Truly, I don't know what to make of it.
We got a smattering of information -- and some nice graphs -- that laid out the reality that we're $85,000 in the hole this fiscal year. And Policy Board members made clear that we can't keep borrowing from the endowment to pay for operating costs (we already owe $160,000 to our own endowment). That's absolutely right. We can't cook the books.
But that's not the same thing as endorsing the options the Policy Board has chosen, which target music and religious education disproportionately.
It is also clear from the numbers that the average pledge is rising steadily, even if many members who do pledge aren't increasing their giving. It's also a fact that there are simply fewer people pledging than in the past, which could be a reflection of the sour economy or it could be a way of protesting quietly. There's no way to know.
The Policy Board griped a little that nobody paid attention when it was dealing with the budget last fall, but, of course, why would we? We weren't given enough information to be particularly concerned. I think, too, that even the church leadership thought pledges would close the revenue gap. When they didn't, we heard a lot of begging that I guess didn't get too far. Now we're looking at cuts that hurt.
About a dozen members got to speak, with widely varying views. A couple pointed out that the pledge targets the church seeks are unrealistic for many people and urged the leadership to make clear that any donation helps. Many praised the Policy Board members for their hard, volunteer work (excessively so, I thought, since I see scores of people at the church donating their time for all sorts of things, from teaching Sunday school to making sandwiches for soup kitchens). There are a lot of thankless jobs at a church. Being one of its leaders isn't really one of them, apparently, since they got lots of thanks Sunday. Some went on to praise the proposed cuts while others decried them.
I don't want to characterize specific comments by specific people because I didn't take notes or record them. I hope many of them will offer their comments on this blog so that everyone can weigh them.
I wish I could provide more of the financial details as well. I'll try to pick up the right papers at the next session today -- though I have to go work on the play this afternoon, as one of the many volunteers involved with "Charlotte's Web," so I might not have a chance -- because I'd like to provide some of the details that I know many people would like to see.
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2 comments:
point of clarification and a comment from Pete Begin, Financial Advisor:
We owe $160,000 to the Endowment from a loan we took out back in 1999/2000 that is being paid off over 20 years. We ALSO borrowed $183,000 to do the brickwork repair in 2006. This has no repayment plan set up yet. That's a combined $343,000 (nearly 20% of the Endowment) of borrowing from our ancestors because we're not raising enough from current members to properly care for our buildings.
Now a comment: when you look at the details of the budget you'll see a couple of items that aren't staff-related that may come up as an area to cut (in fact, the few people that asked for a copy of the budget at the meeting have already suggested these cuts).
1. Transfer to the "Depreciation" Fund - this is a $16,000 line item. It represents a reserve we put away for major repairs and capital expenditures. For example, recently our staff was being significantly hampered by old computers. We upgraded the computers and went to this Fund for the money. However, putting away $16,000 for a $5,000,000 building is woefully underfunding it. We should NOT cut this transfer.
2. Capital Improvement Financing - this is the debt service on the $160,000 loan. Cut this and you're looking for a new Financial Advisor. BTW this is a volunteer position which requires a professionally trained and dedicated individual. Anyone interested in doing this role (for free) should contact me as I've done it for 10 years now and can use a break.
I believe there are certain places in the budget,like these two, that no one is going to stand up and argue in support of, but that must not be cut just the same. We need our CURRENT membership to pay its share of the upkeep of the buildings that have been built on the backs of prior members. We also need to respect those who came before us and gave $1.8M to the Endowment in their wills/trusts so that we could use the INCOME from these investments to do good things at the church. We can not invade the principal of the Endowment (as some have suggested) to bail us out because we feel we're entitled to spend more than we contribute on an annual basis. There may be other places to cut or "find" other revenue, but the above items should be off the table. (p.s. these are my own personal views)
I completely agree with Pete about the need to protect our endowment instead of raiding it. And repaying the debt on our loan to ourselves is absolutely required.
Personally, I think it would be more than helpful for Pete and/or the Policy Board to lay out the financial issues in a clear report that at least most of us could follow. This is actually the first time I had any idea what kind of endowment we have.
But we also have to keep in mind that if we slash programs that bring people to our church, including music, we may wind up with even bigger problems down the road.
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