News Roundup Links - April 3, 2023

The following are summaries of and links to significant stories related to mission and the worldwide United Methodist Church from the past month.

Connectional Table, Standing Conference on Central Conference Matters support regionalization: Both the Connectional Table and the Standing Conference on Central Conference Matters met at the end of February, and both groups lent their support to efforts to promote greater regionalization in the church. The two groups will work with each other and members of the Christmas Covenant to develop a consensus approach to regionalization legislation at General Conference in 2024: https://www.umnews.org/en/news/international-group-pursues-regionalization https://www.umnews.org/en/news/group-plans-for-budget-cuts-regionalization

Northern Europe and Eurasia Central Conference approves Russia, Estonia leaving The United Methodist Church, denies local standards on sexuality: At a special session on March 18, the Northern Europe and Eurasia Central Conference approved plans for the Eurasia Episcopal Area and the Estonia District of the Estonia Annual Conference to leave the UMC. Estonia will depart through a specially negotiated process this summer. The Eurasia Episcopal Area is following a process laid out by the Book of Discipline which will be complete in 2025. At the same time, the central conference voted down a proposal that would let annual conferences set their own standards on same-sex marriage and ordination, which was strongly supported by the conference’s Norwegian and Danish members. https://www.umnews.org/en/news/eurasia-and-estonia-begin-exit-from-church https://www.metodistkirken.no/ekstraordiner-sentralkonferanse-avholdt

A portrait of Methodism in Kyrgyzstan: Despite the decision by the Eurasia Episcopal Area to leave The United Methodist Church (see above), UMNews has published several news stories and a photo essay about the church in Kyrgyzstan. The pieces are a good portrait (literally and figuratively) of Methodism as it exists in many contexts: small and marginalized, but committed to evangelism and benefitting the community. https://www.umnews.org/en/news/young-people-drive-church-growth-in-kyrgyzstan https://www.umnews.org/en/news/students-find-home-unity-at-bishkek-church https://www.umnews.org/en/news/dream-brought-comfort-amid-warning-of-invasion https://express.adobe.com/page/Q4IivpJ9M9yjk/

Bishop Mande Muyombo discusses the future of the UMC in Africa: In an episode of the “Pod Have Mercy” podcast, Revs. John Stephens and Matt Russell of Chapelwood UMC, Houston, interviewed Bishop Mande Muyombo of the North Katanga Episcopal Area in an insightful conversation about the state and future of the UMC in Africa.

Standing Committee on Central Conference Matters discusses new African bishops: At their meeting in February, the Standing Committee on Central Conference Matters discussed plans to add five new bishops for Africa. That plan, in the works since 2016, is facing financial challenges. No decisions have yet been made on how to proceed. https://www.umnews.org/en/news/challenges-face-plan-to-add-5-african-bishops

Leaders in the Philippines push back against disaffiliation: After a conflict in St. John United Methodist Church, Quezon City, in January, Filipino/a bishops published a letter clarifying that disaffiliation was not an option in the central conferences under UMC church law. https://um-insight.net/in-the-church/umc-future/new-developments-shape-umc-unity-in-the-philippines/

New leaders selected for German, Norwegian United Methodist mission boards: Bishop Harald Rückert has selected Rev. Olav Schmidt as the new leader of EmK WeltMission, as Schmidt’s predecessor, Rev. Frank Aichele, returns to parish ministry. https://www.emk.de/meldung/von-berlin-ueber-malawi-nach-wuppertal In Norway, Anne Ng Foster has been selected as the new head of Misjonselskapet, replacing Øyvind Aske, who is retiring. https://www.metodistkirken.no/ny-internasjonal-leder-er-ansatt

UMCOR and EmK WeltMission respond to typhoon in Malawi and Mozambique: Both Methodist mission agencies have provided support to those impacted by the powerful Hurricane Freddy. https://umcmission.org/umcor-international-latest-responses/ https://www.emk.de/meldung/freddy-bricht-alle-rekorde-und-verwuestet-malawi

GCORR discusses work in central conferences: At the March board meeting of General Commission on Religion and Race, “Board members from Central Conferences shared stories about the ongoing work and challenges they are facing within their contexts, including the deeply-rooted issue of tribalism in Africa.” The GCORR Board also celebrated the formation of a Congo Central Conference Commission on Religion and Race Steering Committee and the work of the National Conference Commission on Religion and Race in the Philippines. https://www.gcorr.org/news/press-release-gcorr-board-of-directors-gathers-in-san-antonio

Africa University Board meets in Tanzania: The Africa University Board of Directors has its regular in person board meeting in March in Tanzania, a departure from its usual practice of meeting on the Africa University campus. The board meeting was a reminder of the continent-wide impact of the United Methodist institution of higher education. https://aunews.africau.edu/?p=2671

Poor Albanian farmers give back to mission: Rev. Urs Schweizer of Switzerland wrote a piece describing a mission project to provide poor, rural Albanian farmers with seed for crops. Despite their own financial challenges, the farmers choose to give back a portion of their harvest to serve the Miss Stone Center, a tangible example of “mission from the margins.” https://www.umnews.org/en/news/when-the-poor-share-what-they-have

Wings of the Morning back in the skies: The critical aviation ministry of the North Katanga Episcopal Area is back flying after repairs to its plane. Those repairs were conducted with the support of the West Ohio Annual Conference. https://www.westohioumc.org/conference/news/foundation-exceeds-wings-morning-fundraising-goal

The Financial Future of Connectional Ministry

Today's post is by UM & Global blogmaster Dr. David W. Scott, Mission Theologian 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.

Last week, I described the evolution of the current centralized apportionment system that The United Methodist Church uses to fund its connectional ministries. The apportionment system replaced an earlier system of direct solicitation by individual boards and agencies. I also indicated that the apportionment system may not last forever, and that this past can help us think about the financial future of connectional ministry in the UMC.

