09242
March 25, 2009

GAC staff leaders propose plan to meet $9.92 million budget shortfall

Council to vote on package of expense cuts and use of reserves March 27

by Jerry L. Van Marter
Presbyterian News Service

LOUISVILLE ― Senior staff of the General Assembly Council (GAC) of the Presbyterian Church (U.S.A.) outlined their plans for closing a $9.92 million shortfall in the 2009 General Assembly Mission Budget at a meeting of the council’s executive committee here March 24.

Because of the personnel implications of the budget reductions, details of the plan will be considered by the council in three closed sessions over the course of the three-day council meeting before the GAC takes final action on the revised budget Friday morning, March 27.

The proposal reduces expenses by $3.99 million and uses previous years’ reserves of $5.93 million to cover the shortfall. The net effect is a 4 percent reduction in the 2009 mission budget ― from $110,885,317 to $106,914,584 ― and represents a 16 percent decrease in the unrestricted portion of the budget and a 1 percent decrease in the restricted portion.

“We never thought we would be here,” GAC Executive Director Linda Valentine told the committee. “We had finished 2007 in good shape and the church was reconnecting. The 2009-2010 budgets looked sound, we had no staff layoffs in 2008 and last year’s General Assembly, for the first time in many years, voted to increase the number of mission workers serving around the world” as well as to reestablish an environmental justice office, adopt a racial ethnic church growth strategy and embark on a new evangelism emphasis to “Grow Christ’s Church Deep and Wide.”

And then the global financial meltdown occurred. “We know too much about what’s happened,” Valentine said. “The S&P index is down 50 percent, hundreds of thousands of jobs have been lost, revenues are down everywhere and our country is gripped with fear and anxiety.”

Revenue projections presented by GAC Treasurer and Chief Financial Officer Joey Bailey bear that out. New revenue projections in all but one category of the mission budget that was approved last September show a decline:

• “Basic (unrestricted) Mission Support”: from $12.7 million to $11 million;
• “Directed (restricted) Mission Support”: from $4.7 million to $4 million;
• Additional unrestricted forms of giving: from $3.6 million to $3.4 million;
• Additonal restricted forms of giving: from $3.1 million to $1.91 million;
• Churchwide special offerings: from $16.08 million to $14.67 million;
• Other specific appeals: from $16.87 million to $16.4 million;
• Unrestricted interest and dividends: from $9.37 million to $9.20 million;
• Restricted interest and dividends: from $11.4 million to $10.2 million.

A bright spot, Bailey added, is an increase in the contribution to the mission budget by Hubbard Press, the PC(USA)-related offering envelope company that recently expanded its business from Presbyterian churches to include churches of other denominations. The increased business will translate into a one-time contribution of $350,000 this year and an increase in Hubbard’s annual contribution to the mission budget of $150,000, Bailey said.

Another positive line item is the Pentecost Offering ― projected to increase by $90,000 to $870,000 this year. The offering ― which supports the PC(USA)’s ministries with children at risk, youth, and young adults ― has grown every year since its inception in 1997.

The use of reserves includes a $510,000 transfer from the Presbyterian Mission Program Fund (PMPF), far less than the $3.45 million that was originally budgeted. The PMPF is used primarily to manage cash-flow, as money flows into GAC coffers at an uneven rate over the year while expenses are fairly constant, Bailey said.

The expense reductions are not just a result of financial shortfalls, said Deputy Executive Director for Mission Tom Taylor, though the current financial crisis “has accelerated strategic work we began two years ago when we started implementing the GAC’s Mission Work Plan.”

Valentine agreed. Echoing remarks she and Taylor made in a budget orientation video released March 20, she told the committee “this process has been going on at least as long as I’ve been at the GAC.” She began work as Executive Director July 1, 2006.

“This has been a constant process of reshaping our mission and ministry,” Valentine said. “We relentlessly ask: What are we uniquely positioned to do? What do we do best? What does the church most need from us?”  

The budget decisions have been driven a number of guiding principles, Taylor added:

• To focus on what the national offices can do uniquely and best;
• To take down organizational silos;
• To further the directives of the General Assembly;
• To arrange the GAC work force to be effective, efficient and synergistic;
• To cease work that can be more effectively done by congregations and middle governing bodies;
• To consolidate and streamline operations; and
• To demonstrate stewardship that is collaborative, accountable, responsive and excellent.

Executive committee leaders praised the staff for the work done to date.  “The massive cuts of 2006 included lots of loose threads,” said GAC vice-chair Mike Kruse of Kansas City, MO. “Much of this work is tying up those loose threads. This is not new and the staff has done a great job of strategically made decisions since 2006.”

GAC chair Carol Adcock of Fort Worth, TX, agreed. “At that time we asked the staff to organize themselves for the future. We did not want to micro-manage them and they have done what we asked and done it well.”