Working Draft Notes on Episcopal Identity and Structure
TREC July 2013
What does it mean to be an Episcopalian? What is unique or central to the Episcopal way of being Christian? Episcopal identity is a communal expression of living out the way of Jesus in response to the Gospel. Recent research among Episcopalians found “widespread consensus on core themes of Episcopal identity—a sacramental and incarnational faith as expressed in the Book of Common Prayer, rooted in Scripture (and tradition), holding Christ as central, and expressing this faith in public worship and pastoral ministry” (Around One Table, p. 99)1. It is striking that the missional horizon of service to the world does not feature centrally or explicitly in these themes as articulated by Episcopalians; we believe it should.
Breadth/expansiveness: Embracing the classical Anglican ideal of “comprehension,” the Episcopal Church values a wide spectrum of belief and practice within the “ordered freedom” of Prayer Book liturgy.
- Structure should foster unity while resisting attempts to unduly narrow the church’s life and witness. This is a key overarching organizational principle.
A sacramental view of Christian life: Episcopalians understand the sacraments of Baptism and Eucharist as touchstones for the church’s identity and witness, as they represent God coming to us in the ordinary stuff of the world (water, bread, wine). The Christian life is not an escape from this world, but rather the seeking of abundant life for all within it.
- In order that the Sacraments may be accessible in the world, structure fosters mission: growth, creativity, innovation, and exploration; where it does not it is reformed.
An incarnational view of human life: The incarnation represents God’s definitive “yes” to human life, experience, and culture. God participates fully in the particularity of human life in Christ. This means that every local culture can bear God’s life, and the church must take shape within those cultures if it is to be the body of Christ faithfully.
- Structure honors and fosters a diversity of cultural expressions. Structure allows for centralized, decentralized, and distributive models of community life and mission. While maintaining clarity about organization it should make room for new expressions and support new collaborations.
The arts, liturgy, and mystery: This sacramental and incarnational view leads to affirmation of the arts and music as means to express the sacred. Rooted in deep traditions of Christian practice over the centuries, Episcopalians treasure liturgy and embrace mystery. At its best, this is a deeply participatory value, not merely performance.
- Structure encourages new liturgical expressions for mission and creates accessibility to a wide variety of materials for prayer and song electronically. Such expressions should be unhampered by required slow processes of canonical approval or the processes of printing, thereby enabling quick dissemination of much-needed resources.
Continuity and change: Anglicanism is a creedal tradition that seeks to uphold classical Christian faith yet is contextually adaptive to varying historical circumstances. This reflects a deep commitment to the incarnation. As a member of the Anglican Communion, The Episcopal Church values belonging to a historic and expansive body of Christians throughout the world and the collaboration in mission that this makes possible. As contexts are always changing, so too must the church’s life and organization change.
- Structure is organizationally lean for the new age of mission. Budgetary, canonical, and structural simplicity allow for ongoing adaptation and change. The church’s structure supports the work of God’s mission of reconciliation through evangelism and service.
Social engagement and prophetic dissent: These values lead to engagement with social contexts and challenges, both from the establishment legacy’s sense of responsibility for the common good and from the posture of openness to the world that the values named above foster. The Episcopal Church aspires to be fully inclusive and to impact society in Christ’s name. Its understanding of mission is expansive, encompassing grace, mercy, forgiveness, justice, and reconciliation for all people in all of life as well as care for God’s creation. The Gospel calls us to dissent from predominant patterns and structures in the world for the sake of faithful witness to God’s reign.
- Structure fosters contextual engagement and enables regional and global collaboration on challenges that face the diverse communities of The Episcopal Church while not overly focusing on any one area to the detriment of others.
1. This working draft document on Episcopal identity is deeply informed by research among thousands of Episcopalians conducted in the Episcopal Identity Project and published in David T. Gortner et al, Around One Table: Exploring Episcopal Identity (College for Bishops/CREDO, 2009).
Interim Report of TEC Structure for Dummies Committee
July 10, 2013
The TEC Structure for Dummies Committee (the Committee) has been focusing its attention on identifying and describing the existing governing structures of the Church so that TREC members will have a common understanding of the status quo to inform their discussions on recommendations for change, reform and improvement. The Committee is mindful that TREC’s mandate is about more that reforming Church governance structures – indeed, is about re imagining the Church, but we believe that structural reforms are very likely to be a significant part ofTREC’s final report to General Convention.
The Committee has found a number of very useful, informative and accessible sources about Church governance structures, polity and decision-making processes. Appendix A to this Report is a bibliography of these sources. We are confident that there are many more comparable sources, but the Committee relied primarily on these.
Among these background materials is “Shared Governance, the Polity of The Episcopal Church” a 2012 collection of essays published prior to the 77th General Convention, prepared by the House of Deputies Special Study Committee on Church Governance and Polity (Church Publishing, Inc., New York, NY). The Committee commends this 100-page volume to all TREC members as essential reading. ”Shared Governance” is not an exhaustive treatment of the topics it covers (although it does include a comprehensive bibliography), and there may be places
where Church governance experts may take exception to some details, but the book is an excellent introduction to Episcopal Church governance and policy.
A subcommittee of the Committee in tum approached the “pure structure” aspect of the Committee’s charge reflecting on two questions posed by Committee member Mary Gray-Reeves (which have been edited for the context of this Report).
