Presbyterian leaders discuss alternate uses for restricted funds

The Coordinating Table met on Zoom on Nov. 11. Photo captured by Leslie Scanlon.

A work group studying the use of restricted funds in the Presbyterian Church (U.S.A.) has determined that the definition of what is “mission” in the church could be expanded to include supporting the ecclesial work of the church — so the money might help fund such things as ecumenical relations or putting on the General Assembly.

And it’s identified seven funds whose restrictions it considers racist or somehow against General Assembly policy — leading to the question of how the use of those funds might be reinterpreted, and whether the denomination needs a policy for when donations will not be accepted “because the restrictions are racist, exclusionary or contrary to stated General Assembly policy,” a report from the Restricted Funds team states.

The work group has determined that about $77,000 in 15 restricted funds (described as the Pink Funds) currently used by the Presbyterian Mission Agency (PMA) could potentially be made available for use by the Office of the General Assembly (OGA). That determination could be significant as OGA is finding it increasingly difficult to fund the work it needs to do through per capita funds alone, and it has been depleting its reserves.

Concerned about the stress the COVID-19 pandemic was placing on churches, the 2020 General Assembly approved a per capita rate of $8.98 per member for 2021 and 2022. This is only three cents greater than the previous two years, and it comes at a time when PC(USA) membership continues to decline.

Kathy Lueckert. Captured by Leslie Scanlon.

“Per capita is not the reliable funding source that it was for many, many years, for a variety of reasons,” said Kathy Lueckert, president of the PC(USA), A Corporation.

Over the past six months, the team has worked to assess restrictions imposed on more than 2,000 funds by Presbyterians who donated money to the church sometimes decades or even centuries ago — reflecting the realities and ethos of the time but not necessarily the work of the church today. That team reported Nov. 11 to a Zoom meeting of the Coordinating Table — a group of 15 denominational leaders looking at budget issues and preparing to draft a unified budget presentation for the 2022 General Assembly.

“You can imagine the Excel document that was shared between us” listing all the funds and their restrictions, said Kerry Rice, deputy stated clerk. Rice also said the use of color terms to describe particular groups of funds (Pink Funds, Blue Funds, Green Funds) has no underlying meaning — those were just the easiest colors to use in Excel to group things together.

The restricted funds generally are held by the Presbyterian Foundation, which invests the assets and, using a spending formula, sends income generated annually primarily to PMA for its use.

Some of the donor restrictions are broad and give a lot of leeway — the money is to. be used “as the General Assembly determines,” for example. Others are much more specific — such as “for work among the lepers and the blind” or to fund a bed at a particular hospital in India.

Kerry Rice. Captured by Leslie Scanlon.

In recent years, most of the restricted funds have been used to support PMA. “This is because, for many years, the income from per capita was sufficient” to fund OGA’s work, but “that is no longer the case,” the report states. “Most restricted funds were given to support ‘mission’ in some form, thus the funds were assigned to the mission agency. However, the boundaries between mission work and ecclesial work are far more permeable now — the distinction is no longer as clear cut as in years past.”

The Restricted Funds team also identified seven funds (the Blue Funds), worth about $5.8 million and generating about $246,500 in income a year, that it says have “problematic restrictions” that are racist or against General Assembly policy.

  • Two funds were “clearly objectionable,” said Barry Creech, PMA’s director of policy, administration and board support, including one “not for work among negroes.” That fund has been used to support diversity, equity and inclusion work in the denomination, and has mostly been spent. Creech also referred to another fund limited to helping “poor white children in the South.”
  • Four funds with a balance of about $1.8 million are restricted for work among “mountaineers in Appalachia” or “white mountaineers.” Presbyterian Historical Society research found there were efforts in the northern branch of the Presbyterian church “to fund work among mountain white people in certain states because they were ‘pure stock.’ It appears to the team that the phrase ‘mountaineers’ is rooted in racism,” the report states. Creech said the language was used to convince Presbyterians in the North to give money in a time of change, “so white American greatness could be restored.”
  • And some money is restricted “for the teaching of fundamentalism” — which apparently contradicts General Assembly policy.

The team identified another group of funds (the Green Funds) with restrictions tied to particular groups — “such as freedmen, Indians, colored people,” the report states. Because Racial Equity and Intercultural Ministries in PMA is using those funds “to support particular constituencies, they were excluded from further analysis,” the report says.

A pamphlet about “the mountain whites” from 1890. Provided in The Convening Table’s report for their Nov. 11 meeting as an example of funds tied to racist ideology.

There’s also been some shifting of funds from the unrestricted to the restricted category, based on an issue raised in the 2020 financial audit. As a result, 86 funds are being moved from the unrestricted to the restricted category because the original gifts were restricted to a particular constituent corporation of the PC(USA). Although, in some cases, the use of those funds was broadly designed.

Overall, those 86 funds total about $31 million in value and generate an annual income of about $1 million annually. So, for 2022, it’s expected PMA will receive $4.6 million in unrestricted income and $8.9 million in restricted funds.

The next steps:

  • The team will work on proposed revisions to the Gift Acceptance Policy that the PC(USA), A Corporation board would consider in 2022.
  • The team will talk to representatives of the Presbyterian Foundation to see what flexibility can be found in how the objectionable Blue Funds can be used — to see if there’s any leeway in the restrictions.
  • On Dec. 9, the Coordinating Table will meet again with Presbyterian minister and consultant Laurie Ferguson serving as a neutral facilitator for that conversation.

The purpose of that consultation: to determine if the Coordinating Table can reach agreement on how the 15 Pink Funds and the 86 funds recently recategorized as restricted should be allocated. In other words, they will discuss how that restricted money should be divided between PMA and OGA.

“We bring in new eyes and a neutral party to help us talk through that,” Lueckert said. The hope: reach as much consensus as possible before work begins on crafting agency budgets for 2023 and 2024 to present to the 2022 General Assembly for its approval.