While the apportionment system has not yet ended, apportionments clearly cannot and will not be the same sort of financial engine for denominational agencies as they have been in the past. The UMC has passed “peak apportionment,” the point at which increased per capita giving by United Methodists in the United States made up for a decreasing number of US members. An impending denominational split and the impacts of the COVID-19 pandemic have made connectional giving trends worse, but the underlying financial dynamics towards lower apportionment giving exist independently of these two complicating factors.

Lower levels of apportionments can potentially have a lot of different impacts on the connectional ministries of the UMC. Back in 2019, I looked at the possible consequences for connectional institutions and ministry programs. There have indeed been steep cuts at many of the agencies in terms of personnel and programs since I wrote that piece. I also explored the possibilities of reconfiguring the apportionment system to create different options for the connectional ministries that congregations and annual conference support, using the metaphor of content bundling.

Yet regardless of what other strategies denominational agencies may or may not adopt to respond to lower apportionments, the agencies are moving towards greater soliciting of direct gifts from United Methodist individuals and congregations. Recent Giving Tuesday appeals in your United Methodist-related social media feeds are just the tip of that trend. If money will not continue to come from apportionments, at least in the same amounts, then the agencies will look elsewhere, and direct giving is one of the foremost places they are looking.

Viewed through the lens of the history recounted last week, this move towards denominational agencies soliciting greater direct giving is a move back towards an older, pre-apportionment system of giving, in which denominational agencies competed with one another to solicit direct gifts from individuals and congregations. Therefore, reflecting on that older, pre-apportionment system can help us think about what a move away from apportionments and towards direct giving might mean for the future of connectional ministries in the UMC.

In particular, as we go back towards a system of soliciting direct gifts, it is worth thinking about how that move will reshape relationships in the denomination: relationships among agencies, relationships between agencies and the denomination’s congregations and members, and relationships between agencies and conferences.

As I explained about the pre-apportionment system last week, financing connectional ministry through direct giving is a system that puts denominational agencies in financial competition with one another. Yet, there has been a significant move towards collaboration between the boards and agencies in the past two decades, and the desire for agency cooperation remains strong among denominational leaders.

How will a return to substantial direct giving as a funding source impact the more collaborative relationships that have been built up among agencies? How can the denomination foster relationships among the agencies that emphasize collaboration and do not become merely competitive? If finances will not be the lever to push agencies towards collaboration (and indeed will push in the other direction), what levers will push towards collaboration?

The leading group of critics of the pre-apportionment direct giving system was laity, especially businessmen whose money the various church agencies sought to obtain. Those laity found the appeals for money excessive and worried about the efficiency of connectional ministries. Perhaps by the 21st century United Methodists in the United States have become a bit more inured to a large number of charitable solicitations, but the desire for missional efficiency remains strong.

How does an increase in direct solicitation develop greater responsiveness by agencies to individual and congregational missional priorities without overwhelming United Methodist individuals and congregations with a dozen separate financial appeals? How can agencies present multiple requests for money while assuring potential donors that those moneys will be used efficiently and effectively?

Finally, there are the relationships between agencies and various levels of conferences. Annual conferences were much more important financial players in the pre-apportionment system. Are annual conferences prepared to again take a larger role as intermediaries between the agencies and congregations? What sorts of new tensions and conflicts would that introduce to annual conferences, which are already facing a number of tensions and conflicts?

The move to the apportionment system also gave General Conference much more control over what had previously been semi-autonomous agencies. This increased control assured United Methodists that organizations that used the United Methodist name would be accountable to the highest authority in The United Methodist Church. How can the General Conference continue to exert control over the agencies for the sake of coordination, accountability, and efficiency if it controls a smaller percentage of agency budgets?

I do not mean to depict a shift away from apportionments and towards direct giving as all bad. As indicated last week, there are problems with the apportionment system. There are also advantages to direct giving. It creates more engaged givers. On the other hand, there are advantages to apportionments, and there were disadvantages to the system of direct giving that preceded the apportionment system.

Rather than trying to make out one financial system as better or worse than the other, my intention is to point out that The United Methodist Church is in a time of transition in how it finances its connectional ministries. If we can be aware that we are in a time of transition and aware of what the challenges and advantages are in various systems, then perhaps we can be mindful and intentional in trying to best capitalize on the advantages and avoid the disadvantages of the systems we develop.

A Brief History of Apportionments

Today's post is by UM & Global blogmaster Dr. David W. Scott, Mission Theologian 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.

When the Missionary Society of the Methodist Episcopal Church (MEC) was officially adopted by General Conference in 1820, it received no funding from the denomination. Instead, the Missionary Society was supported through direct gifts from individuals and congregations. The Missionary Society was the second denomination-wide agency in American Methodism. The Book Concern (predecessor of today’s Publishing House), the one older agency, was funded entirely by sales of books, as it still is today. Indeed, at that time, there wasn’t any central process of collecting denomination-wide funds.

The apportionment system, which so dominates the current United Methodist Church, took a long time to develop, longer than most of the agencies it supports. Indeed, it did not solidify until 1924, over a hundred years later than the earliest agencies. And today, nearly another hundred years later, there is no guarantee that apportionments will endure indefinitely.

This post will briefly review the process of the development of apportionments, and a subsequent post will examine what lessons that history offers for the financial future of connectional ministries in the UMC.

While there is some variation across predecessor denominations to the UMC, in their early histories, denominational agencies such as the Missionary Society of the MEC functioned as voluntary associations that operated relatively independently from General Conferences, including in financial matters. In the MEC, it was not until 1872 that the General Conference sought to exert much direct control over boards and agencies, and that control was still not focused on finances.