1. How do Church structures weigh down our process of proclamation? I think there are other things that also weigh it down, but we are about structure. What are the implications of cultural shift that make this particularly an issue and what would make it better?
2. How does the structure end up teaching the Church how to be a faith community – and, is what the structure teaches, what we want to say as a Church? Is our process of diocesan committees and TEC CCABs instructive to congregations about how to “be church” and is this effective church? Are there other effective ways to make decisions and which also can model something about sharing good news?
This Report does not purport to answer these questions. Instead, we suggest that readers keep these questions in mind while reading the Report. At the end of the Report, we return to these questions and pose some additional questions for further reflection and discernment.
The Committee’s work has also been informed by discussions with Kirk Hadaway, Officer for Congregational Research at The Episcopal Church Center; Bishop Stacy Sauls, Chief Operating Officer of The Episcopal Church Center; and Tom Brackett, Missioner for Church Planting and Ministry Redevelopment at the Church Center. In addition, Committee members have brought to the Committee’s work their experiences and learnings from the other Church CCABs on which they are currently serving.
II. What is the Purpose of Church Structures?
Why do we need or desire church structures and governance institutions and processes? People
of faith develop and establish church structures, institutions and rites that are intended to carry on mission and ministry over long periods of time for future generations of faithful persons. When the Treaty of Paris was signed in 1783, the American colonial parishes of the Church ofEngland were faced with creating their own church institution and governance structures, and did so culminating in the adoption of the first Church constitution in 1789. That constitution
established a domestic episcopate elected locally; participation of lay and clergy in the organizations and operation of the Church- sometimes acting separately but often acting together; and the principles of local independence and interdependence.
The Church then evolved as a collaboration or confederacy of dioceses; then in the twentieth century as a more corporate model, reflecting developments in American culture, as the Presiding Bishop was given executive authority and the National (now Executive) Council came to function as the board of directors of the Domestic and Foreign Missionary Society. As resources ebbed and the beginning of the membership losses, societal changes and Church fracturing emerged in the 1960s, the Church governing institutions began to lose resources and power- but remained largely intact. (We now fund the multiple layers of governance and administration at levels considerably lower than in the past.) Attached to this Report is a chart that shows the change in average Sunday attendance and revenue by Diocese over last 10 years.
The Appendices include two organization charts and a map of the Church’s current Provincial structure. The “canonical” organization chart presents the official governing bodies of our Church, from congregations all the way up to the General Convention, plus the Executive Council and the so-called interim bodies. The other organization chart goes into somewhat greater detail than· the first.
III. An Overview from the House of Deputies’ Web Site
This portion of the Committee’s Report is from the Web site of the House of Deputies. This is a concise and accurate overview of the fundamentals of current Church governance.
All major decisions affecting the life of The Episcopal Church are made jointly by lay people, clergy and bishops.
Parishes elect a vestry to govern the affairs of the parish in conjunction with the rector, who is sought and elected by the vestry.
Parishes also elect lay delegates to attend an annual diocesan convention with all the diocese’s clergy and bishops. Diocesan conventions vote on the major policy decisions of the diocese, set the budget for the diocese and, at times, make statements about issues in the church and in civil society. Diocesan conventions also elect bishops to help lead their dioceses.
Diocesan conventions elect deputies as members of the House of Deputies of the Episcopal Church’s triennial General Convention. The General Convention sets the mission priorities, budget and policies of the Episcopal Church for the next three years. It approves changes to the Church’s Constitution and Canons, and broadly defines the standards of worship.
The House of Deputies is the older of the two Houses of General Convention. It has equal numbers of clergy and lay deputies selected by each of the 110 dioceses and one convocation of Episcopal Church congregations in Europe. The first session of the first General Convention, held in 1785, consisted only of the House of Deputies. It adopted a constitutional provision establishing a separate House of Bishops, which joined the Convention at its second session in 1789.1The bi-cameral nature ofthe General Convention continues today. The House of Deputies is composed of up to four lay and four clerical deputies from each of the jurisdictions, domestic and overseas, elected in the manner determined by each jurisdiction. The President of the House of Deputies (currently the Rev. Gay C. Jennings) oversees the legislative process of the House of Deputies.
The House of Bishops is composed of every bishop with jurisdiction (diocesan bishop), every bishop coadjutor, every suffragan bishop, every retired bishop, every bishop elected to an office created by General Convention, and every bishop who has resigned because of mission strategy-each of whom has a seat and vote. The House may also elect collegial members who are admitted with seat and voice, but no vote. Collegial members are bishops in the Anglican Communion who serve extra-provincial dioceses. There are approximately 300 bishops eligible to sit in the House of Bishops. The Presiding Bishop (currently the Most Rev. Katharine Jefferts Schori) oversees the legislative process in this House.
General Convention decisions take the form of resolutions agreed to by both the House of Deputies and the House of Bishops.
Resolutions come to Convention from the groups which carry out the work authorized by the previous convention as well as from bishops, dioceses, provinces (geographic collections of diocese), and deputies. Convention legislative committees hear public testimony on all resolutions before they come to the houses.2
Deputies and bishops cannot be instructed to vote one way or another by their diocese. They agree to come to Convention with an open heart so that they can prayerfully listen to others and be led by the Holy Spirit. And, they cannot refuse to vote on an issue.
legislative committee. Each Resolution is voted out of committee if only with an adverse recommendation, and thus each Resolution must be addressed on the floor of both Houses.
