What seems the biggest gamble in the 2013-15 budget has been largely overlooked in the initial round of commentary. On line 6, page 3 of the draft budget, the church proposes to spend $3,766,300 from the principal of its endowment for a development office. Assuming even a modest return on an investment of a sum of that size, the church would have to raise about $4 million just to break even in this triennium. I am not beyond being persuaded that this could turn out to be a good investment. But I really need someone to make the case, especially considering that the Development Office, previously known as the Mission Funding office, lost money during the last triennium, and alienated numerous bishops by showing up in their dioceses to cultivate donors unannounced.
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In my years as a fundraising consultant, I would generally not have advised an organization to fund development operations out of endowment principal. However, in the case of the Episcopal Church, we are at the point where we have a rapidly closing window to engage in major fundraising across the whole institution and I think we need at least to try. Frankly, if we were really serious about the kind of fundraising we want (the last time I heard about this, TEC had a goal of raising $250-300 million over the next decade), we should be spending at least $2.5 million annually even to have any hope of succeeding. General Convention has shown it is unwilling to invest those kinds of resources, so perhaps this is the only option. The Mission Funding Office was not appropriately resourced from the start so it is not surprising that it did not succeed. (In the interest of full disclosure, I currently serve on the Standing Commission for Stewardship and Development.)
I know that New York law now allows institutions to spend endowment principal - but it also requires all expenditures from endowment - not just principal to be judged prudent and there are very specific criteria about what that means. I would be stunned to discover that hiring a development director was consdiered a "prudent" reason to invade principal.
I think it is another attempt at funding a Development officer and work - after the last aborted attempt did not fly due the officer approaching big givers in Dioceses without talking to the local bishops.
Lauren, all I know is that it is a draw from the endowment to create a development office. I don't have more information than that.
Jim, I see this in the budget but don't know what it's really for. Can you tell where to find more information on this?