When money is tight, there are only 2 options – cut back expenditure, or find additional sources of income.
For the Sydney Diocese, money has never been tighter. The losses incurred in the GFC continue to rumble down the pipe-line. Until now, the response has been to cut back. And that’s been exactly the right thing to do – central activities can be important, but they are not the front line.
The current proposal is to stop cutting back, and to find more income, and there is only one place that can come from – taxing the parishes.
It’s included in a document you can read here, for the pre-Synod briefings this week (the particular report starts on p. 83).
It looks harmless enough – a suggestion for a set of new principles for the Diocesan budget. What stands out is the fact that 2 groups of costs are to be shifted away from being covered by central income, and onto the parishes.
One calculation suggests this could amount to $2-2.5M!
The reasoning for this shift is unconvincing.
Although it’s not argued for in any detail, there are a couple of hints that the basis of shifting these costs to the parishes is the fact that they are necessary for us as a Diocese. But that’s not a reason, it’s a logical leap, a fallacy – the fact that they are necessary simply means they should be the first expenditures we make (from funds available to the Synod from the Diocesan endowment), not that the parishes should pay.
If we had no central funds available at all, then it would make sense that the parishes should bear the cost. But we still do have central funds – not as much as previously – but still nearly $5M in 2012 for the Synod, and more from the Endowment of the See (the Fund that currently pays for the bishops).
The only legitimate argument that the parishes should pay is that the particular item of central expenditure is more important than front line parish ministry.
So here’s the thing – our conviction (up til now) has been that the parishes are the centre of the Diocese. It’s front line ministry that matters most. We don’t hold the view of other Dioceses, who see great significance in the office of bishop, a central bureaucracy etc. Our commitment is to evangelism, preaching, prayer, pastoring, the local church in missional mode.
If this proposal is adopted, what we’ll be saying is that to the tune of around $2M, front line ministry is less important than centralised programs.
Surely we can’t say that?
Andrew..I remember a previous Synod where the head of Anglicare stood up and shared their needs and spoke about having short arms and deep pockets. Someone came up to him later and said…I am selling a block of flats…I will give you some of my profits from this – which equated to a large amount.
I’m reminded of a time a consultant walked into a charity org leadership meeting, who had invited him to come and talk to them about how they could raise the funds they needed…the consultant looked at them and said… the money you need is already here in your pockets…you don’t need me. lol! 😦 Within 1/2 an hour they had committed to all that was needed.
I find it interesting that the bulk of Synod is made up of very wealthy people and many of them sit in places of leadership. (Not talking about clergy)…within that framework of giving – it would take 10 people to give 200k each… Now I am sure there are more than 10 wealthy people sitting in a chair at Synod who drive cars and own boats that are worth that much…
Thanks for the link Andrew – an interesting read. From a first glance, I found a few things interesting:
– MT&D has had 29K taken out of its budget for 2012.
– SDS had grown by 45K for its budget for 2012.
– There is a line item known as ‘Work Outside the Diocese’. I’m curious as to why this is a crucial Diocesan expense? I.e., what is it?
Also of interest, is a search for ‘icon’ in the document. It appears once with reference to a possible reason why people didn’t want to sell Bishopscourt, but should. It appears once with reference to St. Andrews House and why we should keep it. And it appears once with reference to buyers who are interested in ‘iconic’ properties. Now, this is a little facetious, but one wonders whether the authors of the report could convince the properties buyers to purchase St. Andrew’s House, if it is so iconic!
Can I ask a question – in your opinion, do you think that MTC could absorb the role of MT&D, thereby saving $370K from 2012 onward?
Blessings,
Mark
Andrew, thanks for putting this out here. Important to discuss.
As Craig is suggesting, I think, we will need to try and surround the discussion with an atmosphere of generosity.