An Executive Council carries out the programs and policies adopted by the General Convention. The council is composed of 40 members: 20 of whom (four bishops, four priests or deacons and 12 lay people) are elected by General Convention, 18 of whom (one clergy and one lay person) are elected by each of the nine provincial synods (groups of dioceses), plus the Presiding Bishop and the President of the House of Deputies.
The House of Bishops often meets between General Conventions and its agenda is limited by the Constitution and Canons. It does not have any legislative power so it cannot initiate or amend the programs, budget, or Constitution and Canons of the church as adopted by General Convention. It does have some responsibilities for the discipline of bishops and it sometimes issues statements on matters affecting the general state of the church or in response to the needs of contemporary society
IV. Some Prior Reform Efforts
At General Conventions as far back as 1976 (and at the Special Convention held in 1969), the Standing Commission on the Structure of the Church began to propose a variety of significant, sometimes bold reforms of governance and institutional structures, almost all being rejected by General Convention. You may find this through reading prior Standing Commission on the Structure of the Church (SCSC) Blue Book reports using this link on the Archives’ Web site:
This Web site is well worth some rummaging around for TREC members. It contains all Blue Book reports back to 1976. Three SCSC reports are of particular interest: 1976, 1988 and 1997. Even a quick read of the reports reminds one that much of what the Church is struggling to discern now has been discussed, debated and acted on (generally by defeating proposals) in prior triennia. These include a unicameral General Convention; reduced size of each House (either through proportionate representation or a reduction to six Deputies from each Diocese); elimination of many governing committees, commissions and boards; strict limits on the number of Resolutions introduced; reform of the administration of Church business; elimination of Provinces, and reinvigoration of Provinces.
At the Special Convention of 1969, the General Convention’s Mutual Responsibility Commission proposed, with urgency, that General Convention meet every second year, stating that meeting more frequently “is an imperative.” Journal of the 1969 Special Convention, Appendix 6, P. 336. The Constitution was amended to make this possible, but in practice the meeting cycle has remained at once every third year.
V. What is the Domestic and Foreign Missionary Society?
For an explanation of the role of_the Domestic and Foreign Missionary Society (DFMS, or the Society), the Committee turned to a research report prepared at the request of the President of the House of Deputies by the Archives of The Episcopal Church in September 2012. Excerpts and adaptations from that research report follow (internal footnotes omitted).
In 1820, the General Convention adopted a constitution/or “The Protestant Episcopal Missionary Society in the United States for Foreign and Domestic Missions” in order to provide a means – by raising and distributing funds – to support missionaries in states and territories in which the Church was not yet organized. This first constitution, however, was deeply flawed. Right from the beginning the governance of the DFMS was at issue in terms of the rights of laity and bishops and who would have seat and vote on the board of directors. The 1821 Special General Convention looked at this salient concern along with one relating to GTS [General
Theological Seminary]. Acting on the Presiding Bishop’s request, General Convention adopted a new constitution and a new name: The Domestic and Foreign Missionary Society of the Protestant Episcopal Church in the United States of America.
The development of a number of missionary outposts in foreign countries led the DFMS’s Board to look at a recommendation to incorporate in 1843. Legal incorporation was pursued by the Board and completed in 1846 under New York State law without much farifare.
Recognizing the reality of a post-colonial international membership, the National Council in 1964 proposed renaming itself the “Executive Council.”Since 1920, Council had maintained a unified and tightly controlled executive relationship to General Convention. That relationship was tested, however, in the tumultuous 1960s, when external social changes created a groundswell for reforming institutions that were run largely by and for white males. Dramatic changes in the composition and expectations of the Church’s polity led to considerable tension between General Convention and Executive Council during the transitional years.
Executive Council’s membership was greatly expanded and its membership was broadened to more accurately reflect the Church’s demographics. The result was a more representative governance structure, but it perhaps also opened those structures to a series of less disciplined and experienced leaders, especially in both Convention and Council. At the same time, the relationship between Council and the staff was dramatically altered with the centralization of executive authority in the DFMS under the office of the Presiding Bishop. The General Convention was kept at arms length from the DFMS staff realignment by the designation. of an Executive Officer.
The advantage gained by having the DFMS handle day-to-day management of Church business is that it allows the General Convention to concentrate on policymaking and the Executive Council to implement those policies. To prevent redundancy and confusion, the Executive Council as the executive body of the corporation connects the General Convention and the DFMS. The simple fact that the constitution of the DFMS is included in the Canons clearly demonstrates, however, that it operates under specific rules, budgets and policies that are adopted by the Church in its privileged capacity as a religious society, in this case, the General Convention.
It may be helpful to think of the Executive Council as the linchpin between the DFMS and the General Convention. As the Board of Directors of the Society, the Executive Council legally controls the finances and property of the Episcopal Church to carry out the missionary endeavors of the Church. The Executive Council acts under the authority of the General Convention but it may, and has, acted beyond their authority and incurred the Convention’s opposition for doing so.
