A projected 35% reduction in income and a $1.2 million budget deficit will make 2021 a year “to face up to reality [but] … not a time for the church of the risen Christ in the Diocese of Los Angeles to recede” from its vital ministries to others, Bishop Diocesan John Harvey Taylor told a Sept. 17 online meeting of Diocesan Council.
Taylor asked council members to take a message back to their deaneries and congregations that the budget shortfall is the result of a lack of revenue, and not excessive diocesan spending.
Attempting to balance the budget by cutting vital ministries, diocesan staff, or support to mission congregations is “not the Christ-like way to proceed into an unknowable future,” Taylor added. Especially during a time “in which the only answer to the world’s polarization and selfishness and impatience with difference and prejudice and commitment to unjust outcomes — the only response is the unity of Christ.”
Projected deficit, reduced revenues
Diocesan Treasurer Andy Tomat’s monthly report to council forecast an austere 2021. “Based on the actual mission share fund receipts we have received so far this year, the 2021 mission share fund pledge income is now forecast at $4 million, down from the $4.6 million we had optimistically projected for 2020 in the hopes people would raise their level of giving,” he said.
The projected deficit is the result of a revenue shortfall, of congregations failing to keep pace with their mission share fund (MSF) obligations, according to the Rev. Michele Racusin, diocesan chief financial officer.
The Covid-19 pandemic may be considered a slight factor in the reduced income, but “it is not a death sentence,” she said.
In fact, “there are a number of parishes and other institutions in the diocese who have realized a tremendous influx of support and their bottom lines are going up” during the pandemic.
“Part of that has to do with the online giving and the streaming of services and the stewardship conferences,” led by Bishop Suffragan Diane Marie Jardine Bruce and TENS (The Episcopal Network for Stewardship) Executive Director Davey Gerhard.
Those webinars may be viewed on the diocesan website here.
In previous years, budget deficits were offset by grants from Corporation Sole funds. Such grants now are unlikely. “This has been a long time coming,” Taylor said. “As long as I’ve been in this diocese, Corp Sole has, one way or another, come to the rescue at a time like this. Those days are either over or nearly over.”
Corp Sole consists of money given to the Bishop of Los Angeles through bequests and gifts. Some funds are designated for specific purposes, such as seminary scholarships or campus ministry, while others are unrestricted, and may be used at the bishop’s discretion.
Congregational MSF obligations support diocesan ministry and mission. The diocese’s 38 mission congregations are required to pay 10% of their annual plate and pledge income into the mission share fund. Parishes, on the other hand, are asked to pay 12-15% of their annual budgets into the fund. Yet some parishes pay as little as 2%, Racusin said.
Facing this new reality was a topic of discussion at the 2019 diocesan convention, Taylor recalled. “We were clear that we were burning diminishing capital at an alarming rate and it wouldn’t be able to continue for much more than a year or two.
“That time is upon us. In 2019, we were optimistic in our mission share fund projections and, as a result, passed a budget that came short in revenue, resulting in a pretty substantial deficit in 2020 which has had the effect of burning more capital.”
The likelihood of ‘severe and deeply painful cuts’
As capital funds have dwindled, some diocesan institutions and programs, like Seeds of Hope, the diocesan food justice ministry; the Interfaith Refugee and Immigration Service, also known as IRIS, and the New Community ministries, have become self-sustaining through independent grants and fundraising, Tomat said.
Those ministries remaining dependent on MSF and Corp Sole funding likely will face “severe and deeply painful cuts … because there are no resources to continue to support them,” Taylor told council members.
He cited the possible elimination of yearly grants for:
- Bloy House, the Episcopal Theological School at Los Angeles, which educates, forms and trains lay and ordained church leaders, $30,000;
- Stillpoint, a diocesan institution which trains spiritual directors, $52,000;
- The Neighborhood Youth Association, for 113 years an empowerment and educational enrichment resource for at-risk youth, $100,000;
- The Program Group on Global Partnership, $13,000;
- Deacon ministry support, $5,000;
- Contributions to the bishop’s discretionary funds, used to support congregations and individuals, $25,000;
- Bishop’s offices conferences and travel, $46,000.
Tomat said the MSF will only be able to fund core commitments, such as: the diocese’s annual pledge to The Episcopal Church; grants to struggling mission congregations; administrative staff providing clergy, church and school support; the bishops’ offices; and Echo Park building operations. “And, even with those cuts, we are still looking at a $1.2 million deficit.”
The report “is a work in progress,” Taylor told the council. “But our call to you today is for Diocesan Council to reach out to everyone’s churches, to explain the situation the diocese is facing and to push to increase mission share fund giving over their 2020 levels.”
The Rev. Canon Gary Hall, interim Bloy House dean, said the seminary is in the process of creating infrastructure for future development and fundraising. “Next year will be a challenge, but we’ll figure it out,” he said.
Diocesan commitment to Bloy House’s vision of theological education “is unstinting,” Taylor said. Proceeds from the online Nov. 7 Bishop’s Gala (previously known as the Bishop’s Dinner), featuring the Most Rev. Michael Curry, presiding bishop of The Episcopal Church as guest speaker, will benefit the seminary. Reservation information will be announced soon.
“A lot of the energy behind the capital campaign grows from the strong belief diocesan-wide that Christian formation and formation of the leaders the church is needed in these times,” Taylor said. “In Los Angeles, that means Bloy House.”