That said, I know for a fact from last year’s Synod that several individual Synod members paid the one-off “we won’t sell Bishopscourt” levy of 1% and a bit for the Endowment of the See on behalf of poorer parishes. I am proud (hopefully in the right sense) that the parish I serve decided to pay the levy for another smaller and less financially well off parish in our mission area. So that’s encouraging.
I reckon we do need very careful thought about the proposed funding principles for 2013-2015 that Andrew mentions.
It’s good to go back to first principles and try to say which expenses should most naturally be paid out of which buckets.
But it’s just as important, if not more so, to discuss whether every cost proposed to be shifted onto the parishes for the centrally funded activities is more important than local front line activities.
We can be certain that it will be an interesting Synod this year!
Well said Katay.
So here’s the thing – our conviction (up til now) has been that the parishes are the centre of the Diocese.
EggsACTly.
@Mark – I should have highlighted that the proposal in the linked document is for budgets in 2013-15, not 2012. The idea now – and it is a good one – is to set the principles now, and then apply them later, to smooth the process.
Normally I’m a principle => application guy; but sometimes, the principles lead to such bad applications, that you need to see the application up front.
But my main point here is that I don’t think the logic flows – necessity does not equal parishes pay; it means it is the first paid from any source.
@Sandy – completely agree about a spirit of generosity. And I think you’ve hot the nail on the head is saying that the key issue is the relative priority of centrally funded activities vis-a-vis local front line activities.
If we can have the discussion, and come to a common mind on it, then I think it will make the budget process a lot easier.
(A copy of a comment from Facebook)
Hi Craig,
I think you raise a good question about what it means to think of the Diocese in terms of the body of Christ. Sandy Grant makes a good point in a comment on the blog about how that worked out in his context.
The complicating factor here is the nature of Diocesan finances. 4 sources of income (Endowment of the See – pays for the Bishops; Diocesan Endowment – pays for Synod expenditure; other income from various ordinances; and parishes – currently just reimbursing the Diocese for out of pocket expenditures). And of those, the Endowments are investment funds that earn income, some of which is added to the capital, some of which is made available to be spent. And investments markets have been pretty up and down for a while! And in those funds, some of the assets are worth a lot (Bishopscourt) but aren’t earning any income at all (in fact, cost around $1M each year to keep!
That said, it’s actually a bit easier than it seems. The central funds available (apart from the parishes) still come to around $5M per year. The question is, is any Diocesan activity beyond the $5M spend more important that front line parish ministry?
Mike Jensen writes
I am not underestimating the seriousness of this conversation. However, I think you a putting a bit of a false dichotomy. That is: we do a heck of a lot of front line parish ministry: 250+ centres, all over Sydney. It’s the main game. It’s what we exist for. But some parish ministry IS worth sacrificing in order to promote diocesan activities which actually enable the parishes to do their work more effectively. I would argue that the quality of service we have received from the centre has made being an Anglican parish far easier than being say, a Baptist one, in many instances.
So, when you put the question this way: ‘is any Diocesan activity beyond the $5M spend more important than front line parish ministry?’ that isn’t the right way to put it. The question should be rather ‘ is any Diocesan activity beyond the $5M spend more important than any front line parish ministry?’ Answer: yes.
Or, I should say: the answer isn’t so obviously a collision of principles and is more a matter of case by case discernment.
Mike,
thanks for clarifying the question – and I agree that the center is super important.
For the issue is – should the center learn to live within its means, rather than expand (or stay expanded from former, better days) at the expense of parish ministry.
In economics, this is called the issue of the margin – marginal cost, marginal benefit – that is, is the last thing to be added to the Diocesan expenditure (beyond the $5M spend) a relative benefit compared to the cost of stopping doing the first things that parishes will have to stop doing to fund that Diocesan expenditure?
At least, that’s the case that has to be made.
Do you think it can?
(Off line now for a couple of hours in a meeting)
Michael made the comment on facebook he thought he might have to be looking for a job. I replied that was hard to get the tone of his brief first comment, but it’s worth saying that increased costs to parishes may also mean graduates of the college don’t get jobs.