Funding for denominational agencies was often coordinated by annual conferences, not General Conference. Annual conferences would designate specific months for collections for specific benevolent ministries of the church. This helped give some order for congregations and individuals as givers, though congregations and individuals still made the real financial decisions about connectional ministries.

Moreover, this system of monthly foci for giving did not prevent local church benevolent societies from constantly collecting money for their specified area of ministry, nor did it prevent special appeals for finances in local churches by visiting agency staff persons or missionaries.

The first iteration of apportionments was as a system of fundraising goals set by individual agencies in the latter decades of the 19th century. Early apportionments were merely a request by an agency that each congregation raise a certain amount for the work of that agency. They were not approved by conferences and did not carry the weight of denominational polity behind them.

Absent central coordination, financial competition among boards and agencies increased throughout the late 19th and early 20th century as Methodists continued to create new agencies, each of which would solicit direct contributions from Methodist individuals and congregations. Despite whatever pressures towards collaboration in ministry there might have been, financial concerns fostered a lot of intra-Methodist competition. Ministers and especially laity became increasingly exasperated by the slew of fundraising appeals they were bombarded with.

This led to the formation of the Commission on Finance in the Methodist Episcopal Church in 1912, promoted by the Laymen’s Missionary Movement. Though ultimately ineffective because of its dependence on the agencies it was to regulate, it was an early attempt at central coordination of the finances of denominational agencies.

Then came the Mission Centenary in 1919. One aspect of the Centenary was a fundraising campaign. The Centenary fundraising campaign was somewhat unique in that it was a joint campaign on behalf of the Board of Foreign Missions, the Board of Home Missions, and the Board of Education of the MEC. These three boards agreed to work together on the fundraising campaign and then split the receipts according to a pre-determined formula.

While the fundraising campaign did not collect everything that had been pledged, this centralized approach to fundraising and division of denominational dollars was a relative success. That experience of centralized fundraising, along with concerns about debts incurred by the Board of Foreign Missions, led to the creation in 1924 of the World Service Commission, forerunner of the General Council on Finance and Administration, and the centralized denominational apportionment system.

Instead of each agency competing for local church and individual giving, the denomination as a whole asked each congregation to collect a certain amount in apportionments, which would then be divided among the agencies according to formulas established by the World Service Commission.

A centralized financial system allowed General Conference, both directly and through the World Service Commission, to promote ideals of efficiency, accountability, and coordination in the business of connectional ministry. Interestingly, General Conference 1924 rejected a proposal to create a single denominational agency, feeling that the goals of efficiency and accountability could be sufficiently realized through central financial control without requiring central administrative or programmatic control.

There were downsides to the apportionment system. It allowed agencies to become somewhat disconnected from the perspectives and desires of their constituencies, since they no longer needed to respond to pressures from local churches and average individuals to ensure their on-going financial support. Instead, denominational insider perspectives and the perspectives of large donors became more influential, since these were the groups who did have a significant impact on the agencies’ bottom lines.

Moreover, the apportionment system did not completely end the process of direct fundraising by agencies, and developments such as The Advance in 1940 created new opportunities for direct, second mile giving by congregations and individuals. The Advance, both in its denomination-wide and annual conference forms, has become a particularly important channel for the flow of connectional funds outside the apportionment system.

Nor did apportionments completely end board and agency competition, as anyone who has been around the denomination long enough is aware. Nevertheless, the apportionment system shifted the site of much of that competition from local churches to internal denominational mechanisms such as General Conference, the General Council on Finance and Administration, and the Connectional Table (and the predecessors of these latter two). In this way, much of the competition was only visible to denominational insiders and not the average member of the denomination, lay or clergy.

Whatever its weaknesses, the development of the apportionment system was revolutionary. It assured boards and agencies that their core functions would be funded, and it simplified giving for congregations and individuals. The apportionment system has become a robust and central means of funding connectional ministries in American Methodism. Although initially adopted by the MEC, this system of centralized denominational financing for connection ministries through apportionments persisted through the various of Methodist mergers of the 20th century, becoming the backbone of connectional ministry financing in the UMC.

But nothing lasts forever. The apportionment system is already facing pressures, and these are not likely to go away any time soon. As United Methodists contemplate the situation of denominational agencies now and the possible financial futures of connectional ministries, this history is highly relevant. Another post next week will explore that topic further.

Recommended Reading: UMC Agencies Commit to Net-Zero Emissions

Yesterday, on Earth Day, 11 of The United Methodist Church's boards and agencies announced a joint commitment to move towards net-zero emissions by 2050. See the text of the joint announcement, the joint press release, and the UMNS article about the announcement. The announcement represents the first such commitment by denominational mission agencies to a net-zero goal. It reflects a growing realization of the dangers caused by climate change and a growing recognition of the importance of climate care as a form of Christian mission and ministry. The commitment stems in part from the ministry of Rev. Jenny Phillips, who has written about the importance of "zero-emission mission" in a chapter in a newly-released book, The Practice of Mission in Global Methodism, edited by UM & Global blogmaster David W. Scott and Darryl W. Stephens.

What Happens If GC2021 Does Not Happen? Part II: Budgets, Boards, and Bishops

Today's post is by UM & Global blogmaster Dr. David W. Scott, Mission Theologian 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 explained last week, there is real reason, based on the best available expertise on how the coronavirus pandemic may play out, to expect that the General Conference delayed to August/September of 2021 may not happen. If true, this further postponement would raise significant questions about how the denomination will address pressing problems and keep the machinery of the denomination running. This piece will examine what a further delayed General Conference would mean for denominational budgets, boards, and bishops.

