GENERAL COUNCIL ON FINANCE AND ADMINISTRATION OF THE UNITED METHODIST CHURCH
Quadrennial Budget
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GENERAL COUNCIL ON FINANCE AND ADMINISTRATION OF THE UNITED METHODIST CHURCH
Quad Budget – Budget Timeline
July / Aug 2013
Nov-13
Mar 2014
Jul-14
Aug 2014
Budget Leadership Team meets & presents draft Budget process & Guiding Prinicples to CT & GCFA
CT& GCFA approve the 2017-2020 Program & Budget Planning process
Economic Advisory Committee meets for first time.
Economic Advisory Committee determines initial economic assumptions including Base Percentage & Bottom Line of $628 million
CT & GCFA Approve Bottom Line of $611 million
Nov 2014
Mar 2015
May 2015
Aug 2015
Forms finalized with input from the General Agencies
Forms and Narrative Budget submitted tio CT & GCFA by the General Agencies
EAC meets for final time and reviews Economic Assumptions. CT & GCFA approve Budget proposals
GCFA submits written reports for the Advance Daily Christian Advocate
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GENERAL COUNCIL ON FINANCE AND ADMINISTRATION OF THE UNITED METHODIST CHURCH
Quad Budget - Guiding Principles
1. Build a budget that reflects the denominational mission priorities and outcomes as determined by General Conference and “discerned and articulated” by the Connectional Table in consultation with the Council of Bishops. 2. Present the budget to General Conference in a narrative format that reflects the denominational mission priorities and outcomes. The presentation addresses the essential partnership among the General Conference, the General Agencies and the Annual Conferences. 3
GENERAL COUNCIL ON FINANCE AND ADMINISTRATION OF THE UNITED METHODIST CHURCH
Quad Budget - Guiding Principles
3. Build a budget that considers the following input: – Economic Advisory Committee assumptions – Proposals from the Budget Leadership Team 4. Based upon a review of budget allocations over the past 5 quadrennial, the percentage of world service funds allocated to each agency should not significantly change.
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GENERAL COUNCIL ON FINANCE AND ADMINISTRATION OF THE UNITED METHODIST CHURCH
Quad Budget - Guiding Principles
5. The apportionment distribution should also consider: – CT Evaluation & Accountability • •
Aligning resources for specific missional outcomes and impact in the annual conferences & local congregations Joint CT, COB & Agency Board work on evaluating “missional effectiveness of general program related agencies and connectional structures of the church as they collectively seek to aid annual conferences and local churches” (para. 905.5 2012 BOD)
– Development of a long-term budget process that will be used in 2016 and beyond for evaluating progress in the mission of the UMC 5
GENERAL COUNCIL ON FINANCE AND ADMINISTRATION OF THE UNITED METHODIST CHURCH
6.00%
5.41%
5.00%
Base Percentage - Trends
4.95% 4.37%
4.00%
3.97%
3.56%
3.31%
3.25%
3.19%
'13-'16
'17-'20 EAC $621M
'17-'20 GCFA / CT $611M
3.00% 2.00% 1.00% 0.00% '93-'96
'97-'00
'01-'04
'05-'08
'09-'12
Base Percentage = Total apportionments as a percentage of “Nominal Net Expenditures” for Local Churches
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GENERAL COUNCIL ON FINANCE AND ADMINISTRATION OF THE UNITED METHODIST CHURCH
EAC Econ. Assumption – Apportionment $
CT / GCFA 2017 – 2020 Approved Apportionments = $611 million • $10 million lower than amount recommended by the Economic Advisory Committee (EAC) • 1.3% Nominal increase from current Quadrennium ($603 million) • 7.2% Real spending decrease with average inflation of 2.15% from 2014 to 2020