Mission and ministry—‘where our heart is’
At least 90% of diocesan revenue derives directly from congregational MSF pledges, Racusin told council members. The other 10% comes from self-sustaining ministries, dividends and investments. Congregational 2020 pledges totaled $4.2 million. If every church paid its pledge in full, there would be a $94,000 budget surplus “and we could almost fully fund those ministries we’ve taken out,” she said.
Expenditures highlight “where our heart is … about 40% goes directly to mission and ministry,” she added. Other outlays include technological and physical plant maintenance and upgrades and diocesan staff, who supply financial, human resources, transition and communications support to congregations.
“Our challenge this year and next year and as the years progress is getting congregations to understand the importance of the mission share fund pledge and what it does for the life of the diocese and the world around us,” Racusin said.
Dan Valdez, a parishioner at All Saints Church in Highland Park and board chair of the Episcopal Community Federal Credit Union, reported positive results from a newly created group of MSF “missionaries” who have contacted congregations with MSF arrears.
“The top five (in arrears) are no longer the top five,” said Valdez, a representative of the Bishop’s Task Force on Budget and Finance. “We will continue the work with others.”
Emergency appeal, capital campaigns blossom
In spite of fiscal austerity, “flowers are blooming everywhere” as Southland Episcopalians stay focused on mission and ministry, “because the world needs us desperately,” Taylor said.
The One Body One Spirit Emergency Appeal is nearing $200,000 from 400 contributors, he reported. “The diocesan website shows how you can make a gift and, if you’re an institution, how to apply for a grant.”
The Corporation of the Diocese reviews the grant requests. More than a dozen gifts have been awarded to congregations for technological and other pandemic support. Another award cycle is expected to be announced in the coming weeks.
Jessica Savage, executive director of CCS Fundraising, the Irvine-based consultant for the diocese’s capital campaign told the council that several leadership committees are at work, and that the campaign has already raised $1.2 million, including pledged gifts, planned gifts and real estate sales, plus another $1 million in verbal commitments through grants and pledges.
The fundraising goal for the diocese, Savage noted, is $30 million, with an additional $10 million for collaborative campaigns with congregations. The totals are based on the feasibility study and people who indicated interest; they will be reassessed, she said, after the coronavirus pandemic eases.
Compensation, creative stewardship, the New Community
Bruce advised congregations approaching stewardship season to adapt campaigns to online technology, and, she said “don’t leave money on the screen by not offering the ability for people to give and to give easily.”
“When you’re having a service, give people time to give. Don’t just run into the next thing. Offer nice, meditative music. Give that pause and give them time. We’re finding that when you do that — especially the people coming to us because they are hungry for a message of hope, which this church has — there is an opportunity for them to be generous.”
In addition to the stewardship webinar series on the diocesan website, she cited another resource, the Salt Project, focused on social media campaigns for congregations with fewer than 500 members.
She hopes to collect outstanding compensation survey responses, and to address the issue of parity next year, depending on what happens with the Covid pandemic, Bruce said.
The New Community ministries, in response to socioeconomic and racial inequities, are offering a series of upcoming events, beginning with the 10 a.m. to 12 noon, Sept. 26 “Doctrine of Discovery” and including an Oct. 3 session on racial identity and an Oct. 17 program on racial capitalism.
“Because these topics are dense and different communities of color internalize, feel them and identify with them differently, we will offer you different views of how these different communities have been affected,” said Bruce. “We are very excited about this work, as are they.”
Program Group on Mission Congregations
The Rev. Canon Kelli-Grace Kurtz, chair of the diocesan Program Group on Mission Congregations, reported that, of the 38 mission congregations, 26 have requested mission development fund grants for 2021. Requests ranged from $12,500 to $98,000.
The group will make recommendations for grant approvals to the council and to the bishop in October. “We are very aware of the tight budget we’re looking at,” Kurtz said. “We are also very aware our mandate … is two-fold, to advise the bishops, to the best of our ability on the health and well-being of mission congregations, but also to advocate on behalf of mission congregations.”
Diocesan Convention: a 1-day gathering
Canon Steve Nishibayashi, diocesan Secretary to Convention, reported that the 2020 convention will be held virtually, one day only, Saturday, Nov. 14. A convention Eucharist will be live-streamed diocese-wide the following day, Sunday, Nov. 15.
Deadlines for submitting registration, virtual exhibitors and delegate information, as well as the dates for pre-convention deanery assemblies, may be found on the convention website. The assemblies — and convention itself — will be held virtually. Congregations are expected to gather delegates and leaders locally to attend both.
In advance, however, Nishibayashi said, “We want you to submit what your technology needs will be for hosting pre-convention deanery meetings. Most notably, if you have the ability to screen share.” Contact Nishibayashi at email@example.com or Samantha Wylie, firstname.lastname@example.org.
Also of note: Bob Williams, Canon for Common Life and diocesan archivist, reminded council of the upcoming Oct. 9 – 12 Faith and Blue initiative, intended to reinforce connections between law enforcement officers and the communities they serve.
Williams also noted that the Mt. Wilson Observatory, which has so far narrowly escaped the Bobcat wildfire, was named for Benjamin Davis Wilson, a founder of both St. Athanasius Church, Los Angeles, and the Church of Our Saviour in San Gabriel. Southland Episcopalians can gain encouragement from Wilson’s legacy. “He withstood a lot of things, including being mauled by a bear,” Williams said.
The Bobcat Fire, one of the largest in California history, has scorched more than 100,000 acres, and is one of 27 fires actively burning in the state.
Diocesan Council will meet next online, at 4 p.m. on Thursday, October 22.