Today's post is the second in a two-part series by UM & Global blogmaster Dr. David W. Scott, Director of Mission Theology at the General Board of Global Ministries. The opinions and analysis expressed here are Dr. Scott's own and do not reflect in any way the official position of Global Ministries.
As discussed earlier this week, it is highly likely that there will be a significant reduction in the amount of apportionment money at all levels of the church in the future, due both to proposed reductions in general church apportionments and to protests and possible division in the denomination.
This situation naturally begs the question: What are the possible consequences of this reduction in apportionment funds? I will look at the range of possibilities on two levels: institutions and programs.
Apportionment money goes to support a variety of institutions – some components of the church itself, like annual conferences; some ministries of the church, like boards and agencies, church camps, and collegiate ministries; and some relatively independent but still church-supported organizations, like colleges, hospitals, and social service providers.
One possible impact on these institutions could be that the church (or churches, if there is a division) could decide to reduce the number of institutions it supports that are doing similar work. Thus, the UMC could reduce the number of supported seminaries or the number of episcopal areas, for instance.
The future of agencies no longer supported would vary – loosely controlled agencies like seminaries, hospitals, or colleges could try to continue on their own without church funds. Some might succeed; others likely wouldn’t. Portions of the church like episcopal areas or annual conferences would need to consolidate down to a smaller number.
Another possible consequence could be that the UMC (or its successors) could consolidate institutions with dissimilar but related functions. This option is most likely for general church boards and agencies, where reduced general church apportionments could lead to the return of something like Plan UMC, but this option could also play out at the annual conference level. The idea would be to try to reduce spending through shared services, fewer staff, fewer board members, shared facilities, etc. The amount of savings realized may or may not be sufficient to prevent other types of impacts, but this possibility would likely be combined with other types of cuts.
The model might even look like the unitary board model common in other smaller denominations, wherein the denomination has one board with various departments instead of multiple separate boards and agencies.
A third possible consequence could be that annual conferences or the general church decides to stop supporting institutions that do certain types of work. The church could choose to focus on or prioritize some forms of work and cease funding for others. Again, the implication for the institutions no longer receiving church funds would depend on how closely tied they were to the church and how significant church funds were for covering their overall operating expenses.
A fourth possible impact is that the church (either general church or annual conferences) could expect church-supported institutions to rely more on other sources of funding, perhaps direct giving, grants, or fee-for-service arrangements. This option is most likely for relatively independent church-supported institutions and ministry organizations.
This may or may not be a realistic expectation, depending on the type of institution, the type of ministry it does, and its previous experience with other forms of funding. It is unrealistic to expect an institution that has previously relied entirely on apportionment money to suddenly self-fund, but church institutions like hospitals, colleges, seminary, camps, and social service agencies with previous experience with other revenue streams may be more successful. Such a decision to push for greater institutional self-support may end up being a de facto decision to cut programming at those institutions.
Whether or not it impacts the programming of institutions, the decision to reduce church financial support of institutions will also have the effect of reducing church control of institutions. Control usually follows money, and less financial support likely means less control. That may or may not be a bad thing, either from the church’s perspective or that of the institution.
The final option for the church (either general church or annual conferences) would be to keep the same set of institutions but to expect them to do less, since they would be receiving less funding. That leads to the second level of implications: the programmatic level.
For any institution impacted by the reduction in apportionments, there are a few ways to cope with reduced funding: reducing overall business costs, doing less of the same programs, and doing fewer programs.
One main way of reducing overall business costs is by increasing efficiencies within the institution – finding cheaper paper suppliers, automating tasks, outsourcing IT support, etc. Due to the general business climate and specific financial pressures may church-related institutions have faced in recent years, the search for greater efficiency is already well underway. It is unlikely that institutions could realize a cost savings of 15% (the proposed reductions for some boards) just through greater efficiency.
The other way in which contemporary organizations reduce their overall business costs is by shifting the costs of business onto their employees. This is a general trend in American business and is carried out in many ways – changes to benefit packages, the shift from defined benefit to defined contribution pensions, the use of more temporary as opposed to long-term employees, etc. There may be moral reasons why this form of cost-savings is unsavory to the church, but such proposals can often be presented in financial terms that obscure the impacts on employees.
The second programmatic option is to do less of the same thing. Under this option, institutions continue to conduct the same sorts of program, but spend less on them by operating these programs at lower levels – fewer clients served, less staff support, fewer scholarships given, fewer visits by the DS, etc.
Lower levels of inputs likely produce lower levels of outputs and outcomes, though the correlation between inputs and outputs is not always linear. Some programs may have outcomes that depend upon a certain scale, and for these, doing less of the same thing may result in a reduction in outputs that is proportionally greater than the reduction in inputs.
Some programs may also have a minimum size that they need to function based on staffing levels, physical space, or other criteria. There comes a point at which it is not possible to do less of certain programs and still do them in any meaningful way.
When that point comes, it leads to the third possible programmatic consequence: doing fewer programs. Institutions may decide to cut programs because they lack the funds to sustain them at sufficient levels or because they decide to focus and prioritize elsewhere. That saves the institutions money spent on salaries, supplies, services, etc, but means the church no longer try to prevent malaria or support ethnic new church starts or do whatever else happened through shuttered programs.
Again, the church, both at the annual conference and general church levels, is likely to employ multiple of the above strategies for addressing the reduction in apportionment funds. Especially if there is church division, multiple strategies will be necessary.
Moreover, because of the very wide array of church-financed institutions and programs and because of the large collection of decision-making bodies for these institutions and programs, it is impossible at present to say how reductions in apportionments will play out, either in total, or in any particular field.
What is certain, however, is that the connectional and financial troubles of The United Methodist Church as a whole will have dramatic and deleterious consequences for its connectional institutions and ministry programs.