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GENERAL COUNCIL ON FINANCE AND ADMINISTRATION OF THE UNITED METHODIST CHURCH Summary of Jurisdictional Apportionments
FUND
Total 2009-2012
Total 2013-2016
Total 2017-2020
World Service Fund Percent Change
333,356,000
$ 307,786,816 $ 311,818,512 -7.7% 1.3%
Ministerial Education Fund Percent Change
113,130,000
$ 105,668,000 -6.6%
107,052,144 1.3%
Black College Fund Percent Change
45,128,000
$ 42,150,000 -6.6%
42,702,122 1.3%
Africa University Fund Percent Change
10,100,000
$
9,433,000 -6.6%
9,556,563 1.3%
Episcopal Fund Percent Change
94,400,000
$ 92,649,184 -1.9%
93,862,795 1.3%
General Administration Fund Percent Change
36,935,000
$ 37,149,000 0.6%
37,635,614 1.3%
Interdenominational Cooperation Fund Percent Change Total Percent Change
8,848,000 641,897,000
$
8,264,000 -6.6%
8,372,250 1.3%
603,100,000 611,000,000 -6.0% 1.3% 8
GENERAL COUNCIL ON FINANCE AND ADMINISTRATION OF THE UNITED METHODIST CHURCH Jurisdictional Collection Rate Assumptions
Collection Rate
2012 90.2% 92.6% 88.1% 89.8% 87.4% 93.3% 87.4%
2013 90.0% 91.6% 88.2% 88.3% 88.0% 91.8% 87.4%
2014 91.2% 93.2% 88.6% 89.4% 88.7% 91.5% 88.0%
Avg Last 3 years 90.5% 92.5% 88.3% 89.1% 88.0% 92.2% 87.6%
Change To: Avg Last 4 years 89.8% 91.8% 87.2% 88.7% 87.1% 92.3% 86.8%
20172020 90.0% 92.0% 88.0% 89.0% 87.5% 92.0% 87.0%
Avg Last 3 years -0.5% -0.5% -0.3% -0.1% -0.5% -0.2% -0.6%
Avg Last 4 years 0.2% 0.2% 0.8% 0.3% 0.4% -0.3% 0.2%
Payout in Thousands of Dollars $ 280,637 $ 86,354 $ 94,206 $ 38,005 $ 32,931 $ 8,792 $ 7,284
Apportioned Fund World Service Episcopal Ministerial Education Black College General Administration Africa University Interdenom. Cooperation
2011 87.7% 89.9% 83.9% 87.2% 84.2% 92.6% 84.3%
Total
87.3% 90.1% 89.7% 90.8% 90.2% 89.5% 89.7% -0.5% 0.2% $ 548,208
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GENERAL COUNCIL ON FINANCE AND ADMINISTRATION OF THE UNITED METHODIST CHURCH 2017-2020
– Four Areas of Focus
Area of Focus Leadership Development I (AU, MEF, BCF) Leadership Development II Church Growth Ministry With the Poor Global Health Disciplinary Responsibilities Other Essential Ministries Total
% of Agency Spend 24% 23% 22% 13% 7% 7% 4% 100% 10
GENERAL COUNCIL ON FINANCE AND ADMINISTRATION OF THE UNITED METHODIST CHURCH 2017-2020
Agency United Methodist Men Discipleship Ministries Native Am. Comp. Plan Strength. the Black Church Connectional Table Global Ministries National Plan for Latino & Hispanic Ministry Asian American Language Ministry Pacific Island Ministry Plan Korean Ministry Plan Church & Society Religion & Race Status & Role of Women Archives & History UM Communications Higher Education General Council on Finance & Admin. Total
Revenues – General Agencies
Apport 26% 61% 86% 98% 93% 59% 100% 100% 100% 100% 46% 94% 90% 90% 79% 85% 61%
Other Church 0% 5% 1% 0% 0% 20% 0% 0% 0% 0% 5% 0% 0% 0% 4% 4% 2%
71%
8%
% of Total Revenue Benef. Invest Trust Grants 1% 7% 9% 10% 9% 0% 3% 0% 5% 2% 0% 1% 1% 6% 0% 5% 3% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 7% 4% 9% 3% 3% 0% 1% 8% 0% 3% 4% 0% 5% 5% 0% 8% 1% 0% 11% 6% 1% 6%
4%
1%
Other 58% 14% 5% 0% 0% 13% 0% 0% 0% 0% 29% 0% 0% 2% 7% 3% 18% 10% 11
GENERAL COUNCIL ON FINANCE AND ADMINISTRATION OF THE UNITED METHODIST CHURCH
Reserves Analysis
In Thousands
Agency
2012 Available Unrestricted Net Assets
2013-2016 Projected 2017-2020 Projected 2013-2016 Projected 2016 Budgeted 2020 Budgeted Use of 2013-2016 Available Use of Available Use of Net Unrestricted Projection Unrestristed Unrestricted Unrestristed Assets Net Assets Vs. Budget Net Assets Net Assets Net Assets
United Methodist Men Board of Discipleship Native Am. Comp. Plan Strength. the Black Church Connectional Table Global Ministries Church & Society Religion & Race Status & Role of Women Archives & History UM Communications Higher Education General Council of Finance & Admin. Episcopal Fund Total All Agencies & Episcopal Fund
