The Budget Committee began the process of developing the 2023 diocesan budget in late March, when it sent application forms to budget owners – the people responsible for each area of the operating budget – and asked them to use zero-based budgeting to develop their requests. Zero-based budgeting is a process in which each expense is evaluated and projected based on the need for the upcoming year rather than as an adjustment of the previous year’s amount.
Budget applications were due by May 1, and according to the Rev. Canon David Getreu, canon for budget and finance, the amount of funds requested represented an increase of 9.1% over the 2022 budget. The Budget Committee was able to fund 96% of the requests submitted to create an operating budget that provides 12.7% more funds for diocesan programs and operations in 2023.
The 2023 budget funds several new priorities identified by Bishop Smith, including funds for New Episcopal Communities, congregational development, Becoming Beloved Community, and Formation. The 2023 budget supports these key areas of ministry, as well as the search for the Tenth Bishop of Southern Ohio, while anticipating a 5% decrease in mission share contributions from congregations.
The decrease in mission share contributions is projected to continue in future years as congregations continue to adjust to post-COVID realities. While W.C. Procter Fund and endowment income, which are calculated on a 12-quarter rolling average, remains strong, diocesan leaders anticipate that current market volatility will affect the income available from those investments in future budget years. Accordingly, the diocese’s investment advisors have recommended that future draws on the endowment be made at the rate of 3.5% rather than the current 3.75% draw on the W.C. Procter Fund and the current 4% draw on the Endowment Fund, which are included in the 2023 budget.
The 2023 budget also makes use of $1.39 million drawn from various reserve funds and residual accounts. Those funds are detailed on page 1 of the budget spreadsheet. Some of these accounts will be used in their entirety during 2023 and will not be available for the 2024 budget.
The expected decreases in mission share, investment draw, and reserve funds mean that the 2024 budget is expected to be between $150,000 and $200,000 less than the 2023 budget.