Understanding the 2017 Budget

Each year the budget process begins with the establishment of the Budget Committee. The committee consists of nine members; three are elected at convention, Diocesan Council appoints three, and three are appointed by the bishop. The committee meets in December and develops a planning calendar for the year.

The budget process can be broken into a five-step process that includes: planning, preparation, adoption, implementation and evaluation. The process is driven by the application and the underlying ministry priorities.

2017 TIMELINE:

February 2016 – instructions for completing the 2017 budget application are posted on the website

April 8, 2016 – all budget requests and submissions are due

April 26, 2016 – Budget committee meets, budget assignments to committee members. Diocesan financial officer presents initial estimates on financial resources available for the upcoming fiscal year.

April – June – Budget committee works with budget applicants.

June 9, 2016 – Budget committee meets. Each member reports on finding from evaluations of budget applications and submits a recommendation about funding. The Committee then compiles all of its findings.

August 11, 2016 – Committee meets to review addition comments and balance the budget

September 10, 2016 – Budget committee presents budget to Diocesan Council.

BUDGET COMMITTEE GOALS

Each year the budget committee adopts goals. The first goal is to end the budget process with a balanced budget. Another is to be an advocate for the budget they are evaluating. The policy choices the budget committee must make represent a balance between meeting the ministry priorities and the mission share, which provides the necessary financial support. The human and financial resources are allocated in the budget to achieve the ministry priorities of the diocese; the budget thus reflects the allocation of revenue and expenditures to support the ministry priorities of the diocese. It is a delicate balance.

BUDGET ADOPTION

The budgets of the diocese for the next year are proposed at a Diocesan Council meeting in September. In October, pre-convention meetings are held to hear input on the budget.

INTRODUCTION OF THE CONSOLIDATED BUDGET

Totaling just over $5.6 million, the consolidated operating budget of the Diocese of Southern Ohio implements programs, launches mission and provides services afforded from multiple funding sources. The budget is required by Canon and is used as a

guiding resource as the bishop’s staff completes the work of the diocese. It is presented in two sections: Sources (revenues) and Uses (expenses). The purpose of a consolidated budget is to provide a spending plan for diocesan leadership and show the highest standard of accountability and transparency to our congregations.

OPERATING REVENUE BUDGET

Diocesan operating revenue is comprised of several sources. The two main sources of revenue are Congregational Mission Share and a portion of the William Cooper Procter Fund used for operating expenses.

Mission Share is the contribution from congregations. A new formula for Mission Share for the next five-year cycle will be adopted at the November 2016 convention. The Mission Share formula uses congregational income and expenses to rank each church and determine the percentage/ mission share rate that congregation will pay. Actual income in 2017 will be realized based on congregations’ actual income and the rate that is assigned based on the formula.

Income from investments and the William Cooper Procter Fund have begun to increase over the last several years. Economic conditions nationwide are impacting investment income, which have resulted in these increases. The Procter Fund is able to contribute $2,394,726 to the consolidated diocesan operating budget. But only $622,000 of that amount is considered impacting the Congregational Mission Share budget; the majority of the William Cooper Procter funds is restricted by the trust and only passes through the operating budget.

Pie chartIn addition, this budget also receives a portion of its funding from grants and payments from other diocesan endowments. Most notably, the Charlotte E. Procter Fund fully pays the bishop’s salary. Other diocesan activities, such as Faith in Life (FIL), Minority Empowerment Initiative Trust (MEIT), public school summer reading programs and others, self-fund their operations but are run through the operating budget. Fee income from the summer youth program and rental income from facilities is also reported in this budget.

Income from other endowments is included in the operating budget. The estimate for 2016 is slightly higher than estimated for 2015. No consideration is given for realized gains.

MISSION SHARE BUDGET

This budget is based on the proposed mission share formula for 2017. The formula ranks each congregation based on two criteria: operating income and operating expenses as defined by the parochial report. Each congregation’s ratios are based on dividing their income/expense by the total income/expense of all congregations. A congregation’s Share Ratio is based on the average of the two ratios.

a) The congregation with the smallest Share Ratio will be assessed at rate of 6% of current normal Operating Income

b) The congregation with the Share Ratio closest to average Share Ratio will be assessed at rate of 11.5% of current normal Operating Income

c) All other congregations will be assessed at rate defined by Share Ratio order on a straight line connecting the congregations found in a) and b) above.

Mission Share Rate Chart

OPERATING EXPENDITURE BUDGET

The diocesan expenditure budget provides the resources for the canonical requirements of our common ministry. Though this budget we fund the compensation of our bishop and diocesan staff, the work of the diocesan office and support of other administrative functions, such as publication of our news magazine Connections.

Through this budget we also fund and support mission congregations of the diocese, college work, diocesan support and outreach ministries and cooperative projects developed by our churches working in concert with one another. Another way to say it: Where does the money go or what does it pay for?

1. The Bishop and staff.

To be an Episcopal Church means we have a bishop. The mission share pays for the salary and benefits of the staff. Our diocese is fortunate that the bishop’s salary is funded by the C. E. Procter fund. Only the pension and other benefit costs are paid using mission share resources. The bishop provides spiritual leadership, guidance, and vision. But he can’t do it alone. His staff takes care of the many operational responsibilities from forms, contracts, certificates, receipts, billings, visitation scheduling, story interviews and producing the Connections. He needs people to work with churches that are searching for a new priest. He needs people to run the Procter Center and to work with the youth of the diocese.

