Much was made in the closing months of 2017 about the fact that Grace Church has a budget surplus. But this triumphalism is both empty and dangerous for the parish, as it overlooks the parish’s tremendous financial vulnerability.
Let me start by saying that parishioners have stepped up their individual pledges by almost 17 percent over the past two years. That is a good sign, to be sure.
At the same time, however, the church has lost more than 100 pledging units during the same period of time. Additionally, costs relating to the physical plant are skyrocketing. Average Sunday attendance — a barometer of how compelling the fellowship, worship, and other Sunday ministries are — has dropped by more than 17 percent in the past two years.
But the real risk comes when you look at the concentration of giving in the parish. Three families, all well-known to parishioners, comprise well over 10 percent of all annual giving. Additionally, much of last year’s surplus is attributable to appreciated stock gifts from these same donors. It also bears mentioning that all three families are largely retired. That means that they days when they can support Grace at current levels are fast drawing to a close.
Yet safe money says that most vestry members have no understanding of this phenomena. Lose any one of the three as donors for any reason, and things get ugly in a hurry. Yet there is no plan to deal with this risk, and other than the trust fund, there is very little saved for the future. Indeed, as I have pointed out before, operating cash reserves are dangerously low, and nowhere near recommended levels for a church of this size. Yet the good times continue to roll, and cost structures remain much too high, including the massive expenditures necessitated by the cost sharing arrangement with the school. This means that utilities and other non-fungible costs are shared 50/50 with the school, despite the fact that the school consumes the lion’s share of utilities, and causes much of the wear and tear on the building and grounds. Yet there is little evidence that the school produces members for the church or otherwise benefits the church’s long-term mission.
In fairness, the school is much more collegial these days, and the old empire-building days on the part of the school seem to be over. Additionally, Patty, the new head of school, appears both more approachable and more engaged than was Chris Byrnes. Nonetheless, I continue to have long-term reservations about the willingness or ability of parishioners to subsidize the school.
It’s also curious. Even when the vestry was urged to cut back in 2014, parish leaders responded by saying that there was little to cut back. And yet more than $80,000 has been pared from the budget in recent years, including ending the ludicrous $9000 annual grant to the school, which was both unneeded and silly in light of their church’s subsidy of the school’s operating costs.
The upshot is that the church would be wise to start from a zero-based budget, then to ask what programs are ministries are essential, and budget from there. Nor should there be any more bonuses to Bob Malm or other staff absent an annual performance review and the achievement of specific and measurable outcomes. Hint: Bullying and shunning should not be part of any clergy person’s job performance, ever.