The draft of the 2013-15 budget for the Episcopal Church includes an almost $3.8 million draw from the principal of the church’s endowment to fund a development office.
Drawing upon the principal of an endowment is a practice that budget makers generally frown upon, so one would like to believe that the executive team at Church Center headquarters, which has advocated this expenditure, and the Executive Council of the church, which supported it, is fairly certain that it will succeed.
No public case has been made for this expenditure to my knowledge, and if one exists, we would be happy to publish on the Café.
There is, however, information in the public domain, that suggests this expenditure may be risky.
The forerunner of the development office was the Mission Funding office. The last two three-year budgets of the Episcopal Church indicate combined expenditures of more than $2.5 million on mission funding. I am told by people who are deeply knowledgeable about the budget that in that six-year period, the office secured donations of $355,000—a net loss of more than $2.1 million.
One can argue that one cannot predict the performance of a development office with a budget of more than $1.2 million per year based on the track record of an office with a budget of $400,000 to $500,000 per year. But there are other warning signs.
In April 2010, the Executive Council’s Finance of Mission Committee created a task force of five development professionals, convened by Sandra Swan, former president of Episcopal Relief and Development to respond to a proposal that had been made to Executive Council to “write a Mission Statement for an Office of Development and to develop a Position Description for a Director of Development (or similar title) for The Episcopal Church.”
The other members of the task force were Angela Daniel, director of development at the Heathwood Hall Episcopal School, Columbia, South Carolina; Fiona Hodgson, campaign director for the United Nations International School in New York; Suzanne Mink, director of philanthropy at the Washington National Cathedral and Greg Movesian, canon steward at St. John’s Cathedral in Denver.
In a nine-page report, they reviewed the history of the Mission Funding office, assessed the readiness of the church to undertake a major development initiative and raised the following strategic questions:
• Given the decision by General Convention in 2009 to significantly reduce the requested funding for the Mission Funding Office, why should that decision be reversed by Executive Council and more funds allocated to this effort?
• With significant staff reductions having recently taken place, what is the rational for creating a new Office of Development at this time?
• Is The Episcopal Church willing to adopt a comprehensive Strategic Plan that lays out limited strategic priorities for the next few years, and commit to abiding by those plans in order for a fundraising program to have clear guidance and sufficient time for success?
• Is the Presiding Bishop prepared to affirm strategic priorities adopted by The Episcopal Church as well as spend considerably more time in the cultivation and solicitation of major gifts?
• Given the fundamental role of the local congregation in the formation and nurturing of members of The Episcopal Church, should fund raising be undertaken at the diocesan and congregational level rather than at the curch-wide level? If so, would this not fall under the purview of the Stewardship Officer?
The subcommittee then made the following recommendations
1. Do not proceed at this time with the creation of an Office of Development and the appointment of a Director of Development and attendant staff.
2. Separate the work on the Archives Relocation Project from Mission Funding; allow the results of the feasibility study to inform and redefine the scope of the Archives project. Return to Archives the funds awarded by General Convention to the Archives.
3. Complete a comprehensive Strategic Plan for The Episcopal Church and obtain concurrence from all elements of leadership of the church: Executive Council, House of Bishops, General Convention. Based on that Strategic Plan, re-define the strategy, goal, name, approach and focus of any major church-wide fund raising initiative.
4. Require the Mission Funding Office to suspend its fundraising activity. Should a church-wide effort be deemed appropriate, do not institute a development program until its fundraising objectives can be fully developed into funding cases as a result of the Strategic Plan described in #3 above, with budgets, management, timelines and sustainability clearly documented, and the cases presented to church leadership for approval.
5. Discontinue the active solicitation of prospects in support of Mission Funding; once a Strategic Plan has been approved and if a church-wide development office is required, a fundraising staff should then focus its efforts on the cultivation of prospects and in the evaluation of the giving potential and interests of the prospects in-hand.
6. Proceed with a church-wide fundraising program only when all elements of the Best Practices of Major Development Programs (as defined above) are in place, including full commitment of leadership, oversight by governing body, sufficient experienced professional staffing and investment of institutional finances, and solid written case for support stressing urgency and uniqueness and based upon approved church-wide Strategic Plan.
The subcommittee’s report was never presented to the entire Executive Council, although it was posted to the council's extranet.
It isn't clear why the conclusions of the report were disregarded when the budget was put together. Whatever the reasons, it seems prudent, at this point, for the church to examine this issue in greater detail before consenting to an expenditure of $3.77 million plus the interest the money would earn if it were left in the endowment.