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $
$ (88) $ 3,787 $ 42 $ $ 626 $ 6,700 $ 815 $ 500 $ $ 512 $ 8,370 $ 5,000 $ 3,400 $ 6,007 $ 35,670
415 15,448 274 111 629 43,380 10,970 3,521 513 1,494 27,945 19,161 4,599 17,746 146,205
$ 5 $ 2,240 $ 32 $ (120) $ 265 $ 18,538 $ (505) $ 1,163 $ 4 $ 624 $ (1,255) $ 3,868 $ 2,907 $ 503 $ 28,269
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $
93 (1,547) (9) (120) (361) 11,838 (1,320) 663 4 112 (9,625) (1,132) (493) (5,504) (7,401)
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $
410 13,208 242 231 364 24,841 11,475 2,358 509 869 29,201 15,293 1,691 17,243 117,936
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $
5 5,234 66 165 74 4,000 1,133 1,048 150 811 12,989 5,000 0 9,324 40,000
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $
405 7,974 176 66 290 20,841 10,342 1,310 359 58 16,212 10,293 1,691 7,919 77,937 12
GENERAL COUNCIL ON FINANCE AND ADMINISTRATION OF THE UNITED METHODIST CHURCH
Episcopal Fund - 2017-2020 Budget
2009 - 2012
Total Revenue
2013 - 2016 2017 - 2020
86,757
89,295
89,506
3,139 695 454 4,289
3,823 910 4,903 1,173 10,808
4,414 910 5,677 1,229 12,230
32,573 17,186 2,014 739 169 52,680
34,433 17,080 2,246 798 290 54,848
38,917 18,306 2,246 875 330 60,674
5,987 8,385 1,210 227 15,808
7,318 8,561 1,245 189 17,314
8,454 8,666 1,245 232 18,597
1,163 3,615 4,778
963 2,869 3,832
1,080 3,210 4,290
2,156 209 79,920
2,997 89,798
3,039 98,830
6,837
(503)
(9,325)
17,648
17,145
7,821
Council of Bishops Meetings & Travel Ex. Secretary of the COB OCUIR All other
Total - Council of Bishops Juridictional Conferences Salary & Benefits Housing, Office Allowance & equip. Travel Moving All Other
Total - Jurisdictional Conferences Central Conferences Salary & Benefits Housing, Office Allowance & equip. Travel All Other
Total - Central Conference
Assumptions: • Salary Increases @ 3% annually • Healthcare increases @ 6% annually • Travel inflation @ 2% annually • Assumes 92% collection rate in the U.S. and 100% for Central Conferences
Retired Bishops Travel & Moving Insurance
Total - Retired Bishops Administrative Charges Other
Total Expenditures Surplus / (Deficit) Available Reserves
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GENERAL COUNCIL ON FINANCE AND ADMINISTRATION OF THE UNITED METHODIST CHURCH
Episcopal Fund
Actions taken to manage costs & revenues • Retiree Health – Changed coverage to Medicare Advantage program in 2014. This reduced total costs by approximately $400,000 annually in the Episcopal Fund. • Restructure of Active Healthcare – 2016 plans are significantly restructured, including a high deductible plan. Additional changes will be studied for the coming years to avoid excise taxes and reduce costs. • Central Conference Apportionment Formula – The proposed formula should increase apportionment giving from the Central Conferences by between $100,000 to $200,000 per year during the next quadrennial. 14
GENERAL COUNCIL ON FINANCE AND ADMINISTRATION OF THE UNITED METHODIST CHURCH
Episcopal Fund
Actions taken to manage costs & revenues • Reduction of Full COB meetings - While the COB still meets twice per year, the retirees only attend one meeting per year with the other meeting an active Bishop retreat. • Concur Expense System – In 2014 GCFA implemented expense reimbursement system to enable better auditing and tracking of travel expense requests to ensure they fall within the travel policies and procedures. By allowing electronic submissions it also reduces the costs for the episcopal offices related to expense reporting. • Monthly / Quarterly financial communication between GCFA and COB Leadership – Reporting includes YTD & full year projection compared to Budget, apportionments by annual conference, total spend by Bishop YTD. This dialogue helps to ensure cost overruns are mitigated or eliminated. 15
