Some warned that donors, if they got angry enough, would bypass the denomination altogether to give money directly to causes they support.
Now, after conversations with many of the critics and with revision, the idea is back. If approved, the new fee is expected to free up $900,000 in unrestricted funds for the PC(USA) in 2005. Research showed the practice of charging administrative fees to restricted gifts ‘is common among charitable organizations and that 5 percent is a reasonable amount,” a report to the council states.
But there have been changes to the original proposal, which seem to have muted the unhappiness from two main sources: the Presbyterian seminaries and the three validated mission support groups that help raise money for Presbyterian mission work.
Even the title has been changed. Instead of being called an “administrative fee,” it’s now being described as a “contribution to shared mission costs.”
And why is this happening?
In part, it’s because the denomination is definitely feeling the impact of broad, ongoing funding shifts. For example, Extra Commitment Opportunity giving — money that comes to the PC(USA) designated for particular projects or work — increased nearly 44 percent from 1995 through 2002. Today, 70 percent of the denomination’s budget is restricted — only about $36 million of the $128 million budget comes in unrestricted money.
Shared mission support has taken a hit. Unrestricted giving to support the basic mission work of the PC(USA) came in at $15.3 million for 2003, less than what had been budgeted and down 7 percent from 2002. According to Nagy Tawfik, the denomination’s controller, 15 of the 16 synods gave less in shared mission support giving last year than in 2002 — all but Covenant Synod. “We continue to hear that the problem is the economy,” Tawfik said. (Restricted giving to the mission budget dropped a little too, as did giving to churchwide special offerings.)
Denominational leaders have been working hard to encourage Presbyterians to give to shared mission support — intentionally visiting in recent months 34 of the 40 presbyteries that have been giving the most, to say “thank you” and to explore ways to deepen the partnership between the denomination and local congregations, said Kathy Lueckert, the council’s deputy director.
So money is scarce. And John Detterick, the council’s executive director, has argued that charging an administrative fee is needed to recover some of the costs the denomination incurs for services such as such as insurance, accounting and legal work.
On Feb. 11, the revised fee proposal was approved by the council’s Mission Support Services Committee; it will come up before the full council later this week.
But it appears that the changes Detterick made — some of the compromises struck — have made the idea more acceptable, although not everyone’s on board.
Phil Butin, the president of San Francisco Seminary and a corresponding member representing the Committee on Theological Education, told the council that “we’re OK with the agreement that has been reached.”
The Theological Education Fund, which the General Assembly established in 1986, is the only source of undesignated giving to PC(USA) seminaries; the seminaries get no money directly from the denomination’s undesignated budget. Already, the Theological Education Fund pays a .7 percent administrative fee from the money it receives to the denomination and also pays for promotional and office staff support.
The new arrangement puts a 5 percent cap on the administrative fee that would be imposed — and would count toward that contributions the Theological Education Fund already is making, according to Joey Bailey, the PC(USA)’s chief financial officer. So, if the fee had been in place this year, it would have cost only $16,000 more than what the theological fund already pays the denomination, or about $2,000 per seminary.
In September, David Hackett of Presbyterian Frontier Fellowship, one of the three validated mission support groups, called the administrative fee proposal “appalling and draconian.” But the new plan calls for a 1 percent limit on the fee to the validated groups — Frontier Fellowship, along with the Medical Benevolence Foundation and the Outreach Foundation. Some of those groups charge their own administrative fees for the funds they collect. And so far, at this meeting, those groups — which raised a tremendous fuss the last time around — have been quiet.
The new proposal also allows Presbyterian Disaster Assistance, which accepts contributions to respond to earthquakes and floods and famines and other crises around the world, to pay a contribution to administrative expenses only until the revenues of the disaster program reach the average the agency received for the previous five years. That allows the disaster agency to operate with a “rolling average,” recognizing that the money it brings in can vary dramatically from year to year, depending on where and how severely disaster strikes.
Neal Presa, the council’s vice-chair, did raise some concerns in the committee, mostly that while the seminaries and validated mission groups had been involved in the discussions, the staff of some of the denomination’s programs that will be affected were not consulted directly. “These folks are just as much partners in mission” as groups that have been “vociferous” in protest, Presa said.
But Detterick responded that the directors from each of the ministry divisions were consulted about the revised proposal, and that it’s been “common knowledge,” given the outcry last fall, that the matter was being discussed.
