This is the first of three articles on the May 2010 NCC Governing Board Meeting. Coverage of NCC political statements can be viewed by clicking here.
Counting on an influx of new foundation support to preserve its programs, the National Council of Churches has adopted a budget for the coming year that places the ecumenical organization in a spending deficit for the seventh year in a row.
Meeting May 17-18 in Elizabeth, New Jersey, the Council’s Governing Board adopted a budget of $5,230,900 for fiscal year 2010-2011 with a $450,000 deficit. The budget represents a modest increase over the council’s spending for the present year, but plunging revenues will result in a deficit.
The new budget also assumes a 48 percent increase in funding from foundations. If the foundation funding does not materialize, the council will face a “make it or reorganize year,” according to NCC General Secretary Dr. Michael Kinnamon.
Funding received from foundations for fiscal year 2008-2009 was just under $1.1 million. In Fiscal Year 2009-2010, that number is projected to drop to under $700,000. The adopted fiscal year 2010-2011 budget expects foundation funding to soar back to under $1.3 million.
The ecumenical council has struggled financially for the past several years. In 2007 under outgoing General Secretary Bob Edgar, over a dozen positions were eliminated in order to stabilize the council’s financial footing. The 2007 reorganization brought the NCC staff down to a fraction of the number of personnel it had during the council’s heyday in the 1950s.
Information provided to the Governing Board shows a decrease in funding for the council’s work. Unrestricted reserves stood at $4 million dollars at the beginning of the fiscal year. According to Kinnamon, that number is expected to drop to $3 million by the end of the following fiscal year.
Over the past decade, unrestricted giving to the council’s Ecumenical Commitment Fund (ECF) – undesignated funds given by the denominational offices to the NCC general budget – has dropped by 25 percent. Similarly, designated giving by church agencies for specific projects has dropped by 65 percent in the same time period.
Several other factors have negatively impacted the council’s revenue stream. A deal with publisher Harper Collins by the previous NCC leadership cut royalties from the NCC-owned New Revised Standard Version of the Bible. Negotiations resulted in a front-loaded payment schedule that has peaked. NRSV royalties to the council will now drop by $500,000 over the next fiscal year.
Compounding the decrease in reliable NRSV royalties is a drop in investment revenue, which Kinnamon attributed to the poor economy.
The council has also been hit with further cuts by its member communions. Kinnamon said that one of the two largest denominational donors to the NCC has informed the council that it will cut back its allocation by $150,000. The other largest donor has said that it will also reduce giving so that the NCC is not overly dependent upon a single church for revenue. The two largest funders of the NCC are the United Methodist Church and the Presbyterian Church (U.S.A.)
Kinnamon noted that in the last fiscal year more member communions made financial contributions than in the previous year; however, 13 member communions still made no contribution. These non-payers constitute over one-third of the council’s 36 member bodies.
The general secretary noted that the NCC staff had made an effort to be as thrifty as possible, with no staff salary increases since 2006. The council’s largest single expense is personnel, with 61 percent of the budget going towards salary or personnel expenses. In addition to decreasing retirement contributions since 2007, the council also places staff on involuntary furlough for five days annually.
In a departure from previous practices, Kinnamon and NCC President Peg Chemberlin kept budget deliberations in open session, underscoring the council’s stated commitment to transparency. Under previous General Secretary Bob Edgar, budget details and discussions were often kept in closed-door executive sessions.
During budget deliberations, several members of the Governing Board shared concerns about the decision to adopt another unbalanced budget. Others agreed with Kinnamon that the council would need to prevent cuts to programs in order to attract further foundation support.
Some expressed uncertainty about the council’s ability to bring in hoped-for foundation revenues. One board member questioned the council’s goal of increased foundation support, saying “if we get too dependent on foundations, they don’t want to keep funding us.”
“We believe these numbers are realistic,” said Cheryl Wade of the American Baptist Churches USA, chair of the NCC’s Administration and Finance Committee. “If they were made up numbers, we’d present a balanced budget, not an unbalanced one.”
Others expressed frustration in general, questioning if the staff had the necessary resources to achieve development goals.
“We knew two or three years ago that we would be at this point,” said another board member. “I don’t think we can afford to go around and around having development conversations about what we didn’t accomplish. We’ve got to accomplish something, and we need more than one or two staff people doing it. We need to own it.”
While several members of the board introduced a motion to re-open the adopted budget for consideration on the second day of the meeting, a majority of approximately two-thirds decided not to revisit the budget.
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