I guess the rectors are just about the most secure of the lot in relative terms, certainly more so than assistant ministers or college lecturers, I guess, so we will need great care in how our input into decisions at Synod impact brothers and sisters in financially dependent ministries.
Well, I was teasing. But still: we are all feeling the pinch and it is mega serious.
You can sponsor me to keep the college going here:
http://www.everydayhero.com.au/michael_jensen_1
Across the board taxes are such blunt instruments, that there undoubtedly would be parishes who can manage it, and those who will be cutting back frontline ministry staff.
Two thoughts..
I would like to see an element of assessing stewardship of resources being taken into account by those parts of the diocese seeking funding. Would it not be reasonable to say to any part of the diocese seeking funding (eg. Moore College) if you own real estate that you have left unused for over 10 years you should rationalise/sell that before we will tax parishes to give you more money?
Secondly, just as we are seeking to lift the performance of parishes through initiatives such as mission areas, would it not be reasonable to have performance reviews for SDS staff and the episcopal team. If cuts are being made, they need to be targetted, not haphazard across the board decisions.
There is a common saying: There is no mission without margin.
Sandy said:
“it’s worth saying that increased costs to parishes may also mean graduates of the college don’t get jobs”
I think this has already happened in 2011, and will continue to be hard in future years. The only way we can maintain or continue to grow numbers at the ‘front line’ is to encourage people to be more generous and dig deeper in our own pockets. No doubt this is already happening, but an added impost on the parishes will hit this even more.
I am wondering why, for example, we insist on maintaining 5 regional bishops (even without corresponding archdeacons)? And while I value the work of Moore college greatly, the question remains: should we be giving over $1.5 million there?
1. We only have 4 regional bishops and no plans to find a 5th at the moment. The existing ones have reduced their expenditure in terms of cars, secretarial staff and so on, and archdeacons. Different people have different appraisals of the value that they add. Worth a discussion.
2. Richard: perhaps Moore should be moving to complete financial independence. Other Colleges seem to do this. But it can only do this if parishes who value its service chip in. One way we do this is say ‘no tax’, but parishes would still need to pay for the services that they get – ie, the best training for evangelical ministry that money can buy. That could arguably be more expensive than a tax, because not every parish is going to want to support Moore. We have had severe reductions in funding over the last two years, and have laid off lecturers like David Peterson and Barry Webb and Paul Barnett (all of whom retired) as well as staff. It’s not going to stop there either, unless we can find funding from elsewhere. Got any suggestions for who you’d sack next?
Maybe they just need to go a few steps further – realizing that ‘they’ will in fact be ‘we’…
We… could sell under performing parish property and close those parishes – those plateaud or declining with little chance of growth. Means losing a few ministry positions, though also possibly bulking up existing parishes with new members – a little. To make it work the money would need to go to the Diocese – rather than bulking up parish coffers. For example my parish has little chance of surviving long term – a new tax will make that process a little faster (and BTW Rectors jobs are only secure when you have dispensable assistants and sufficient income!) – but we have a little over a million in land value excluding the church building itself a couple of houses. We have two Anglican Churches 10 minutes away. The fact that we’re the only Protestant Church in a township that is isolated by geography and mentality makes no difference to those who leave the town to attend bigger churches already. So why not change the regulations and allow the Diocese to rationalize all under-performing property (not just Moore’s extra buildings). I’m pretty sure there are a good few churches that could be closed will little impact on effective front line ministry. I can think of at least one other where 2 churches should in fact be amalgamated – but history and selfishness prevents it. Why not allow the Diocese the power to do that work? Certainly it’s not without it’s pain – but if we are aiming to be good stewards? Inseam to recall Archbishop Mowll (?) aiming for churches no more than 15min walk from every house… What’s the equivalent for 2011/2012?