Nonetheless, the formation of Council in 1920 provided the Church with a fairly creative mechanism to effectively carry out the programs and policies adopted by General Convention without turning over authority for basic doctrine, social policy, or mission priorities to a corporation. Recognizing the importance of this new entity, at the last meeting of the Board of Missions, the president remarked, “…you want to be grateful…that the Church has finally found out that a headless body cannot have intelligence, and it has really and indeed created an organization with intelligence and authority to act. ”
VI. Overview of the Financial Structure of the Church
An understanding of the sources of the Church’s revenues and how the Church spends them is critical to the discussio.n about Church governance. In a sense, how the Church stewards its resources says a lot about the success or failure of its governance structures and the decisions they yield.
The following overview is from Committee member Dennis Sullivan, former President of the Church Pension Fund (slightly edited for the context of this Report). A more detailed, four-part examination of the Church’s revenues and expenditures is in the Appendix. For the purpose of this Report, the Committee has focused its attention on TEC finances in contrast to Diocesan or congregational finances
The General Convention adopts a three-year budget for TEC at its triennial gatherings. In July 2012, the Convention approved a total budget for the period 2013 – 2015 of approximately $111.5 million (excluding governmental funds for Episcopal Migration Ministries). This projected level of revenue was down slightly ($2.2 million) from the actual level of income from the previous period (2010- 2012). For the 2013- 2015 Triennium budget, there are four major components of projected revenue:
1. Diocesan Commitments which are projected at a level of$73.5 million or 65.9% of the total;
2. Income from Unrestricted Assets of$25.3 million or 22.7%. In addition, a special appropriation ofUnrestricted Assets in the amount of$4.1 million or 3.7% ofthe total was approved for funding “a revitalized Development Office.” Taken together, the revenue from Unrestricted Assets is$29.4 million or 26.4% ofthe total. Taken together, the income from unrestricted assets and the additional appropriation represents an increase in spending rate from 5.5% in 2010- 2012 to 5.8% in 2013- 2015;
3. Rental Income of$4.0 million or 3.6% of the total; and
4. Program and Event Related Fees of$4.6 million or 4.1% of the total of which $1.2 million is General Convention registration and exhibitor fees. If the revenue portion of the TEC triennium budget is relatively straight-forward, the expenditure side of the budget is not. The budget approved by the General Convention consists ofhundreds of lines of specific appropriations and attempts to summarize expenditures by major categories can quickly devolve into a frustrating exercise in expense allocation. The more detailed analysis found in Appendix summarizes the expenditure side of the budget in two ways. The first and more traditional summary consists of three categories: Canonical, Corporate, and Program (mission). Using these categories, the 2013- 2015 expenditure budget was: Canonical: $20.1 million or 18% of the total budget; Corporate: $34.0 million or 31%; and Program: $58.2 million or 51%.
The second summary revolves around the Five Marks of Mission of the Anglican Communion and two additional categories of Supporting Mission through Local Efforts and Supporting Mission through Anglican, Ecumenical and Interfaith Relations. Using this approach (which was mandated by the 2009 General Convention), the dollar appropriations in millions and the percentage of the total budget for 2013- 2015 are shown below:
|Proclaim the Good News:||16.7 (15.0)|
|Teach, Baptize and Nurture:||4.1 (3.7)|
|Respond to Human Need:||8.3 (7.4)|
|Transform Unjust Structures:||3.8 (3.4)|
|Safeguard and Sustain:||0.5 (0.4)|
|Mission through Local Efforts:||24.3 (21.8)|
|Mission through Anglican etc.:||8.1 (7.3)|
|Mission subtotal:||65.8 (59.0)|
It should be noted that there are a couple of significant line items in the Five Marks of Mission summary (Communications ($9.1 million) and Development ($4.1 million) that might reasonably have been assigned in whole or part to the Administrative category.
VII. How Do We Change Church Structures?
Many of our Church governing structures and processes are imbedded in our Constitution or Canons (or in the Rules of Order of the two legislative bodies, including the Joint Rules of Order, often an overlooked source of governance). The Constitution establishes the General Convention, specifies that each diocese may send no more than four clergy and four lay Deputies and no fewer than two of each, and requires General Convention to meet at least once every three years. The Constitution permits but does not require that Dioceses “be united in Provinces” (Article VII) while Canon l.9 establishes the Provinces and their constituent member Dioceses. Article V of the Constitution sets down the requirements for established new Dioceses, but most of the Church law on Dioceses is found in the Canons (and in diocesan canons).
Yet there are many diocesan-level and congregation-level structures- and opportunities for structures, that are not mentioned in these Church-wide sources of law. Examples are deaneries, summer camps boards, soup kitchen committees, and the scads of organized mission and ministry efforts that energize our Church “on the ground.”
The balance of this section of the Report addresses the processes for amending the Constitution and Canons.
Amending the Constitution. Article XII of the Constitution of The Episcopal Church contains the provisions for amending the Constitution. Constitutional amendments require a two-step process. In step one, the proposed amendment is adopted by simple majority votes by each House at a General Convention (“first reading”) and is sent to the Secretary of the Convention in each Episcopal Diocese, who is to share the proposed amendment with the next Diocesan Convention. In step two, the proposed amendment must be approved at the next General Convention by both Houses (“second reading”), voting as follows.