Budgets
General Conference sets the denomination’s quadrennial budget, and this power is reserved to this body. Other groups, especially GCFA and the Connectional Table, have a role in proposing a budget to General Conference, and GCFA has a good deal of authority to administer apportionment money and set payout rates based on the budget, but General Conference makes the budget. No General Conference in 2021 means no updated budget for the denomination.

It is easy enough to roll over current budgets, and GCFA has indicated that they will continue to operate based on the previous quadrennium’s budget until General Conference convenes in 2021, though they recognized that this decision was taken on shaky authority. Nevertheless, for a variety of reasons (membership declines, denominational division, the pandemic, the economy) the UMC’s budget going forward will need to be different and smaller than the previous quadrennium’s budget.

What then happens in this situation? Does the UMC continue to operate based on percentages of the 2016–2020 budget, since that was the last one approved, even if it does not reflect the financial realities of the church? This would impose proportional cuts on all budget lines. Or is there some move to try to prioritize within these cuts? If so, who will have the authority to make these difficult decisions?

Boards
Board members for most denominational boards and agencies and chosen following General Conference, though not directly by it. General Conference does appoint members to certain denominational committees, such as the Judicial Council, University Senate, and study commissions. For now, these boards, agencies, and committees have asked their members from last quadrennium to continue to serve until new members can be elected following General Conference 2021.

But that becomes more difficult the longer the situation endures, especially if denominational division happens in the meantime. If people are no longer United Methodist, they are presumably no longer serving on United Methodist boards, agencies, or committees. Even for those who remain United Methodist, life circumstances may change in a way that prohibits members from continuing to serve. In some cases, changed life circumstances (new jobs, retirement, shifted family responsibilities) may make some members unwilling to continue to serve. In other more severe instances, circumstances (death, major illness) may make some members unable to continue to serve.

Boards typically have some amount of fluctuation in membership, and in normal times, they are set up to handle that fluctuation. But if a significant portion of the membership of the board does not continue, that can raise issues that impact the board’s ability to function, including quorum, officers, etc. Especially if responding to significant budget reductions or selecting new leadership, a fully functioning board can be quite important to an organization. Boards and agencies are likely to not wait indefinitely to replenish their membership if needed, even if this means departing from convention.

Full membership is potentially quite important for the Judicial Council as well. Although there are alternates for the Judicial Council, it is still possible that the Council could end up short of members before the next General Conference. And if there are significant judicial issues surrounding denominational division, it would be very important to have a fully functional Judicial Council. The alternative is that judicial review becomes less significant in the denomination.

Bishops
General Conference does not elect bishops (at least not anymore.) But Jurisdictional and Central Conferences, which do elect bishops, are set to happen after General Conference. No General Conference likely means no Jurisdictional or Central Conferences. Jurisdictional and Central Conferences may also face the same sorts of pandemic-related restrictions that could scuttle GC2021.

If Jurisdictional and Central Conferences are further postponed, it raises questions for bishops’ tenure and replacement. In most instances, active bishops have agreed to postpone their retirement and continue to serve through 2022, when successors elected at delayed Jurisdictional and Central Conferences could begin their terms.

But bishops may not be willing to do the same until 2023 or 2024. And some active bishops may leave with the WCA. This may leave episcopal vacancies. How would they be filled? Would remaining bishops then cover expanded territories? Would bishops be called back out of retirement?

Alternatively, significant numbers of churches in an episcopal area might leave with the WCA, leaving a bishop supervising a much smaller number of remaining churches. How could episcopal areas be reconfigured without Jurisdictional or Central Conferences to do so?

The upshot is that a further delayed General Conference may have a significant impact on the extent and quality of episcopal leadership in the denomination over the next four years.

Two Takeaways
On all of these issues, and on issues surrounding denominational division, authority and leadership will be devolved to lower levels of the denomination, whether that is individual churches deciding to leave with the WCA, GCFA and the Connectional Table making budget decisions, boards and agencies deciding how to fill board vacancies, or district superintendents stepping up to cover some duties during episcopal transitions. As part of this trend, local churches will probably have to get along with less support from the denomination at a time when they are already under great strain from the pandemic. Many pastors may decide to retire early or leave ministry as a result.

The corollary of this devolution of leadership is that not just General Conference, but the Book of Discipline will be undercut as a source of authority. The Book of Discipline did not anticipate and made no provision for many of the extraordinary circumstances in which the church now finds itself. That means that people will need to find ways to run the church in the next couple of years that skirt around or, in some cases, flat out ignore what the Book of Discipline says. A Judicial Council hobbled by incomplete membership would be less able to resist this trend.

Once the Book of Discipline becomes something that can be ignored in certain circumstances, though, a precedent has been set. It will become easier to ignore the Book of Discipline in the future, even under less dire circumstances.

That scenario of a diminished Book of Discipline is likely unavoidable. But it is another sign that, even when things return to “normal” post-pandemic, it will no longer be business as usual as it was before the pandemic. We—individuals, churches, and as a denomination—will bear the impacts of the present pandemic on us for a long time to come.

A Primer on UMC Assets: What Does It Mean to Divide Assets?

Today's post is 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. Dr. Scott is neither a lawyer nor an accountant, and thus the following should not be interpreted as legal advice.

Having examined the assets held by various legal entities within the system of The United Methodist Church, I want to examine one of the hottest issues surrounding church assets at this moment in the life of the denomination: asset division. This post will examine the different possible interpretations of the term “asset division,” and a subsequent post will examine considerations and challenges that would affect any process of asset division.

First, when talking about asset division, it is important to specify which level of assets is being discussed. As this series has shown, assets are held by local churches, annual conferences, jurisdictions and central conferences, church-affiliated institutions, apportionment funds, and boards and agencies.

