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Financial Management Committee Report to Planning and Agenda Committee

Financial Management Committee (FMC)
Response to question from Planning and Agenda Committee
Regarding COGS Engagement in General Synod Priority Setting
April 2, 2012

At the November 2011 COGS meeting, the following resolution was passed:

“That this Council of General Synod set aside two full days to consider clear directions and a plan for the efficient utilization of financial, staff and structural resources in the achieving of the priorities and practices set out in Vision 2019.”

In planning for the first day of this COGS engagement discussion, Planning and Agenda Committee (PAT) has asked FMC to consider the following question:

“What does the relationship between revenue and expenditures look like for the next 3-5 years? Are there steps that we could consider to improve those prospects?”

Overview:
General Synod has a balanced budget for 2012, with the help of grants from the Ministry Investment Fund (MIF). The forecast indicates that this can be sustained into 2013 as long as revenues hold up to projections. This current stability, supplemented by grant funding for General Synod initiatives from the MIF allows General Synod to continue its work to implement Vision 2019, and to act on General Synod 2010 and COGS resolutions.

However, the long‐term forecast shows significant work is needed to maintain sustainability. General Synod continues to face financial pressures on several fronts. Proportional giving from dioceses accounts for 67% of our budgeted revenue and this has been decreasing at a rate of three per cent annually (adjusted for inflation) since the early 1990s. This trend parallels the overall decline in Anglican Church attendance across  Canada. There is no indication at this time that this trend will turn around and this is  worrisome. If revenues continue to decline and the inflationary push on expenses continues at today’s rates, then General Synod will be running a deficit again in 2014 and by 2016, that deficit will have reached about $1 million annually.

Revenues:
General Synod is highly dependent upon proportional giving from the dioceses, supplemented with fundraising by Resources for Mission. In 2011 and 2012, there are indications that some dioceses are having difficulty meeting their commitment to the current level of proportional giving. If the dioceses are not able to generate revenue stability, General Synod will need to revisit the approach to providing a national role.
Resources for Mission (RfM) is undertaking significant, visionary, and exciting initiatives aimed at improving donor revenues at all levels in the church. It is also launching Together in Mission, a diocesan‐based, mission‐focused national campaign that aims to link the financial needs of the whole church—parishes, dioceses and the General Synod. The success of these initiatives will support General Synod revenues and provide funding for particular identified needs. However, it cannot replace proportional giving. Healthy, committed Proportional Giving by the dioceses is crucial to program of General Synod.
Expenditures:
In 2008, COGS mandated General Synod to eliminate deficit budgeting by 2012. This was achieved ahead of schedule in 2011. General Synod’s costs were reduced significantly over 2008 through 2010, when General Synod restructured its programs. The restructuring involved a process that started in April 2010 and culminated in November 2010 with Management realigning work that matched its mission priorities and could only be done at a national level. The new structure touched all ministries. The cuts included  many grants to overseas partners and ministry work, including Volunteers in Mission and the Theological Students International Internship Program. Management Team also decided to wind down library operations and streamline support staff and travel and event planning.

The forecast for 2013 to 2016 assumes that expenditures will be maintained at the 2012 level and adjusted for inflation. Within these confines and with the support of MIF funding, the work of General Synod will be focused on achieving the vision 2019 priorities and practices through the lens of the Marks of Mission. At the same time, management is diligently monitoring revenues and expenditures and realigning priorities as the circumstances warrant.

CoGS has mandated that General Synod will not have deficit budgets going forward.

Steps to improve prospects:
Clearly, the primary focus now is on ensuring sustainable revenues. Stabilizing and improving proportional giving is essential. This requires a partnership of all the dioceses and General Synod committed to funding the work of the National Church.

• RfM, in partnership with the dioceses is pursuing a variety of initiatives aimed at stabilizing revenues and finding new sources of funding that will hopefully supplement General Synod’s reliance on proportional giving. However, these initiatives serve to supplement other sources of funding and cannot replace proportional giving, the largest funding source.
• A review of the proportional giving system is being undertaken by a working group
reporting to FMC. The review was mandated by General Synod 2010 and will report back to General Synod 2013. The review will involve an assessment of the proportional giving
system, and will include a component that will raise awareness and understanding of the
system, and promote a recommitment by dioceses to funding the work of the National
Church.
• To continue to sustain the core mission programs of the National Church, such as the
Primate’s ministry and the ministry in the North, requires an ongoing commitment by
dioceses through proportional giving. That commitment needs to be owned by the diocesan councils, as well as by the Bishop and CoGS representatives.

In addition, the work of the Governance Working Group is critical to the financial viability of the Church throughout Canada, as it reviews the structures of our church and aligns them with the priorities and practices of Vision 2019. It is vital that the Church change its ways of “doing church”.

As General Synod moves into an uncertain future, COGS’s governance role is key. The information COGS has received on the budget and longer term forecast, the budget narrative, and committee reports, equips the members to assess and provide guidance on work plan and budget priorities, and to chart the next stage of General Synod’s road to financial sustainability.

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