A. In the House of Bishops, the amendment must be approved “by a majority of all Bishops excluding retired Bishops not present, of the whole number of Bishops entitled to vote”.
B. In the House of Deputies, the proposed amendment must be approved in a vote by orders. In this vote by orders, each order in each Diocese has one vote, and a simple majority in each order is required for passage. In addition, passage requires an affirmative vote in each order by a majority of the Dioceses entitled to representation in the House of Deputies.
The “second” General Convention may not revise the amendment proposed by the “first” General Convention. If at second reading, the proposal is revised by vote of both Houses, it becomes a new first reading, and a third General convention must then approve the revised proposal.
Amending the Canons. Under Canon V.1.1, a canon may be amended at a single General Convention by simple majority votes in each House (unless a vote by orders is duly called).
VIII. Questions and More Questions!
We now revisit the questions posed at the beginning of this Report, and pose some more question to promote further reflection and discernment.
Question One: How do Church structures weigh down our process of proclamation? Are there other things that also weigh it down? What are the implications of cultural shift that make this particularly an issue and what would make it better?
This Report suggests these as follow-on questions and points for pondering:
1. Can we reach consensus about the distribution of funds for governance, administration and mission – consensus both on current distribution and on where the distribution ought to be?
2. Mission, as defined by our budget, allocates substantial – perhaps as much as 50% of its resources to grants to other organizations. Does this align with our Five Marks of Mission?
3. Which social initiatives are core to what we need to be doing in the 21st Century?
4. How do we explain and justify spending such a substantial portion of our budget on governance- however we define “governance”?
5. How can we reform our governance structures in a way that drives mission and ministry success at the diocesan and congregation levels?
Question Two: How does the structure end up teaching the Church how to be a faith community - and, is what the structure teaches, what we want to say as a Church? Is our process of General Convention, Diocesan committees and TEC CCABs instructive to congregations about how to “be church” and is this effective church? Are there other effective ways to make decisions and which also can model something about sharing good news?
1. Does General Convention help to inspire spreading the Gospel of Christ? How, and how well? Or, does it announce our quarrels to the world and show that we are caught up in minutia of regulations?
2. Are we spending our money in a way that reflects our mission?
3. How can we do this in a better way? What methods are being used powerfully and successfully in our current culture that would be useful?
The Committee plans to continue to develop and improve this Report.
Margaret Shannon, Chair
Canon Judith Conley
Prof. Victor Feliberty-Ruberte
The Rt. Rev. Mary Gray-Reeves
The Rev. Dr. Bradley Hauff Thomas A. Little
T. Dennis Sullivan
Appendix 1: Bibliography
Shared Governance- the Polity of The Episcopal Church; the House of Deputies Special Study Committee on Church Governance and Polity; Church Publishing, Inc. 2012.
Many Parts, One Body- How The Episcopal Church Works; James Dator with Jan Nunley; Church Publishing, Inc. 2012.
W(h)ither the National Church- Revisited: Changing Mission Structures of The Episcopal Church; the Rt. Rev. Ian T. Douglas (from What We Shall Become: The Future and Structure of The Episcopal Church, the Rev. Winnie Varghese, ed.); Church Publishing, Inc. 2013.
Note: “Shared Governance” contains a much more extensive bibliography at pp. 105-108.
Appendix 2: Canonical Organizational Structure of the Church
Appendix 3: Structure of General Convention, Executive Council and CCABs
Appendix 4: CCABs
The General Convention 2013-2015 Committees, Commissions, Agencies and Boards
The Executive Council and Committees
The Executive Council
Committee on Anti-Racism
Joint Audit Committee of the Executive Council and the DFMS Committee on Corporate Social Responsibility
Economic Justice Loan Committee
Episcopal News Service Advisory Committee
Committee on Indigenous Ministries
Joint Investment Committee of the Executive Council Committee on Science, Technology and Faith Committee on the Status ofWomen
Standing Commission on Anglican and International Peace with Justice Concerns
Standing Commission on Communication and Information Technology
Standing Commission on Constitution and Canons
Standing Commission on Ecumenical and Interreligious Relations
Standing Commission on Health
Standing Commission on Lifelong Christian Formation and Education
Standing Commission on Liturgy and Music
Standing Commission on Ministry Development
Standing Commission on the Mission and Evangelism of The Episcopal Church
Standing Commission for Small Congregations
Standing Commission on Social Justice and Public Policy Standing Commission on Stewardship and Development Standing Commission on the Structure of the Church Standing ommission on World Missi<.m
Joint Standing Committees
Joint Nominating Committee for the Election of the Presiding Bishop
Joint Standing Committee on Nominations
Joint Standing Committee on Planning and Arrangements
Joint Standing Committee on Program, Budget and Finance
Agencies and Boards
Board of the Archives of the Episcopal Church
Episcopal Church Building Fund Board
Board of Trustees for the Church Pension Fund Episcopal Relief and Development Board of Trustees Forward Movement Publications
General Board of Examining Chaplains
General Theological Seminary Board of Trustees
Board for Transition Ministries
Committees Reporting to the House of Bishops Advisory Council of the Presiding Bishop Committee on Ecclesiology
Committee on Hospitality Committee on Membership Committee on Pastoral Development Planning Committee
Committee on Reconciliation and Mediation Standing Committee on Religious Communities Task Force on Theological Education
Committees Reporting to the House of Deputies Advisory Council of the President of the House of Deputies Committee on the State of the Church
Study Committee on Young Leadership
Committees and Task Forces Reporting to General Convention
Task Force on the Study of Marriage
Task Force on Re-imagining The Episcopal Church
Study Committee on the Rules of Order
Disciplinary Board for Bishops
Court of Review for the Trial of a Bishop
Appendix 5: Dennis Sullivan’s Four-Part Overview ofTEC Finances and Expenditures
Part 1 – Revenues. The General Convention approves a three-year budget for TEC at its triennial gatherings. In July 2012, the Convention approved a total budget for the period 2013-2015 of approximately $111.5 million (excluding governmental funds for Episcopal Migration Ministries). This projected level of income was down slightly from the previous period (2010 to 2012) by approximately $2.2 million.