Technically, allowing local churches to depart with their property is a form of asset division. Assets that were previously tied to the UMC through the trust clause are divided among successor bodies (based on the choices of those congregations or their annual conferences). The same is true for annual conferences, jurisdictional conferences, and central conferences – any time one of these departs the denomination with their assets, it is a form of division of assets.

Still, when most United Methodists refer to dividing denominational assets, what they are talking about is general church assets. Yet even within that clarification, there are important questions about what a “division of assets” actually is: What assets are included? What does it mean to divide them?

People often assume that general church assets are equivalent to assets owned by the agency, but it’s worth pointing out that there are actually two groups of assets that might be termed “general church assets.” There are the assets of the boards and agencies. But there are also collected but not yet disbursed or sent apportionment fund monies, and these count as general church assets, too. In their summary of general church assets, GCFA includes both groups of assets – agency assets and apportionment funds on hand

According to a GCFA report, there is a net of $32 million ($85 million in assets minus $53 million in liabilities) in yet-to-be spent apportionment funds in GCFA bank accounts. That’s not because GCFA is hoarding apportionment money or is collecting more than is needed. It’s because sending money through the system takes time, and it’s typical for any bureaucratic organization to have more money on hand than they intend to spend in the next week. That’s sound fiscal management.

I have examined board and agency assets previously, but to briefly summarize, these assets are divided among donor-designated assets with legally-binding stipulations on how that money can be used; endowments, wherein the interest but not usually the principle can be spent; board-designated assets, which may be earmarked to cover other legally-binding financial obligations such as pensions; property such as buildings; and undesignated funds, which generally amount to 3-4 months’ worth of operating expenses, a standard margin for a business or non-profit.

Collectively, the apportionment-supported boards and agencies have about $86 million in undesignated funds. They have around $589 million in net assets (assets minus liabilities), but that additional $500 million is either in endowments and donor-designated funds where it cannot be touched, earmarked for legally obligated pension funds, or in the form of property.

The apportionment-supported boards and agencies have about $43 million in property, though there are many different ways to calculate what the value of the property is – at cost, net book value, fair market value, insurable value. Most of that $43 million in property, however valued, is in the form of headquarters buildings.

Despite chatter about Global Ministries owning property around the world, that property is almost always held in trust for mission partners, not property that Global Ministries is free to dispose of as it wishes. It can’t just sell the church buildings of one of the United Methodist Mission Initiatives and give that money to someone else.

What this review of general church assets shows is that there are many different possible ways to determine the total value of such assets depending on what categories of assets are included and the monetary value assigned to property and other tangible assets.

Thus, determining a total amount of general church assets isn’t a simple actuarial calculation; it’s a political and policy decision. Various parties in a division of church assets will have an incentive to include or not include various categories of assets or to value them differently in ways that will help them pursue their own financial interests in the negotiations.

If the question of what assets is complicated, so too is the question of what it means to divide them. In a simplistic understanding, a certain percentage of total assets, or perhaps a certain percentage of each asset would go to each party in the negotiation. Yet that view overlooks many significant legal questions that could prevent such a simple, proportional division of existing assets.

Here again, the distinctions between apportionment funds and agency funds and between restricted and unrestricted assets are important. There are solid legal cases to be made that General Conference cannot act to take away funds already owned by the agencies as legal entities and, even if General Conference could instruct the agencies to give some of their assets to another legal entity, restricted assets could not be transferred from one legal entity to another. At the very least, restricted assets could not be divided on a proportional basis, with a certain percentage being transferred to another legal entity. These theories could, of course, be tested by lawsuits, but that course of action involves extra expense and time.

If both apportionment funds and agency funds are included in the calculations for a division, and especially if both restricted and unrestricted funds are included, that gives the departing group claim to a much larger share of apportionment funds and possibly of unrestricted funds, since restricted funds and agency funds, in general, would likely be legally required to stay with the continuing United Methodist Church. A departing group could take all the cash and leave the remaining group with the untouchable money in the bank.

Yet this distinction between apportionment funds and agency funds also yields what is the legally least risky way to achieve some division of assets: a payout. In a payout, no board or agency or other legal entity is asked to part with money they already own. This avoids the lawsuits that would challenge the legality of General Conference instructing boards and agencies to violate their fiduciary responsibility to use their assets for the purposes stated in their articles of incorporation.

Instead, an amount is earmarked out of future revenue to be given to departing groups. Since that future money has not already been committed to a particular use, General Conference is free to direct that money as it sees fits. It is clear that General Conference has this budget-setting power, and this power does not conflict with the fiduciary responsibilities of other church legal entities since it applies to future income, not assets on hand.

This is the approach that the Protocol of Reconciliation and Grace through Separation takes, and this is likely why it takes that approach. It is legally much clearer that General Conference can designate where future apportionment revenue should go than it is that General Conference can require agencies to part with money that they already own as legal entities. The Protocol earmarks $25 million for Traditionalists and $2 million of other groups out of future revenues but does not try to reassign assets already owned by legal entities in the general church.

Of course, the Protocol is not the only possible approach to a payout. My next piece will examine a variety of questions related to the process of negotiating any division of assets.

A Primer on UMC Assets: Board and Agency Assets

Today's post is 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. Dr. Scott is neither a lawyer nor an accountant, and thus the following should not be interpreted as legal advice.

Having looked last week at the range of sources of income for boards and agencies (hereafter just agencies), I will now turn to the several categories of assets an agency may hold. These categories of assets are not unique to United Methodist agencies but are characteristic of nonprofits generally. In addition to this post, the “Definitions of Assets, Liabilities, and Net Assets” from GCFA is helpful reading on this topic.

First, I will look at financial assets, since these tend to be the bulk of agency assets.

Within financial assets, there are unrestricted assets, which are financial assets that can be used for any purpose and may be stored in a variety of bank accounts or investments until they are needed. When many people hear the term “denominational assets,” this is what they think of: a bank account with money just waiting to be spent on whatever the denomination wants.

