National Council of Churches faces $1.8-million deficit in first half of ’01
By John H. Adams, The Layman Online, October 5, 2000
NEW YORK – After depleting its reserves to cover years of spending binges and financial miscues, the National Council of Churches is projecting a $1.8-million deficit in the first six months of 2001.
During its meeting in New York Oct. 2-3, executive board members tried to put a happy face on the latest crisis. They talked about a re-emerging NCC becoming leaner and more effective. Or, as Clifton Kirkpatrick, stated clerk of the Presbyterian Church (USA), said, “This is encouraging and hopeful. It’s the beginning of the rebirth for the life of the council.”
However optimistically they spoke, board members nonetheless ordered General Secretary Robert Edgar and General Manager Mary Ellen Black to make even deeper cuts in the budget.
After accountants revealed in 1999 that the NCC had spent beyond its means for years – a total of more than $6 million in red ink – the NCC then took immediate steps to stop the bleeding. The NCC, having maxed out the principal it could raid from its reserves, began tightening its belt. But the budget cuts to date are miniscule compared to what Edgars and Black are ordered to propose before January 1.
To maintain programs at their current level during the first six months of 2001, the NCC would have to spend $4.6 million. But income for the six months is expected to be only $2.85 million. That requires budget cuts of nearly $1.8 million – 38.4 percent of the current spending.
There’s no more cushion. Philip Young, a PCUSA delegate who is treasurer of the NCC and a key figure in helping the executive board face reality, says reserves cannot be tapped again to prolong deficit spending.
The latest estimate – a figure that could fluctuate because of ongoing assessment of how the NCC and Church World Service might divide shared assets – is that the NCC has an investment portfolio worth $3.2 million. But Young said none of the principle can be used to shore up the revenue shortfall. What’s left is restricted.
The bleak picture comes after the NCC struggles to complete a $2-million campaign so that its 1999 books can be closed with revenue and spending balanced. In fact, 1999 is balanced only on paper because the income includes an unpaid $600,000 pledge from the United Methodist Church. The NCC is waiting to see whether the Methodists will come across with their money. Several Methodist leaders are not at all sure that it is wise to keep pouring money into the NCC.
The quadrennial conference of the United Methodist Church in June produced a conservative wave – including election of new bishops – that may have reduced the Methodists’ historic enthusiasm for the National Council of Churches.
Meanwhile, the Presbyterian Church (USA) has anted up the largest bailout gift to date – a total of $500,000.
Kirkpatrick and John Detterick, executive director of the General Assembly Council, helped persuade the Office of the General Assembly and the council to underwrite the NCC’s excesses.
Kirkpatrick’s office paid its $100,000 pledge shortly after the 2000 General Assembly met in June. The $400,000 was paid recently, after the council reneged on one of the conditions required for releasing the money. The council had said it would not pay the $400,000 until the entire $2 million was assured.
But, according to NCC documents, the United Methodist Church, which pledged a total of $700,000, has paid only $100,000 – half of what was reported to the General Assembly Council by Detterick – and there is no guarantee that the remaining $600,000 will be paid.
Edgars told the executive board that he believed Methodist finance and mission agencies will approve – and pay – the $600,000 in November. Young had previously told the General Assembly Council that the Methodist money was iffy, partly due to the denomination’s conservative backlash.
Securing the Methodist pledge is critical for the NCC to continue to hang on. Without that $600,000, the NCC will be in a cash-flow crisis immediately, Young says.
In addition to the bailout fund, the NCC has tried to bolster annual support from member communions, but that, too, has lagged. In 1999, 24 of the 36 denominations made “dues” payments to what’s known as the ecumenical commitment fund. The 1999 total was $1.47 million, a decrease from $1.57 million in 1998. Through September of this calendar year, only 18 of the denominations have made a commitment and total pledges are $1.28 million.