Committees recommend planning for a reduced 10% diocesan assessment rate by 2033

[Episcopal News Service] The 15% assessment on diocesan revenue is The Episcopal Church’s largest source of funding in the churchwide budget, more than $30 million a year. Six dioceses have asked General Convention to gradually reduce the rate to 10%. Now, those six resolutions have been consolidated by legislative committees into a single sentence, which bishops and deputies will consider when they gather June 23-28 in Louisville, Kentucky.

“Resolved,” the proposed resolution says, “that the 81st General Convention of The Episcopal Church ask the Executive Council of The Episcopal Church to set a plan to reduce diocesan assessments to 10% by 2033.”

That simplified language was recommended June 3 in unanimous votes by the parallel bishops’ and deputies’ committees on Governance & Structure, after an extended discussion in which some deputies raised concerns about the potential impact of such a large cut in churchwide revenue.

Sarah Ambrogi, a deputy from the Diocese of New Hampshire who supported the resolution, said it allows some flexibility for church leaders to study and plan for such a reduction, while leaving it up to a future General Convention to decide whether to go through with the plan. “A plan can happen. A plan can be changed,” she said. “But it also is a challenging resolution, because it really does challenge us as a church to start thinking about where our true priorities are.”

The Rev. Patty Downing of the Diocese of Delaware, who also chairs Executive Council’s Joint Budget Committee, said setting an assessment rate of 10% would not produce enough revenue to fund the churchwide governance and ministry structures currently in place. That may create an opportunity to take a hard look at “the alignment of mission, ministry and resources,” she said.

“It’s pushing the church to actually have the conversation,” Downing said.

But by explicitly specifying a 10% target rate, the resolution “offers a destination without defining the journey,” Marsha Adell of the Diocese of Connecticut said. She questioned the specificity of the resolution, if the ultimate goal was to force tough conversations.

“It’s really about making sure that we’re telling people, ‘you need to have the conversation,’ rather than, ‘you need to get to 10%,’” Adell said.

Downing suggested that setting a 10% target may be the only way to “jump-start” a necessary self-examination within the wider church. “Without the jump-starting, I don’t see the institution wanting to have the conversation.”

Diocesan and churchwide revenues have been relatively resilient to pandemic and economic disruptions over the past several years. The proposed 2025-27 churchwide budget plan totals $143 million in expected revenue, of which 65% would be from diocesan assessments, or about $93 million. The proposed budget will be presented June 24 to a joint session of the House of Bishops and House of Deputies.

The budget plan anticipates 2% annual increases in diocesan revenues over the next three years. The church’s longer-term financial outlook is less optimistic. Episcopal leaders across the church have raised alarms that congregations’ plate and pledge revenue could plummet over the next decade as membership continues to decline and as older pledging members aren’t replaced with younger pledging members.

General Convention’s last series of reductions lowered the “asking” rate from 21% in 2010 to 15% starting in 2018 while making the payments mandatory, under a plan to encourage more dioceses to pay their full obligations. That plan has been broadly successful: Of the church’s 108 dioceses, at least 97 were in full compliance with their assessments in 2023, according to the most recent data provided to ENS by the church’s Finance Office. The church also exempts each diocese’s first $200,000 in reported income before calculating the assessment.

Dioceses that don’t contribute at the 15% rate and fail to apply for or receive approval for waivers can be ruled ineligible from participating in churchwide grant programs for one year. In 2024, the handful of ineligible dioceses include the Diocese of Springfield in Illinois, the Jacksonville-based Diocese of Florida, the Diocese of the Dominican Republic and the Diocese of Venezuela.

Budget planners have warned that reducing the rate further, to 10%, could create an annual shortfall of $10 million in the churchwide budget. Members of the six dioceses proposing such a rate reduction, however, have argued for a leaner churchwide operation so that more money can be spent on mission and ministry at the local level.

“We need vibrant congregations in cities and towns across the church who are doing the work and putting the Gospel into action,” the Rev. Tim Baer of the Diocese of Oklahoma previously testified April 30 in an online hearing about his diocese’s resolution and related measures proposing a lower assessment rate. “The time to restructure is now.”

During that hearing, Downing asked Baer if he had any suggestions for churchwide spending cuts to accommodate such a revenue reduction.

“I think the presiding bishop and Executive Council ultimately get that say,” Baer responded. “If it was me, I would look at every part of the budget in governance and administration that is not going toward mission and ministry.”

Others testified against further reductions to the assessment rate. Nathan Brown, a deputy from the Diocese of Washington, warned that such cuts could hinder the ability to fund mission and ministry at the churchwide level. “As a younger Episcopalian, I really believe that our church has a good future. I believe that we have a strong message,” Brown said. “I don’t think cutting the churchwide budget at this time is the way to secure our church’s future.”

Laura Curlin of the Diocese of California expressed similar concerns that lowering the assessment could “reduce our ability to invest in the church of the future” and “future needs that we haven’t even anticipated yet.”

In addition to Oklahoma, the other dioceses that have proposed moving to a 10% assessment rate are Alabama, Arkansas, East Carolina, Georgia and West Missouri.

The Rev. Mark Nabors of the Diocese of Arkansas testified in favor of his diocese’s resolution, C008. “This is not an attack on our beloved church or our important work together,” he said. “This resolution is simply asking the larger church to do the same difficult and discerning work that our parishes and dioceses have already had to do. We have to be clear about mission priorities and impact. We have to restructure administration and be willing to allocate resources according to ministry impact.”

On June 3, some members of General Convention’s Governance & Structure committees alluded to the previous testimony as they discussed the consolidated C008. “I think we had very robust arguments on both sides,” said Navita James of the Diocese of Southwest Florida. She added that she was not in favor of specifying in the resolution a 10% target for the assessment rate.

Others acknowledged the financial uncertainty facing the church – and evidence that declining membership is already forcing Episcopal leaders to make tough budgetary decisions. “I’m from [the Diocese of] New York,” the Rev. Susan Fortunato said. “We are probably in as good an economical shape as anybody, and we’re struggling. And I think we have to have this conversation.”

The Rt. Rev. Melissa Skelton, who has served since October 2022 as bishop provisional of the Diocese of Olympia in western Washington, alluded to her previous experience as a bishop in the Anglican Church of Canada. She said she found other Anglican provinces’ budgetary practices, particularly in planning bishop consecrations, “vastly more economical than some of the assumptions we in The Episcopal Church have.”

“There are just new ways we should think about the stewardship of these resources,” Skelton said in speaking in favor of C008. “I truly question, in this time, where money could be used more effectively locally versus nationally.”

After a 10-minute break, the committees returned and voted in favor of recommending the resolution to the 81st General Convention in Louisville.

As the church’s primary governing body, General Convention divides its authority between the House of Deputies and House of Bishops. All resolutions assigned to the Governance & Structure committees must first be debated and approved by the full House of Deputies. That debate has not yet been scheduled.

If approved by the deputies, the bishops also would need to vote in favor for C008 to be adopted. It then would be sent for action to Executive Council, which is the church’s governing body between General Convention.

– David Paulsen is a senior reporter and editor for Episcopal News Service based in Wisconsin. He can be reached at dpaulsen@episcopalchurch.org.