It is worth noting, though, that even though these assets are “unrestricted,” agencies may still not be free to spend them in any way they want and may not be free to give them to other legal persons at will. Agencies are still bound by the terms of their articles of incorporation, the legally binding documents that establish them as legal persons. The terms of those articles of incorporation may restrict what the agencies may do with even their unrestricted assets by stipulating that the agency exists for a specific purpose. Thus, for instance, GBHEM may not be able to take its money and begin operating a chain of frozen yogurt shops, since it is supposed to be in the business of supporting education. (I don’t know the specifics of GBHEM’s articles of incorporation; this is just a hypothetical example.)

Beyond undesignated assets, there are board-designated assets, which the board of directors has taken from unrestricted assets and earmarked for specific purposes. Again, these board-designated may be stored in a variety of accounts or investments.

In some instances, these board-designated purposes include meeting legally binding financial obligations such as paying for retirement funds. Thus, while a future board of directors could theoretically change how this money is designated, it may not be possible to re-allocate all of that money without a board or agency defaulting on its legal financial obligations. Boards of directors could not ignore these obligations without violating their fiduciary responsibility to the agency, and the agency could not ignore these responsibilities without risk of a lawsuit.

Together, unrestricted and board-restricted assets function as “reserves,” a cushion of money that allows for some fluctuations in spending and emergency expenses, in the same way that individuals often have more in their checking account than they intend to spend in the next month. GCFA recommends that all boards and agencies have 3-6 months of operating expenses in their reserves. https://www.gcfa.org/media/2084/final-report-of-reserves-task-force_nov2019.pdf If an agency is left short of reserves, it could end up in a situation where it was in danger of not being able to pay its bills.

Next, there are endowments, which are a specific type of investment wherein the principle is preserved, but the interest from that principle can be placed into unrestricted funds. Such endowments are subject to a variety of state laws, but these laws often prohibit the principle of the endowment from being spent. Thus, while the interest may be spent at the agency’s discretion, the agency may not be able to spend or give away the principle.

Agencies also have donor-designated assets, which a donor has stipulated how they are to be used. Some donor-designated assets are intended to be used within the near-term, and some of them are long-term investments, the interest of which is to be used for the purpose designated by the donor. These designations are legally binding, especially when gifts are given as part of a will. Were an agency to use a designated asset for a purpose other than that originally intended by the donor, it might be sued for doing so, especially by relatives of the person who gave them money. US law has a long and strong tradition of upholding such restrictions.

Finally, there is tangible, physical property, which includes land and buildings, but also things like computers, desks, books, etc. Without going into the details, there are different approaches to assigning monetary values to such physical property. For buildings and land, there is a difference between the “at cost” value and the fair market value. Moreover, while land and buildings may make up the majority of the physical property assets (for those boards and agencies that own them), it’s important not to forget about other forms of physical property. Finally, depreciation affects the financial value of physical property, but may or may not be included in a description of assets.

While there are conspiracy theories that agencies are secretively hiding money, a variety of information about agency finances is publicly available, including through the GCFA website. In particular, GCFA provides a report on general church reserves, a summary of General Church assets, liabilities, and net assets. GCFA also lists the at-cost value of agency headquarters buildings, for those agencies that own their own headquarters. Additional financial information about the income, assets, and expenditures can be found in agency reports or auditing statements and sometimes in IRS 990 forms filed by the agencies.

Aside from Wespath, the largest pools of net agency assets are those held by Global Ministries and UMCOR, GBHEM, and Africa University. Many of these are in the form of endowments and donor-restricted assets. Pension obligations eat up a significant amount of the non-restricted assets as well.

Thus, a large portion of agency assets across all agencies are not general assets that can be spent at will but rather assets set aside for specific, legally binding purposes. According to GCFA, the apportionment-funded agencies collectively have $589 million in net assets (assets minus liabilities). However, only $86 million of this is money that is not tied up in endowments, property, or pension obligations.

$86 million in cash is not nothing, but it is worth setting in three contexts: The first is the scope of the overall budgets of these agencies, which in 2018 was about $263 million dollars. $86 million is about four months’ operating costs in reserves, in line with what GCFA recommends. The second is the legal complexities around what agency money can legally be used for, even when it is unrestricted. The third is the over $50 billion in local church property owned by local congregations, which still represents the overwhelming majority of United Methodist assets.

A Primer on UMC Assets: Board and Agency Income

Today's post is 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. Dr. Scott is neither a lawyer nor an accountant, and thus the following should not be interpreted as legal advice.

Part of the discussions around the future of The United Methodist Church has been a possible division of denominational assets. When people talk about denominational assets, they are discussing those assets held by denomination-wide boards and agencies (hereafter agencies). This includes not only the thirteen official boards and agencies but also entities like the Connectional Table, the Office of Christian Unity and Interreligious Cooperation, and the Africa University endowment, which are also legal persons with assets and denomination-wide responsibilities.

Again, The United Methodist Church as a whole is not a legal entity capable of owning assets itself. Agencies, however, are legal persons, incorporated as 501(c)3 organizations under various US state laws, and thus they can hold assets in trust for the denomination.

This post and the following one will attempt to add some clarity to what agency assets are, where they came from, and the legal restrictions that may apply to them. First, this post will talk about where agency assets come from and the associated restrictions. A subsequent post will talk about the categories of assets and the restrictions on them.

One source of revenue for agencies is direct giving – donations made by individuals, foundations, and other entities to those agencies. Usually donations come in the form of financial gifts, but donors also may give gifts-in-kind, another way of saying that they may give tangible assets such as land, buildings, equipment, medicine, foodstuffs, etc. Sometimes these donations are made to the general expenses of an agency (or “area of greatest need”), but often they are given to support particular programs or for particular purposes, such as building up an endowment. Agencies must use donations as directed; they cannot use a donation designated for one purpose for another purpose.

