The 2021 budget is a challenge due to the financial impact of the COVID-19 pandemic on the economy. It was a difficult task to build a budget when all of the churches are shut down and you don’t even know what 2021 is going to look like with no end in sight for the pandemic. The budget committee accepted this challenge by reviewing every request and reviewing every line item of the current budget. The goal was to find areas where savings could be achieved, collaboration could occur and programs could be funded fully, and to meet the strategic initiatives of Diocesan Council and the bishop.
As you read the 2021 budget, you will notice that the numbers presented are close to the actual expenses for prior years. You might notice that things have been eliminated or greatly reduced because diocesan staff has been reviewing every area of spending, renegotiating contracts or eliminating unnecessary expenses. Diocesan staff is being paired up with parishes to reduce the staff expense to the budget for both the diocese and the parish in an effort of collaboration. Additionally, you will discover items that have not been reported in previous budgets. This year, we worked hard to find every expense the diocese incurs and put it into the budget versus directly withdrawing it from an account, thereby reflecting the true draw rate on our endowments.
The main difficulty with the 2021 Convention Budget is not knowing where the income levels will be for the parishes in 2021 and their ability to pay Mission Share. You will notice that we put in a 5% reserve to the Mission Share for 2021 with the belief that there is a good chance that our collection of Mission Share will be reduced. The reality is that it might be greater than 5%. The diocesan staff continues to monitor the 2020 budget and will diligently monitor the 2021 budget and make adjustments if income levels can’t sustain it.
Collaboration is a great part of this budget. Diocesan staff, both clergy and lay, have been paired with parishes or the cathedral which allows us to reduce the compensation side of the budget but also provide greater opportunity to collaborate on practical levels. As the diocese embraces new opportunities for diocesan-wide collaboration we believe it will produce a benefit to the diocese along with the parishes. Parishes that might not have been able to afford a full-time priest now can enjoy the benefit of at least a part-time priest. Clergy have been paired with parishes in Cincinnati, Circleville, Springfield and Columbus. The collaboration with Christ Church Cathedral this year and into 2021 continues with our Operations Executive, Canon for Congregational Vitality as Interim Dean, Facilities Director and Information Technology Director. We are constantly evaluating ways in which the cathedral and bishop’s office can collaborate on projects and personnel to not only benefit the two organizations, but the diocese as a whole. Just a point of clarity that in these collaborations the parish or cathedral pays directly for the cost of their personnel. There is no co-mingling of funds.
Income side of the budget
Mission Share – The 2021 mission share is $2,641,215. This is an increase of $35,420 over 2020. The Budget Committee, along with the recommendation of the diocesan Finance Committee, has reserved 5% of the 2021 mission share allotment due to the belief that income will be down in 2020. The current thinking is that we should potentially lower the percentage to 10 – 20% however, doing so would cause major reductions of staffing. We don’t believe it is necessary to do that at this time and income/expenses will be monitored throughout the fiscal year and adjustments will be made if needed.
The Consolidated Endowment Income Transfer continues to remain at 4.3%. Revenue coming from the William Cooper Procter Fund is being drawn at 4% for 2021. We continue to have various other revenues flow into the overall combined budget for 2021.
Expense side of the budget
The legislative expenses of the budget increased this year over last year. There are two reasons. First, we budgeted convention closer to actual expenses over the past three years. We will wait to see if 2021 will produce an in-person or virtual convention. If virtual, we will realize cost savings. The second reason is that we have a General Convention expense for 2021. At this time, The Episcopal Church has not yet decided if it will be in-person or virtual. The Provincial Synod for 2021 has been changed to virtual, thus eliminating that expense from the budget.
The administrative side of the budget increased due to budgeting our retiree insurance costs closer to their actual expenses based on actuarial study. This was a $25,000 increase over what was budgeted for 2020. There were reductions in line items compared to the previous year in order to bring the budget to zero.
The bishop’s office costs have remained virtually the same with little increases or decreases over 2020. We have some costs savings due to shared administrative staff. The Operations Executive position is a shared position with the cathedral of 50/50.
The Operations Executive line item is reduced this year because she also took on the role of Chief Financial Officer of the diocese. For 2021, 30% of her cost will come from her position as Operations Executive and the other 20% will come from the Chief Financial Officer position.
The Finance Department staffing will see reduced costs due to not having to hire a full-time Chief Financial Officer since this role is being fulfilled by the Operations Executive. The Finance Office did hire the Rev. David Getreu to be the financial liaison to parishes. They increased the role of an accountant on staff. The bookkeeper for diocese was hired through a temporary agency and that expense is now includ-ed within the finance department expenses although it will now be replaced by a staff position.
The Communication Department has gone through a change in 2020 which will be carried forward to 2021. The office will not be replacing the Director position, instead there will be consideration of additional staffing to assist the office. There is a reduction on the salary side but the expense side for operations was increased to cover the cost of the database management system the diocese utilizes.
Information Technology is a shared/collaborative position between the diocese (60%) and the cathedral (40%). Our IT Director shares her time between the two organizations. The IT budget was increased this year due to the realization of the importance of technology, especially living in a world with a pandemic. The Facilities Director is a new section of the budget, previously it was sub-contracted work. The diocese has properties which it must maintain.
The Facilities Director is a shared/collaborative position with the cathedral. The Director spends 70% of his time with the cathedral and 30% with the diocese. We have many structures that are aging and need his expertise.
The National Church Pledge increased this year due to the better than expected 2019 year. The pledge is based upon our income minus $140,000 multiplied by 15% for a total of $471,286.
The budget supports many varied ministries. The Budget Committee worked hard this year to fund budget requests at the level asked. However, there are instances where we needed to make reductions so that the budget would be balanced. The Commission on Congregational Life will be taking the biggest budget cut again this year of over $30,000. Becoming Beloved Community will see an increase as requested. Procter will be funded close to their funding requests. Commission on Ministry will see funding at a level similar to 2020. Campus Ministry will be funded at the same level as last year.
There is another new area to the budget that was not around in 2020. This is called Parish Support. This sec-tion works directly to assist parishes in their administra-tion. The Treasurer’s Workshop will be revamped to Parish Management Webinars which will be spread out through the year with specific topics, for example, financial, com-munications, facilities etc. The hope is to do them through a webinar format so they can be viewed later. There will be some support to assist parishes in setting up proper finan-cial accounting software. This year, we will be working to do building assessments on our churches to determine the physical shape of our structures so the parishes can begin planning how best to maintain their structures. The plan is to also provide Human Resources advice for parish matters that are outside the expertise of personnel at the diocese. The overall budget for the Convention side is $2,894,648 for 2021. The William Cooper Procter side is $2,424,293 and the CEProcter and Other Budget is $393,166 for a total of $5,712,106.