reserves of all of the general agencies to be divided — and some of that is in buildings.”

Dodson, North Carolina Conference treasurer and GCFA board vice president, served as chair of the board’s task force on the denomination’s reserves. In November, the task force reported that the denomination’s general funds had about $109 million in unrestricted net assets by the end of 2019.

That amount already is expected to decline. As part of the general church budget, the denomination’s agencies are overall expecting a 23% budget cut.
 
“I wonder if our delegates really understand the impact of that 23% on our agencies, as in what that does mean to ministries,” Dodson said. She expects the agencies will see some major structural changes.

At the board’s request, the agencies’ top executives will present a report in March on how the cuts will affect their ministries.

Another big question mark was the funding of bishops. GCFA projects that at current giving rates the Episcopal Fund would go into the red by 2024.
 
The United Methodist Church currently has 66 active bishops supported by the denomination’s Episcopal Fund and has budgeted to add five more in Africa. 

The Jurisdictional Study Committee, authorized by the 2016 General Conference, looked at the number of bishops in the U.S. The group is proposing that the Episcopal Fund cover the costs of five bishops in each jurisdiction, and annual conferences directly support any additional bishops in that jurisdiction. 

Moses Kumar, GCFA’s top executive, said that might not be the solution to the bishops’ money woes. 

“It seems the Jurisdictional Study Committee is moving costs from the Episcopal Fund to the jurisdictions, but that will just reduce what the conferences pay into the fund,” he said.

McKee, the board’s president, said GCFA has the challenge of making sure General Conference delegates understand the financial implications of their decisions. 

“A major separation has significant consequences going forward,” he said. 

Hahn is a multimedia news reporter for United Methodist 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.