Another source of revenue is investment income. Some of the donations given to agencies are invested rather than spent, and those investments generate income through interest or dividends. That investment income is treated as revenue. Income from an endowment can generally be used as the agency sees fit, whereas income from donor-designated investments must be used for the purpose designated for that investment.

A third source of revenue is business income generated by sales, fees for service, or other contract work. This source of revenue is really quite broad, because it applies to everything from the fees that GCFA charges other agencies for tech support to the income the Publishing House receives from selling books to the money that Wespath makes by managing the denomination’s investments. Business revenue is also generally available to be used as an agency sees fit (once the costs of operating that business are covered). Since the agency earns it, the agency can decide how to use it.

Agencies can also earn money through grants from foundations and governments. Grant money is almost always tied to programs, and the income received from grants must be spent on the operation of those programs. However, many grants allow a small percentage of the grant funds to be spent on overhead, so grant money can be used to offset the general costs of an agency such as office space, utilities, and senior leadership.

Most agencies, but not all, receive some money from general apportionments, the subscription fee that local churches in the US pay to receive the bundle of denominational services provided by the UMC. (For more on apportionments, see “A Primer on United Methodist Apportionments.”) While people often think of agencies as apportionment-funded, that is not true in all cases, and even for those agencies that do get apportionments, the magnitude of apportionment funding compared to other sources of funding varies. Some agencies rely almost entirely on apportionments, some have a mix of income streams, and some are not funded by apportionments at all.

Notably, the United Methodist Publishing House (UMPH), Wespath, and United Methodist Women are not and never have been supported by apportionment giving. UMPH and Wespath are self-funding through revenues generated, and United Methodist Women is self-funding primarily through the generous donations of faithful women.

The General Council on Finance and Administration and the General Commission on Archives and History are funded out of the General Administration Fund. The Interdenominational Cooperation Fund pays for the work of the Office of Christian Unity and Interreligious Cooperation (OCUIC). The World Service Fund supports the work of Global Ministries, Higher Education and Ministry, Church and Society, Discipleship Ministries, United Methodist Men, the General Commission on the Status and Role of Women, the General Commission on Religion and Race (GCORR), and the Connectional Table, along with other expenses. For those agencies that are apportionment-funded, the amount of apportionment funding is projected to drop steeply in upcoming years.

Some agencies also administer other apportionment funds. For instance, GBHEM administers the Methodist Educational Fund and Black Colleges Fund. Moreover, GCFA administers all apportionment funds before they are disbursed. Such funds, however, must be used for whatever purposes are attached to that fund, perhaps minus a small administrative fee. Thus, GBHEM cannot decide to use Black Colleges Fund money to support higher education in the Philippines; it must be used to support UMC-affiliated historically black colleges and universities in the US. In this way, agencies serve as “pass-throughs” for these other funds. They administer them, but the funds are in a separate pot from the rest of their revenue streams.

Whatever source the money (or gifts-in-kind) comes from, once an agency receives it, it becomes an asset. For financial assets, agencies may then spend them, save them, or convert them into tangible assets (by buying new desks or computers for its employees or purchasing books for the GCAH library, for instance).

What an agency does with the assets depends a lot on where that asset came from and why it was given, as noted above. Again, grant monies must be spent on the project described in the grants, donations to an endowment must be added to the endowment, and donations for a particular program must be used for that program. To do otherwise would be to break trust with the person giving the asset and expose the agency to lawsuits.

Moreover, the use of an agency’s income and assets is governed by the complex set of foundational documents and decision-makers that include, on one hand, the General Conference and Book of Discipline, but also include, on the other, the agency’s own articles of incorporation, by-laws, board of directors, and staff leadership. (For more, see “A Primer on Board and Agency Organization”). General Conference, thus, does not have completely free reign in telling an agency what do to with its assets.

Information about agency income and expenses can be readily found online from GCFA in the form of audited financial statements for apportionment-funded agencies. Additional financial information about the income, assets, and expenditures can be found in agency reports or auditing statements and sometimes in IRS 990 forms filed by the agencies.

Next week, I will take a different perspective on agency resources and look at asset groups instead of income streams.

The Current Three-Way Standoff in the UMC

Today's post is 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 The United Methodist Church continues to react to GC2019, plan for GC2020, and try to come to grips with the all-consuming debate over gay ordination and gay marriage in the church, it seems that the church may be settling into a three-way standoff between US (and Western European) centrists and progressives, US traditionalists, and African (and Eastern European) leaders.

In technical terms, a three-way standoff is a conflict in which none of the parties can achieve their goals, nor can they retreat from the conflict. Thus, the parties remain in a deadlocked state. Armed three-way (or more) standoffs are a trope in movies such as "The Good, the Bad, and the Ugly."

Here’s a run-down of the parties in the current UMC three-way standoff, why they can’t achieve what they want, and why they are not willing to retreat.

US Centrists and (some) Progressives
The goal of US centrists and progressives, along with progressives in Western Europe, is clear: to remove what they see as discriminatory language against LGBTQ persons in the Book of Discipline, enabling United Methodist in those contexts to ordain LGBTQ persons and to perform gay weddings.

Yet as has been shown repeatedly, US & European centrists and progressives do not have enough GC votes to accomplish this goal, since both US traditionalists and Africans, Eastern Europeans, and many Filipinos are opposed to such changes.

Yet at the same time, US centrists and some US progressives have also indicated that they are not willing to walk away from the UMC. The UMC Next plan that is being advanced to GC2020 essentially calls for US traditionalists to leave the church instead of centrists and progressives.