2. Congregational staff support.

The bishop’s staff answers your questions, helps churches find clergy, leads churches through discussions to know who they are and what role they play in their communities, assists in facility audits, provides loans, updates website, archival research, youth ministry support, clergy and lay formation, helps churches to vision, and provides a safe and wonderful time and experience at summer camp. The staff is available to meet with congregations and assist in many additional areas.

3. Diocesan office operations.

Basic operating expense to run the administrative work. Computer servers, utilities, copiers, paper, telephones, computers, and Internet are a few items in this area. Through our telephone company we have a toll free number so congregations can contact us more easily. In addition, congregations may use the diocesan conference call service for their church meetings.

4. Meetings. Lots of meetings.

We have a number of committees that work throughout the year on your behalf and enable your church’s ministry. Some of them, you’ve elected, some of them have been appointed by the bishop. The meeting expenses for the various committees cover the travel expenses for members and food for the meetings.

5. We are a part of the church.

Called the Domestic and Foreign Missionary Society, our diocese supports the work of the church at large. Each diocese is asked to pay 18% of its operating income (minus $150,000) which goes to help fund programs and people on a national level, such as missionaries, college work, Native American Ministries, stewardship, and congregational development to name a few. The 2017 proposed budget pays 18% and meets its national church obligation.

6. The Province assessment.

Provinces are geographic areas of the church. We are in Province 5 (Ohio, Michigan, Indiana, and Illinois). We meet together and share resources when possible since we are “neighbors.” The province determines how much we pay in assessment. This assessment has increased over the last several years.

7. Audit fees.

The financial records of this diocese are very complicated. The diocese oversees the financial operations of 10 ‘companies’. Some of these companies are separately incorporated entities outside of the diocese. They are associated with the diocese but not affiliated with the diocese. Just as churches are canonically required to be audited, dioceses also are canonically required to be audited as well. Our diocese is audited by a CPA firm and we pay significant fees for the audit. Each year the diocese has received a ‘clean’ audit. The last two years there have been no management comments and no adjusting entries performed by the auditors.

8. Building expenses.

The Diocesan Office building has regular maintenance and operating expense such as utilities, snow removal, elevator repair, contracted cleaning and city code requirements. The diocesan property manager oversees this building and others and secures bids for work and works with a cadre of facility professionals to ensure good stewardship of our real property.

9. Congregational grants.

The budget includes resources for congregations to expand local ministry work. Campus ministry provides churches in ‘college towns’ resources to partner with colleges or establish their own campus ministry programs. National and World Mission provides grants to congregations who have their own or partner with other agencies in domestic and foreign mission work. Commission on Congregational Life (COCL) provides funding to congregations to support existing and new ministry work in their congregations. COCL is expanding its role and working with churches to reimagine who they are and what they can be.

10. Procter Center.

Part of the mission share pays for the Camp Director and other staff to operate the summer camp and to work with groups that use the center. More detail will be shared how this portion of the budget will be transferred to the Procter Center directly.

STAFFING

The 2017 expenditure budget contains two fewer positions than that of the 2016 year. With the elimination of the Canon for Mission position, and the resignation and non-replacement of the Missioner for Campus Ministry position, the number of full-time staff is now 17. This number includes 13 staff and 3 missioners.

Year 2017 2016 2015
Bishop 1 1 1
Staff 13 14 14
Missioners 3 4 3
Total 17 19 18

Diocesan staff are paid from various funding sources. The main source is the Mission Share. This diocese is blessed to have an endowment that pays for the bishop’s salary; the Charlotte Elizabeth Procter endowment was established in January 1934 and has paid the salary of the bishop since that date. The final funding source is the William Cooper Procter Fund. New initiatives outside of regular diocesan operating activities that meet one of the four criteria established by Mr. Procter may be eligible for funding. Programs like Brendan’s Crossing, Fresh Expressions and Congregational Vitality meet these criteria.

Year 2017 2016 2015
CE Procter 1 1 1
Mission Share 12 13.5 13.5
WC Procter 4 4.5 3.5
Total 17 19 18

Staffing for the diocesan budget will further decrease in 2017. The two positions currently identified as Director of Youth, Young Adult and summer camping ministries and Assistant Director of Youth, Young Adult and Summer Camping ministries have been assigned to the Procter Center and will now become a part of the Procter Center programs and operations. Funding for the youth department and summer camp will be part of the diocesan budget but transferred to the Procter Center.

YOUTH, YOUNG ADULT AND SUMMER CAMPING PROGRAM

This program has been a part of the diocesan budget for many years. It has changed and grown under various directors. Beginning in 2016 with the hiring of a new director at the Procter Center, the bishop, in consultation with the Procter Center board, has moved the staff and operations of this program to the Procter Center.

The Procter Center has been the center of diocesan formation for decades. Moving this vital aspect of formation to the Procter Center to oversee and develop would help correlate many formation offerings under one heading.

In 2017 the funding and expenses will all move to the Procter Center budget. How does this impact the consolidated diocesan operating budget? The budget committee has determined what people and programs operated out of the consolidated budget. The cost of these people and programs will continue to be funded from the consolidated budget, but those funds will be transferred annually to the Procter Center. The Procter Center will annually submit a budget request for funding from the consolidated operating budget. The youth, young adult and summer camping program receives funds from both Mission Share and the William Cooper Procter Fund.

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BUDGET RESOURCES

The full proposed 2017 budget for the Diocese of Southern Ohio can be found online at our convention webpage. If you do not have Internet access and would like a print copy, please contact the Finance office at 800.582.1712.