For the 2013- 2015 Triennium budget, there are four major components of the projected revenue;
1. Diocesan Commitments which are projected at a level of$73.5 million or 65.9% of the total;
2. Income from Unrestricted Assets of$25.3 million or 22.7%. In addition, a special appropriation ofUnrestricted Assets in the amount of$4.1 million or 3.7% of the total was approved for funding “a revitalized Development Office.” Taken together, the investment income from Unrestricted Assets is $29.4 million or 26.4% of the total;
3. Rental Income of$4.0 million or 3.6% of the total; and
4. Program and Event Related Fees of$4.6 million or 4.1% of the total.
There are a number of specific comments that should be noted for each of these categories.
1. Diocesan Commitments. Diocesan Commitments are calculated as a percentage of adjusted Diocesan operating income based on a two-year lag. For example, the amount for 2013 is based on actual, adjusted operating income for 2011. Funding is based on a single percentage or “Asking” of all dioceses. For 2013 – 2015, the Asking is a flat annual rate of 19%, which represents a reduction from the previous Triennium in which the Asking was lowered in steps from 21% in 2010 to 20% in 2011 and 19% in 2012. For a host of reasons, a number of Dioceses do not pay the full Asking. It is estimated that this shortfall represents approximately $8.0 million of potential income.
The projected level of Diocesan Commitments in 2013-2015 is approximately $4.0 million less than the 2010 – 2012 Triennium, which reflects the reduction in the Asking percentage over the previous period and an assumption of a 1% annual decline in Diocesan operating income.
2. Income from Unrestricted Assets. The income from unrestricted investment assets (including appreciation) – also known as the “dividend” – is based on an agreed amount percentage of the average value of the investment portfolio over the five preceding calendar years. (At the time that the current budget was under consideration in 2012, the unrestricted investment portfolio stood at approximately $215.0 million.) The approved annual percentage dividend draw for 2013-2015 is 5.0%, which was down from 5.5% in 2010-2012. As a consequence, the projected income for the current budget is approximately $2.2 million less than the 2010-2012 period.
However, as noted above, in addition to the 5% dividend, the approved budget included a special use of$4.1 million of unrestricted assets to fund “a revitalized Development Office.” The budget did not assume any new income from the work of the Development Office during the Triennium. Taken together, the income from unrestricted assets and the special use actually represents an increase in the dividend draw from 5.5% in 2010-2012 to 5.8% in 2013-2015.
3. Rental Income. Rental income of$4.0 million represents the leasing of3.5 floors of the Church Center building to outside entities. These leases have been signed and result in an increase in rental income of $1.2 million over the previous Triennium.
Since the budget was approved, an additional floor of the Church Center has been leased with annual income of approximately $380,000 beginning in September 2013. The use ofthese funds was not anticipated in the budget and will be determined by the Executive Council. In my mind, these funds represent an excellent potential source of support for TREC.
4. Program and Event Related Fees. Program and Event Related Fees is a catch-all category consisting of a number of revenue sources. The project income of $4.6 million for 2013 – 2015 represents an approximately $700,000 reduction from 2010-2012.
Included in this category is a line for General Convention Income of approximately $1.2 million (consisting of registration and exhibitor fees), which represent a slight increase of$83,000 over the income received in 2010-2012.
Part 2 – Governance Portion of the Budget. If the revenue portion of the TEC triennium budget is relatively straight-forward, the expenditure side of the budget is not. The budget approved by the General Convention consists of hundreds of lines of specific appropriations and attempts to summarize expenditures by major categories can quickly devolve into a frustrating exercise of expense allocation. In this message, I hope to provide you with a fairly generalized look at the expenditure budget and then drill down to attempt to answer the question: ”How much does TEC’s current governance structure at the church-wide level cost?”
As indicated earlier [shown on the power point], the budget for 2013 – 2015 assumed revenue of approximately $111.5 million which is roughly $2.2 million less than received in the 2010-2012 period. Generally, the revenue is received in fairly uniform amounts over the triennium. Expenditures, on the other hand, are somewhat back loaded to the last year of the triennium due to the General Convention and start-up nature of several of the new “block grants.” Overall, the current budget projects total expenditures of $111.5 million, which is approximately $300,000 less than the 2010-2012 period. As a consequence, the 2013-2015 budget is projected to break-even, while the earlier period resulted in a modest surplus of$1.9 million.
