Working budget to consider pandemic’s financial impact for the PC(USA)

The Presbyterian Mission Agency is attempting to avoid layoffs or curtailing programs for now as it grapples with significant COVID-19-related budget cuts for 2021 and 2022 — with revenue for the national church expected to drop by 25%, or $9.1 million by the end of this year.

Diane Moffett

But the strategies the Presbyterian Mission Agency (PMA) is using to avoid such cuts – including offering early retirement packages and drawing on funds not previously allocated – are not sustainable long term, said Diane Moffett, the agency’s president and executive director.

Going forth, “we believe that vision should drive the budget reductions,” with measurable goals and a clear direction for PMA’s vision of the Presbyterian Church (U.S.A.) being a Matthew 25 church, Moffett told the Presbyterian Mission Agency Board’s Resource Allocation and Stewardship Committee Oct. 7.

“No doubt, critical decisions will need to be made” about what PMA will need to stop doing and do differently, Moffett said. She also said: “Although this is a time of crisis, this is also a great opportunity to critically reflect on who we are and what God is calling us to do.”

The board is being asked at this meeting to approve a working budget for the Presbyterian Mission Agency for 2021 and 2022 that takes into account reductions in revenue expected because of the COVID-19 pandemic. (See the report: A.103 2021 2022 Revised Budget Narrative 100620.)

A budget team working to assess the pandemic’s financial impact is projecting revenue declines for the national level of the denomination of 25% in 2021 and 20% in 2022.

As a result, the General Assembly in June approved a PMA budget that reduced expenses by $8.2 million in 2021 and $6.8 million for 2022, leaving it up to the agency leadership to determine how to cut expenses. The budgets the board is considering at this meeting reflect the reductions in expenses needed to match the reduced amount of revenue in the budgets the assembly already approved.

Some savings are being achieved by not filling vacancies; by not making grants; and by reduced costs for travel and events.

To avoid making deep program cuts, some areas also are drawing on unallocated funds and endowments — basically, tapping into reserves in some way. “Many of these funds had been set aside for long-term program sustainability as part of regular stewardship on how to handle large gifts that come in,” a report to the board states. Although some program areas are drawing on those funds in response to the pandemic, “absorbing a multi-million dollar reduction cannot happen on a regular basis without long-term programmatic impact,” the report states.

The proposal being presented to the board calls for using $12 million in prior year assets in 2021 and $12.4 million in 2021 — mostly accumulated funds from Special Offerings and undesignated restricted gifts, said Denise Hampton, the PC(USA)’s controller.

“What’s going to happen in 2023?” asked board member Rola Al Ashkar.

Rola Al Ashkar

“It’s hard to know what the future will hold” — including how long the pandemic will last, Hampton responded.

PMA also has $17 million in unrestricted reserves, but “there’s policy not to balance the budget with those amounts,” she said. This budget also does not call for using all the Special Offering undesignated funds, so “it’s not wiping everything out.”

Barry Creech, PMA’s director of policy, administration and board support, said work is just beginning to develop a unified budget for 2023 and 2024 for PMA, the Office of the General Assembly and the PC(USA), A Corporation. “We’ve made this budget work,” Creech said. “We could not do it the same way” for 2023 and 2024 if revenues do not significantly rebound.

Comparing giving in 2020 to 2019, contributions to PMA from March through August had dropped 24% — with $15.4 million given in that period in 2019, compared with $11.7 million this year, a decline of more than $3.6 million. Giving to the Presbyterian Church (U.S.A.)’s Special Offerings through August 31 was down more than $2.3 million this year compared with 2019 (A.202 Management Report August 31 2020).

Stony Point Center outside New York, which had to lay off most of its staff last summer and where “almost all guest revenue ceased as a result of the COVID-19 pandemic,” has an operating loss so far this year of more than $1.2 million, the report states.

During a devotional time, Rola Al Ashkar asked members of a board committee to pray for people from around the world in photos submitted by PC(USA) World Mission co-workers.

Other board committees also met Oct. 7 — in what sometimes felt like an exercise in Zoom musical chairs. Here’s other business up consideration — some of it up for votes by the full board before this fall meeting adjourns Oct. 9.

World Mission. Around the globe, the PC(USA) is attempting to respond to the impact of the pandemic — such as in the Persian Gulf and other places where migrant workers have lost their jobs and income, and also been stranded by the pandemic and unable to return home, said Philip Woods, World Mission’s associate director for strategy, program and recruitment.

World Mission also is seeing the number of its staff reduced considerably, as at least 20 of 107 mission co-workers or other staff have accepted early retirement packages, said Sara Lisherness, World Mission’s interim director. That amounts to a significant staff reduction, with the staff in Latin America and the Caribbean most profoundly affected, Lisherness said.

Presbyterian Disaster Assistance. In response to the pandemic, PDA has pulled about $2.7 million from reserves and undesignated funds, using it to make emergency grants. With the help of mid council leaders, PDA opened a process for congregations and new worshipping communities to apply for funds “to address the most vulnerable in their community,” said PDA director Laurie Kraus. Moffett also made available about $600,000 in Matthew 25 funds to assist congregations having trouble paying their bills, Kraus said.

Laurie Kraus

Most of the money went to congregations of color, Indigenous churches and immigrant fellowships, she said. If more money were available, she’d like to see some targeted for technology grants to help congregations that lack resources get stable internet and the equipment they need to worship virtually — that’s “really critical to the health of congregations,” Kraus said.

Although some parts of the country have been hammered by hurricanes and fires, PDA has been “very cautious” about issuing additional specific appeals “given the situation the whole world is facing,” Lisherness said. Despite that, “PDA has a good reputation across the church,” and some Presbyterians have donated, knowing the need, she said. For more information, see E.206 Presbyterian Disaster Assistance 2020 Mid Year Report.

Online child exploitation. Mission Responsibility Through Investment (MRTI) is asking the board to authorize MRTI filing or co-filing  a shareholder resolution that involves a new area of MRTI’s work — an effort to address online sexual exploitation of children (G.102 MRTI re Online Sexual Exploitation).

MRTI is asking for authority to file a a shareholder resolution this year or in 2021 involving an internet and communications technology firm involved with registering .net and .com domain names. Such a company cold have “power and influence” in curbing online child pornography by requiring accountability for domains set up by shell companies or limited liability companies, said Katie Carter, MRTI’s associate for Research, Policy and Information, in a presentation to the board’s Outreach to the World Committee.

The PC(USA) has been involved in trying to curb sexual trafficking and exploitation in the travel, trucking and freight industries, Carter said. But preventing online sexual exploitation of children is gaining even more urgency, especially as more children are spending more time online due to COVID-19, she said.

The board’s Zoom meeting will continue Oct. 8, with discussion of the book “Good White Racist? Confronting Your Role in Racial Injustice.” (Watch the replay of a Presbyterian Outlook “Holy Imagination + Race” webinar with the book’s author, Kerry Connelly.) Also up for discussion: the beginnings of plan to develop a unified budget, and a report from management consultant Marian Vasse on power and privilege dynamics in the way the board operates (P.201 Power and Privilege Report-2).