GENERAL COUNCIL ON FINANCE AND ADMINISTRATION OF THE UNITED METHODIST CHURCH
Episcopal Fund
Quadrennial Cost Per Bishop – 2017-2020 • Jurisdictional Conferences – $1,319,000
• Central Conferences – $930,000
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GENERAL COUNCIL ON FINANCE AND ADMINISTRATION OF THE UNITED METHODIST CHURCH
Central Conference Apportionments
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GENERAL COUNCIL ON FINANCE AND ADMINISTRATION OF THE UNITED METHODIST CHURCH Central
Conference Apportionments
Where Have We Been? The 2012 General Conference approved legislation to have Central Conference apportionments. • Judicial Council overturned the legislation as it gave GCFA the authority to negotiate apportionments instead of having a formula based approach. • Since 2012 General Conference, GCFA has working with the Standing Committee on Central Conference Matters (StCCM) to develop an equitable approach & formula. • In February 2015, The StCCM voted in support of the apportionment formula that was approved by GCFA in May 2015. 18
GENERAL COUNCIL ON FINANCE AND ADMINISTRATION OF THE UNITED METHODIST CHURCH Central
Conference Apportionments
Rationale for Global Giving The United Methodist Church is increasingly a global denomination • > 40% of membership is outside of the United States • > 40% of General Conference delegates are from Central Conferences • 30% of Episcopal Areas are in the Central Conferences 19
GENERAL COUNCIL ON FINANCE AND ADMINISTRATION OF THE UNITED METHODIST CHURCH Central
Conference Apportionments
Rationale for Global Giving • Currently Central Conferences voluntarily contributing approximately $950,000 / year. • However, this support is not widely recognized across the denomination since it is not an apportionment. – This is a deduction of support for salary, office & housing allowances. – All conferences are contributing at least 10% of these costs – Some conferences in Europe are contributing close to 100% of their Episcopal Fund support. 20
GENERAL COUNCIL ON FINANCE AND ADMINISTRATION OF THE UNITED METHODIST CHURCH Central
Conference Apportionments
Rationale for Global Giving Episcopal Fund and General Administration Fund are the initial focus of Global Apportionments • The Episcopal Fund directly supports Central Conferences • General Administration has direct support via: – General Conference (> 40% of attendees from Central Conferences) – Standing Committee on Central Conference Matters
• This is a starting point 21
GENERAL COUNCIL ON FINANCE AND ADMINISTRATION OF THE UNITED METHODIST CHURCH Central
Conference Apportionments
Goals 1. Increase Giving to the general apportioned funds as part of our common financial commitment to the shared United Methodist mission and ministry and report these gifts to 2016 General Conference 2. Develop and implement, over time, systems and structures that will lead to a global apportioning of funds to annual conferences around the world on a shared, rationale and equitable basis. 22
GENERAL COUNCIL ON FINANCE AND ADMINISTRATION OF THE UNITED METHODIST CHURCH Central
Conference Apportionments
Choosing a Basis for the Formula Several Options Considered Option 1: Expenditures Based (Local church spending) Option 2: Income Based (Cash offerings collected) Option 3: Pastor Salary Based Option 4: General Conference Delegates Based Option 5: Professing Membership Based Membership Based chosen: – Availability and reliability of data is better than other options – Used to assign delegates for General Conference 23
