Because of significant revenue declines related to the COVID-19 pandemic, revised budgets for the Presbyterian Church (U.S.A.) for 2021 and 2022 call for millions of dollars less in spending over what had been presented just a month ago – reflecting the lacerating financial impact the pandemic is having across the globe.
The reports suggest the prospect of significant income declines across the PC(USA) continuing over the next several years, with income down about 25% overall in 2020 and 2021.
The proposed budgets call for no General Assembly per capita increase in 2021 and 2022 – a recognition that many congregations are being hard-hit financially by the pandemic and that some may not survive. The proposed per capita rate is $8.95 per member in both 2021 and 2022 – the same as it has been in 2019 and 2020.
A proposed unified budget for the Presbyterian Mission Agency (PMA), the Office of the General Assembly (OGA) and the Administrative Services Group would be $80.1 million for 2021 and $83.4 million for 2022 – down about $10.4 million for 2021 and $9.1 million for 2022 from what had been suggested in April.
The proposals may include some maneuvering room, however. One asks the 2020 General Assembly to give the Committee on the Office of the General Assembly (COGA), the Presbyterian Mission Agency Board (PMAB) and the PC(USA), A Corporation board authority “to amend the various adopted budgets as appropriate to address on-going financial implications of the COVID-19 pandemic and other situations that might emerge,” and to report those amendments to the General Assembly in 2022.
That flexibility would not, however, allow COGA to adjust the General Assembly per capita rate – only the assembly itself can do that.
Those three entities – COGA, PMAB and the A Corporation board – will meet jointly in an online session beginning at 2 p.m. Eastern May 18 to discuss and vote on the proposals.
A support document outlining the financial impact of the pandemic states that a COVID-19 Financial Team, which has been working to analyze the impact of the pandemic on denominational finances, has found that “April income to three lockboxes (individuals, congregations, presbyteries) is down 62% from the same period in 2019.”
INCOME PROJECTIONS
The COVID-19 Financial Team is projecting that “income will decrease by 25% in 2020 and 2021, and by 20% in 2022. However, this plays out differently in the mission budget and in the per capita budgets.
Mission budget: Projections are that income from contributions will decline by 25% in 2020 and 2021, and by 20% in 2022.
Per capita budget: “An increase to the apportionment rate for 2021 is not politically, or economically, feasible,” according to a projections from the PC(USA) COVID-19 Financial Team. “This will lower per capita income by about 10% from the provisional budget approved last month. Further, the uncollectible per capita will increase, which will bring decrease available per capita by 25% in 2020 and 2021. Thus, the overall per capita available in the budget will decrease by about 35%.”
In April – as the breadth of the pandemic was still unfolding – a preliminary proposal was made recommending a General Assembly per capita rate of $9.99 per member for 2021 and $10.50 per member for 2022, compared with $8.95 per member currently.
Unified budget. All of this will have an impact on the unified budget, which funds the Office of the General Assembly (OGA), Presbyterian Mission Agency (PMA) and Administrative Services Group.
“Income from the Foundation endowment funds will be distributed according to the spending formula, which has a built in 18-month lag to smooth out market volatility,” the report states. “Thus, the biggest impact will be felt in 2022. That distribution will see the effect of the market volatility we see now.
“The value of A Corp investments and endowments at the Foundation will likely decline in 2020 and 2021. This will result in a decrease in assets. This is separate from the Foundation distribution formula” used to distribute funds to the Presbyterian Mission Agency.
Overall for the PC(USA), the number of online gifts for 2020 has increased, “but the amount of the gifts is smaller than in 2019,” the report states.
Mid councils “expect their income to decrease,” and about 55% of them had applied for and received a Paycheck Protection Program loan from the Small Business Administration.
Market volatility and the impact on funds held at the Presbyterian Foundation will not be felt until 2022 – so financially for the denomination “COVID-19 is a multi-year challenge.” However, in the first quarter of 2020, the value of the A Corporation investments held at the Foundation decreased by $69 million.
What that shows is that “we can expect a significant decrease in income for 2020, and likely for 2021 as well,” the document states. “The rate of decrease in 2022 may be slightly better, but income from the Foundation will be down. Budgeting will be an ongoing process for the foreseeable future. Periodic adjustments will have to be made during the course of the next few years.”
EXPENSES
Some of what’s not known is whether the decrease in income will be temporary or permanent.
“For 2020, we anticipate enough savings to offset the decline in income,” the report states. “Savings will occur because of no travel, no in person meetings, general underspending, not filling vacancies, and no in person General Assembly. However, other adjustments may become necessary as the year progresses.”
OGA, PMA and the Administrative Services group all will have to adjust their expense budgets in 2021 and 2022. “Reserves may look like an easy quick fix, but the focus must be long term.”
The report also states: “No actions related to personnel at this time.”
The COVID-19 Financial Team also supports the idea of creating “a cross-agency team focused on encouraging giving to all levels of the church. This team will function similarly to the COVID-19 Financial Team, bringing the best knowledge to bear on the challenge at hand.”
The report states that “now and for the foreseeable future the focus needs to be on helping mid councils and congregations come through the COVID-19 crisis in the best way possible. At the national level, energy and efforts should be directed downstream, with more attention paid to congregational vitality, stewardship, and communications with all levels of the denomination. Ignoring organizational boundaries so that we do what is best for the whole church is indicated more than ever, and we should act as a unified whole.”
And the team calls for prayer.
AGENCY BUDGETS
The budgets being proposed for the individual agencies are as follows:
PMA: A revised mission budget of $63.6 million for 2021 and $67.3 million for 2022. In April, the proposal was for a PMA mission budget of $73.3 million for 2021 and $75.3 million for 2022.
PMAB also will be asking the assembly to allocate income realized in 2019 and expected to be generated in 2020 from the John C. Lord and Edmund P. Dwight Funds to support the work of the Presbyterian Mission Agency.
OGA: A revised General Assembly per capita budget of $12.8 million for 2021 and $12.2 million for 2022. In April, the proposal was for a per capita budget of $15.1 million for 2021 and $15 million for 2022. The proposal also calls for arevised designated budget for OGA of $580,317 for 2021 and $563,908 for 2022.
Administrative Services Group: A revised Administrative Services budget of $16.4 million for 2021 and $17.3 million for 2022. In April, the proposal was for an Administrative Services Group budget of $18 million for 2021 and $18.5 million for 2022.
The reports for the May 18 meeting are available at the General Assembly 224 website. Observers can watch a livestream feed of the May 18 meeting – which begins at 2 p.m. Eastern – on either or on the Spirit of GA Facebook page.
