How is the amount we are apportioning churches for shared ministry reduced by $900,000?
A: The reduction is a combination of reduced spending and developing new sources of income. The reduced spending includes better efficiencies, budgeting closer to actual expenditures and holding even on several budget items. Our congregations are reducing spending and the GNJ budget will need to do the same. We have already seen that these strategies have produced surpluses in the past and our surplus is at an appropriate level and will grow as appropriate under this new budget but will not be excessive.
There are also new sources of income. The first is the increase in the giving rate from 78% to 87% which has increased our income. Over the last four years the income has increased by more than $500,000 because of the increase to 87%. We anticipate the giving rate to grow to 92% in the next few years.
Another area of new income is through shared services. Our Vital Mission partners are beginning to reimburse GNJ for accounting, administration, office rental, fundraising and communication.
The combination of budget reductions and increased income allows us to reduce the Shared Ministry apportionment by $900,000.
If shared ministry was reduced by $900,000, why did some churches receive an increase in 2018?
A: The shared ministry formula base has not changed from the previous formula so any increases reflected in a church’s 2018 assessment reflects an increase of expenses from the previous year; a marker of increased missional vitality. Churches who are receiving an increase are growing their ministry.
Will we pay 100% General Church apportionments under the new budget plan?
A: Yes. Full payment of apportionments is budgeted for 2018.
What is the basis for the assumptions built into the budget?
A: The Council on Finance and Administration is putting forth five year projected budgets to serve as targets for GNJ so that Shared Ministry apportionments to congregations are reduced by $900,000 to leave more money for congregational mission. It is being done through sources of increased income and budget reductions in a way that does not reduce GNJ mission but continues to grow the mission.
The budget assumptions are based on:
- Past income and spending. For instance, the giving rate on Shared Ministry has gone from 78% to 87% since 2011. We anticipate it will continue to increase to 92% over the next couple of years. Other conferences across the country and the Northeast Jurisdiction have giving rates on apportionments as high as 95% and higher.
- We have begun and will continue to receive more money through shared services.
- We are using greater efficiencies and spending less to save the conference money. For instance, in each department, there are expenses that are not increasing, and we are decreasing. This is a result of better budgeting and spending. We have also experienced some under-spending because people are being good stewards and where this has occurred consistently we are budgeting what the actual history has been. All of this will realize a 5% savings.
It seems the retiree health care costs will decline, how is that happening?
A: Retiree health care benefits are not being reduced, only the contribution from Shared Ministry. This is being projected in future budgets, and each year the Annual Conference will review and approve budgets. CFA put forth five-year projections to serve as targets for GNJ to work toward. Like any target, things change, and so as things change, the five-year budgets will be modified to reflect current realities.
How are we comparing the surplus which has been replenished because some areas historically under-spend be sustained when that under-spending is taken out of the budget?
A: Per Annual Conference legislation in 2015, the GNJ reserve is to be 10% of the Annual Conference approved budget. Because we are making reductions to the budget, the reserve account will be sufficient for the next several years, but if we are not maintaining the 10%, CFA will propose budgets to ensure we maintain 10%. At this point, for several years there will be a surplus because we are reducing the budget.