The current triennium budget presented summaries of the expenditure in two different formats. The first summary follows the traditional budgetary categories of Canonical, Corporate, and Program (mission).
In attempting to understand these categories, the language of the Budget Resolution is instructive: ”1.1 The Canonical portion, providing for the contingent expenses of the General Convention, the stipend of the Presiding Bishop and the expenses of that office, the expenses of the House of Deputies, and the Church Pension Fund assessments is adopted at a total of$20.125,000.” This represents 18% of the total budget as compared to an appropriation of $22.6 million or 19% of the 2010 – 2012 budget. ·
“1.2 The Corporate portion, providing for the administrative support of the Domestic & Foreign Missionary Society offices, is adopted at a total of$33,997,000.” This represents 31% of the total budget as compare to an appropriation of$38.0 million or 32% of the 2010-2012 budget.
“1.3 The Program (mission) portion, providing for support for the mission and ministry (restricted and unrestricted) of the Church is adopted at a total of$57,394,000.” This represents 51% of the total budget as compared to an appropriation of $58.2 million or 49% of the 2010- 2012 budget.
The Appendices include some graphic presentations on the triennial budget.
The second summary of the budget revolves around the Five Marks of Mission of the Anglican Communion. This approach to the budget was directed by the 2009 General Convention. As a reminder, the Five Marks are: (1) To proclaim the Good News of the Kingdom; (2) To teach, baptize and nurture new believers; (3) To respond to human need by loving service; (4) To seek to transform unjust structures of society; and (5) To strive to safeguard the integrity of creation and sustain and renew the life of the earth. However, the TEC budget does not fit neatly into these five categories and this summary employs four additional categories: (6) Supporting Mission through Local Efforts; (7) Supporting Mission through Anglican, Ecumenical and Interfaith Relations; (8) Governance and (9) Administrative.
The dollar appropriations in millions and the percentage of the total budget for 2013-2015 as compared to 2010-2012 are shown below:
Proclaim the Good News 16.7 (15.0) as compared to 17.5 (15.7)
|Teach, Baptize and Nurture||4.1( 3.7)||3.3 ( 3.0)|
|Respond to Human Need||8.3 ( 7.4)||7.4 ( 6.6)|
|Transform Unjust Structures||3.8 ( 3.4)||2.9 ( 2.6)|
|Safeguard and Sustain||0.5 (· 0.4)||0.0 ( 0.0)|
|Mission through Local Efforts||24.3 ( 21.8)||22.7 (20.3)|
|Mission through Anglican etc.||8.1 ( 7.3)||10.0 ( 8.9)|
|Mission subtotal||65.8 ( 59.0)||63.5 (56.8)|
|Governance||12.8 ( 11.5)||13.0 (11.6)|
|Administrative||32.9 ( 29.5)||35.0 (31.3)|
Total 111.5 (100.0) 111.8 (100.0)
While the use of the Five Marks of Mission and the additional four categories help to unravel the intricacies of the expenditure side of the TEC budget, there is still much to be learned by delving into the specific line items that support each of these categories. For the purposes of this message, I will restrict myself to the Governance category. The major components of the Governance category are:
(1) Portion of the Presiding Bishop’s Office expenses: $1.0 million as compared to $1.2 million in 2010- 2012;
(2) CCABs including TREC: $0.8 million as compared to $1.1 million;
(3) Direct General Convention expenses: $2.3 million as compared to $2.5 million;
(4) Office of the General Convention: $3.7 million as compared to $3.5 million;
(5) Executive Council and support for Provincial Coordination: $1.4 million as compared to $1.9 million;
(6) House of Deputies: $0.8 million as compared to $0.5 million;
(7) Archives: $2.7 million as compared to $2.4 million; and
(8) General Board of Examining Chaplains: $0.2 million as compared to $0.2 million
It can be argued that this summary does not encompass all of the expenditures associated with TEC’s current governance structure at the church-wide level. For example, there are expenditures in support of the House of Bishops which can be found in other sections of the budget. Nevertheless, I hope that this brief summary provides us with a good starting point for our understanding of the expenditure side of the budget
Part 3 – Administrative Portion of the Budget. Part 2 provided some detail with respect to the specific elements of spending that relate directly to the Governance portion of the TEC triennial budget. In Part 3, we focus on the Administrative portion of the budget. As a quick reminder, the $111.5 million TEC triennial budget for 2013-2015 consists of three major elements:
As described in Part 2, the Mission portion of the budget can be further subdivided into seven categories: the Five Marks of Mission of the Anglican Communion along with Mission through Local Efforts and Mission through Anglican, Ecumenical and Interfaith Relations. (As an aside, I have been struck by how much of the overall Mission portion of the budget consists of re granting revenues to any number of Episcopal and other organizations. We describe this phenomenon in Part 4.) In looking at these numbers, there is the challenge of how various expenditures are categorized into the three major components of the budget. For example, the entire budget of DFMS’s Communications Department– $9.1 million ($10.0 million in 2010-2013)- is included under the first of the Five Marks of Mission, “Proclaim the Good News.” If these expenditures were assigned to the Administrative portion of the budget, then Mission would drop from 59.0% of the budget to 50.8% and Administrative would climb to 37.7% of the total. However, for the purposes of this message, I propose to stay with the categories as approved by the General Convention.