GENERAL COUNCIL ON FINANCE AND ADMINISTRATION OF THE UNITED METHODIST CHURCH Central
Conference Apportionments
The Formula: The per member apportionments to each Central Conference is the same as the U.S. adjusted by an Economic Modifier (GDP / Capita)
Per Member Apportionments in the United States: • Episcopal Fund = $3.00 / Member • General Administration = $1.24 / Member
Economic Modifier = GDP / Capita • U.S. GDP / Capita = 100% • Economic Modifier is the GDP / Capita in relation to that of the U.S. 24
GENERAL COUNCIL ON FINANCE AND ADMINISTRATION OF THE UNITED METHODIST CHURCH Central
Conference Apportionments
The Formula: CC Apportionment. = (U.S. Apportionment Per Member * # of CC Members)* (CC GDP Per Capita / U.S. GDP Per Capita) Example: U.S. Apportionment Per Member = $4.234 Manila Philippines # of Professing Members = 142,465 Philippines GDP / Capita in relation to the U.S. = 12.2925% Per Capita Apportion. Unadjusted =($4.234 * 142,465) = $603,197 Economic Adjustment Factor = 12.2925% or .122925 Manila Apportionments = ($603,197 * .122925) = $74,148 25
GENERAL COUNCIL ON FINANCE AND ADMINISTRATION OF THE UNITED METHODIST CHURCH Central
Conference Apportionments
Effect of Economic Modifier
Region United States Europe Philippines Africa
Per Member Percent of Apport. U.S. $ 4.23 100.0% $ 3.33 78.7% $ 0.52 12.3% $ 0.13 3.1%
Per member apportionments are for the Episcopal and General Administration Funds only
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GENERAL COUNCIL ON FINANCE AND ADMINISTRATION OF THE UNITED METHODIST CHURCH Central
Conference Apportionments
Effect of Economic Modifier Apportionments Per Member $4.50 $4.00 $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $0.00 United States
Europe
Philippines
Africa
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GENERAL COUNCIL ON FINANCE AND ADMINISTRATION OF THE UNITED METHODIST CHURCH Central
Conference Apportionments
New Formula vs. Current Method by Region Region Philippines Europe Africa
Current Proposed % Method Formula $ Change Change $ 39,750 $ 117,971 $ 78,221 197% $ 716,753 $ 194,280 $ (522,473) -73% $ 175,900 $ 709,460 $ 533,560 303%
Annual Amount
$ 932,403
$ 1,021,711
$
89,308
10%
Quadrennial Amount $ 3,729,612
$ 4,086,842
$ 357,230
10% 28
GENERAL COUNCIL ON FINANCE AND ADMINISTRATION OF THE UNITED METHODIST CHURCH Central
Conference Apportionments
New Formula vs. Current Method by Conference Current Method $ 12,750 $ 12,750 $ 10,970 $ 12,750 $ 12,420 $ 17,450 $ 15,150 $ 17,250 $ 12,750 $ 12,750 $ 12,750 $ 12,420 $ 13,740 $ 210,101 $ 5,000 $ 382,073 $ 119,579 $ 13,250 $ 13,250 $ 13,250
Proposed Formula $ 11,899 $ 162,945 $ 20,779 $ 5,706 $ 7,608 $ 19,271 $ 18,833 $ 123,955 $ 111,924 $ 34,538 $ 92,569 $ 72,110 $ 27,324 $ 44,717 $ 2,797 $ 110,857 $ 35,909 $ 37,643 $ 6,174 $ 74,154
$ Change % Change $ (851) -7% $ 150,195 1178% $ 9,809 89% $ (7,044) -55% $ (4,812) -39% $ 1,821 10% $ 3,683 24% $ 106,705 619% $ 99,174 778% $ 21,788 171% $ 79,819 626% $ 59,690 481% $ 13,584 99% $ (165,384) -79% $ (2,203) -44% $ (271,216) -71% $ (83,670) -70% $ 24,393 184% $ (7,076) -53% $ 60,904 460%
Annual Amount
$
932,403
$ 1,021,711
$ 89,308
Quadrennial Amount
$ 3,729,612
$ 4,086,842
$ 357,230
Episcopal Area Central Congo Cote D'Ivoire East Africa East Congo Eastern Angola Liberia Mozambique Nigeria North Katanga Sierra Leone South Congo Western Angola Zimbabwe Central and Southern Europe Eurasia Germany Nordic-Baltic Baguio Davao Manila
Region Africa Africa Africa Africa Africa Africa Africa Africa Africa Africa Africa Africa Africa Europe Europe Europe Europe Philippines Philippines Philippines
10% 29