Why not move Moore from prime real estate to a greenfield site? No doubt everyone will say it’s too great an upheaval or that the link to Sydney Uni is too important? Maybe that really doesn’t matter – certainly makes no difference to me. I guess it’s possible that the sale and move would not result in a windfall. Someone will know these things.
I’m still of the opinion that selling Bishopscourt makes sense – though we may have missed the boat on getting an appropriate price. It would be interesting to see if there are prospective buyers and what the final actual price would be – not entirely convinced by the projections we were given in Synod. Neither was the bulk of Synod I guess.
If we’re saying the principle is “user pays” and that we should live “within our means” then why not get all the parishes with significant deposits in the Glebe, who are using the interest to fund ministry that they can’t afford from offertories or other investments (rental property) and reallocate that money to the Diocese. The total amount would dwarf the 2-2.3 mill tax – and extra that is not needed under the current tax regime could be funneled where it’s most needed. As Dave Clark says – performance reviews all round – put the money where it will benefit front line ministry across the Diocese. Of course we may not actually believe in the user pays system nor in living within our means.
None of these are new idea – just musing… some would say they are impossible – that parishes won’t give up their autonomy – and Rectors would have to vote to lose power – just as we would for Andrews thoughts regarding the ending of tenure. Would it be an act of generosity for parishes with huge sums in investments to willingly support the diocesan need rather than being forced (having the investments reallocated)? Guess so.
David Cole said
“Would it be an act of generosity for parishes with huge sums in investments to willingly support the diocesan need..”
I suspect we are likely to see Jesus return before this is going to happen. 🙂
Yep – guess that might have been my point. Having said that my previous parish and had a very large amount in the Glebe. We needed some to build and renovate, and the interest to pay staff for a few years, but by the time I finished there we had reached the point where we could afford the staff using offertories and rental property income and had built a new rectory and renovated the churches as needed, and still had $600K or more available. The parish could have gone on at that point without the money in the Glebe – without too much pain. It’s nice to have the cash – but maybe there is better uses elsewhere. Maybe that’s where a review process would have some real value – outside and objective help in assessing the real needs of a parish, looking at buildings, property, staff and ministry opportunities, realistic future needs and so on and then assessing whether the parish needs all the cash is has in investments.
As you said – maybe Jesus can implement such a plan when he gets here and we might willingly follow? 🙂
@ Michael Jensen -are you up to doing 42km every week? You could become a self funded lecturer!
Good idea!
Just to clarify some things in the discussion btw.
1) Moore has no unused buildings at the moment. All are either generating funds or being used directly in the ministry.
2) Actually, up to 4 of our faculty are funded externally by individual endowments – in Women’s Ministry, Ethics and in Mission. It’s not a bad way to do it, but lay people tend to find practical stuff sexier.
3) We spent several years contemplating the ‘greenfield site’ option with all the funding issues involved from 2002-7 or so. For whatever reason, it was not as financially viable or practical as it looked.
4) That is my issue with selling Bishopscourt, too: it has a notional ‘value’, but I have no conviction at all that we will get that value for it – especially since we halved the ground on which it stands in order to turn a profit and actually made a loss. So it looks like an easy equation, but it isn’t.
@ Michael -please correct me if I am wrong, but my impressing was that 30, 32, 34 and 36 Carillon Ave Newtown has been left unused/vacant for 20 + years. I am sure a developer would be happy to offer the college good money for that land if the college has no use for it.
Ah, good point. It’s only right next door to where I live!
That area of land is part of the college’s plan for building, has certainly featured in land-swap discussions, and so on.
It’s a little more difficult to fill than, say, Propert’s, which is now being rented to someone else. It lies in the centre of the college’s property, and is undeveloped (as you say), so you can’t simply lease it out. Still: worth thinking about.
Isnt a tax just shifting the goalposts? There’s no net new revenue made here
We need to encourage disciples to be generous givers, but more importantly make more disciples so that they can also be generous givers. Through God’s power.
That will help raise revenue!