The Administrative portion of the budget consists of funding for a series of DFMS departments. They are:
|Chief Operating Officer||$ 1.7 million||$ 1.4 in 2010-2013|
I should note that the expenses associated with the Presiding Bishop’s Office are not assigned to the Administrative portion of the budget, but appear in the Mission and Governance portions of the budget. The bulk of the Administrative expenses are devoted to personnel and office
costs. However, there are four specifics lines in the Administrative portion of the budget that constitute approximately 50% of the total category:
(1) In the Finance section, there is provision for $7.9 million in Debt Service ($6.4 for interest and $1.5 for principal repayment);
(2) In the Human Resources section, there is provision for $1.7 million in retiree medical costs;
(3) In the Legal section, there is provision for $2.0 million for property litigation; and
(4) In the Facilities Management section, there is provision for $4.9 million in building operations.
Part 4- Mission Portion of the Budget. The Mission expenditures portion of TEC’s 2013-2015 budget amounts to $65.8 million or 59.0% of the total budget of$111.5 million. This compares to $63.5 million or 56.8% of the 2010-2013 budget of$111.8 million. As outlined in Part 2, the Mission budget is divided into five subcategories which track the Five Marks of Mission of the Anglican Communion along with two other subcategories: Supporting the Five Marks of Mission through Local Efforts and Supporting the Five Marks of Mission through Anglican, Ecumenical and Interfaith Relations. The dollar appropriations in millions and the percentage of the total budget for 2013-2015 are shown below:
|Proclaim the Good News||16.7||(15.0)|
|Teach, Baptize and Nurture||4.1||(3.7)|
|Respond to Human Needs||8.3||(7.4)|
|Transform Unjust Structures||3.8||. (3.4)|
|Safeguard and Sustain||0.5||(0.4)|
|Mission through Local Efforts||24.3||(21.8)|
|Mission through Anglican etc.||8.1||(7.3)|
While a detail review of the entire Mission Expenditures portion of the budget is beyond the scope of this effort, I will attempt to provide a summary of the major elements of each of these subcategories. The specific elements listed may not add up to the total amount of each subcategory.
Mark 1 of the Five Marks of Mission is: To proclaim the Good News of the Kingdom.
|Office of the Presiding Bishop||$4.1 million|
|Office of the Director of Mission||1.5|
|Block Grant for Starting New Congregations||1.0|
|Block Grant for Mission Enterprise Zones||1.0|
The Office of the Presiding Bishop appropriation includes a budget line of$175,000 for the work of the House of Bishops, which compares to $313,000 for the previous triennium. In addition to the $4.1 million appropriated for the Office of the Presiding Bishop, there is an additional $1.0 million appropriated in the Governance portion of the budget for governance related expenses and the administration of Title IV.
Mark 2 is: To teach, baptize and nurture new believers.
|Office of Formation and Vocation||$2.9 million|
|Campus Ministry Grants||0.3|
|Events & Gatherings (e.g. Episcopal Youth Event)||0.6|
|College of Bishops||0.2|
|Campus Ministry Grants||0.6|
|Block Grant for Strengthening Province IX||1.0|
Mark 3 is: To respond to human need by loving service.
|Episcopal Migration Ministries Non-Government||$1.6 million|
|Office of Mission Personnel||3.6|
|Office of Federal Ministries||1.6|
|Block Grant for Missionary Service for Young People||1.0|
|Dedicated Grant to Episcopal Service Corps||0.2|
|Grant to build capacity for serving Haitian People||0.2|
Mark 4 is: To seek to transform unjust structures of society.
|Offices of Advocacy and Social Justice including OGR||$2.7 million|
|Block Grant for Domestic Poverty networks||1.0|
Mark 5 is: To strive to safeguard the integrity of creation and sustain and renew the life of the earth.
Block Grant for local networks to care for creation $0.5 million
The sixth subcategory of Mission Expenditures is: Supporting the Five Marks of Mission through Local Efforts in The Episcopal Church.
|Office of Congregational and Pastoral Development||$4.0 million|
|Offices of Ethnic Ministries||6.2|
|Grants principally to TEC Dioceses||10.1|
The appropriation of$6.2 million for the Offices of Ethnic Ministries includes a grant of$2.0 million to be allocated to three Historically Black Episcopal Colleges.
The seventh subcategory of Mission Expenditures is: Supporting the Five Marks of Mission through Anglican, Ecumenical and Interfaith Relations.
|Office of Anglican Communion||$2.5 million|
|Grants within Anglican Communion||
|Covenants within Anglican Communion||
|Office of Ecumenical, Interfaith & Global Relations||
|Grant to Episcopal Relief & Development||
As noted earlier, the categorization of expenditures is not an exact science, and reasonable people might disagree on what constitutes Mission, Administrative, and Governance Expenditures. To extend an earlier example, if the expenses ofboth the Communications Department ($9.1 million) and the new Development Office ($4.1 million) were reassigned to Administrative from Mission, the percentage of Mission Expenditures would decrease from
65.8% to 47.2% and Administrative would increase from 29.5% to 41.3% of the total triennium budget.
The Committee hopes that this four-part review of where the Church’s money comes from, and where it goes, will assist ,TREC to make informed decisions in fulfilling the goals set by General Convention in Resolution C095.