Some US progressives (especially those associated with UM Forward and the Western Jurisdiction) have indicated a willingness to leave the conflict, but this appears to still be a minority opinion among centrists and progressives as a bloc.

Motivations vary, but a sense of ownership of the UMC, commitment to current structures, including the boards and agencies, and a sense of having the direction of history on their side have made most centrists and progressives unwilling to leave the denomination en masse.

US Traditionalists
The goal of US traditionalists is to be part of a church that does not ordain queer people or perform gay weddings. While they have up until GC2019 tried to accomplish this goal through GC legislation, the way events have unfolded since then seems to have shown them that they cannot easily achieve that goal through this strategy. UMC polity allows too many ways for centrists and progressives to stay and resist.

While it is possible that traditionalists could win a long-term legislative war of closing loopholes, most traditionalists seem to have concluded that they best way to achieve the goal of being in a church without gay ministers or gay weddings is to split the denomination.

Yet African bishops have indicated that, while they support traditionalists’ understanding of marriage, they do not support traditionalists’ goal to split the church. Without the support of that bloc, US traditionalists have a relatively small bloc of votes themselves and cannot advance any agenda.

At the same time, US traditionalists overall seem unwilling to walk away from the UMC. Certainly, there have been individual traditionalist congregations here and there that have left or are leaving, but leaders of Good News have been vocal about their intention to stay in the UMC.

In large part, this seems to be because traditionalists are unwilling to accept anything that could look like a defeat, and they believe that leaving the denomination after “winning” the GC2019 vote would look like a defeat. Much of the motivating energy of US traditionalists seems to come from a sense of being a successful insurgency. Leaving does not fit with that narrative.

African Bishops (and Eastern Europeans)
The African bishops recently met and reiterated their traditional understanding of marriage and their unwillingness to split the denomination. This statement is consistent with earlier statements. Yet reading between the lines of the bishops’ statement, the overall political goals of African leaders seem to be two-fold: to be included as central players in the UMC decision-making process and to preserve the current agency structure.

One of the African bishops’ main objections to all of the division proposals was that they were developed without African input. For a major group in the denomination, Africans are given relatively little say in determining the agenda and possible futures of the denomination, and they would like more.

In addition to that goal is support for the boards and agencies and the financial and technical support they provide for ministries in Africa. In this regard, Eastern Europeans find themselves in a similar place – maintain a strongly traditionalist stance on marriage but opposed to dividing the church.

Yet American control of agenda-setting is deeply ingrained in the UMC and reinforced by a variety of linguistic, procedural, administrative, financial, and practical considerations, and neither US traditionalists nor US centrists and progressives seem interested in making major changes to the denomination that would give Africans a greater voice, as evidenced by the division plans developed without any African input.

Moreover, US United Methodists very clearly control the purse strings both of the boards and agencies and of annual conference- and church-based partnerships. Thus, Africans can ask for the boards and agencies to continue and continue their funding, but since Americans provide that funding and can withhold it, it is beyond Africans’ power to determine the future of the boards and agencies.

At the same time, Africans, or at least the African bishops, have indicated that they are unwilling to walk away from the UMC. The name of United Methodist has strong “brand equity” on the continent of Africa, and Africans are deeply committed to the name because of what it says to the societies in which African United Methodists operate. Moreover, Africans feel like they should not have to leave their church because of fights that others have caused and are mostly occurring among others.

And thus we arrive at the current three-way standoff in the UMC: US centrists and progressives, US traditionalists, and Africans, none able to achieve their goals in the church, but none willing to walk away, deadlocked in conflict.

Editor's note: The original version of this post referred to the UMC's situation as a "Mexican standoff." The name was changed in response to readers who raised concerns that this term implied negative ethnic stereotypes. While this was certainly not my intent, I sincerely apologize to any who may have been offended by the use of this term.

A Primer on Board and Agency Organization

Today's post is 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 recent posts on this blog about apportionments make clear, the uncertainty about the future of The United Methodist Church extends to its boards and agencies. Thus, it seems useful to provide a brief overview of how boards and agencies are organized and governed. This post will examine the variety of authorizing documents and supervising authorities for church boards and agencies.

United Methodists might think that boards and agencies exist because the Book of Discipline says they should exist, right?

That’s true in part, but the Book of Discipline in only one of three or four foundational documents for boards and agencies that also include a legal charter or articles of incorporation and by-laws, perhaps accompanied by a constitution. These three sources – the Book of Discipline, the articles of incorporation, and the by-laws and constitution – cover, respectively, the agency’s status under church law, its status under secular law, and its internal organizational rules. Thus, each of these documents stipulates distinct but overlapping aspects of an agency’s existence, structure, and purpose.

The Book of Discipline recognizes and regulates the existence of the boards and agencies in Chapter 5 of Part VI of the BOD, titled “Administrative Order.” The BOD includes often lengthy descriptions of the purpose, objectives, and responsibilities of the boards and agencies. The BOD may contain additional programmatic stipulations and/or stipulations about the work of certain sub-units of boards or agencies.

The Book of Discipline also stipulates how the members of the board of directors for each agency are to be chosen, including geographic, gender, and other forms of representation. It may also specify how senior agency leadership is to be chosen, including board officers and senior staff. Finally, the Book of Discipline stipulates in general terms how each of the boards and agencies is to be funded.

The provisions of the BOD regarding boards and agencies are, like most of the rest of the BOD, subject to change by a simple majority vote of the General Conference when it is in session. Thus, General Conference has authority under church law to recognize agencies, to prescribe in general terms what those agencies should do, and to indicate where agencies should generally get their funding.

The agency’s charter or articles of incorporation is a legal document filed with a state government. This legal document recognizes the agency as a non-profit corporate entity with the authority to own property and conduct business.

The articles of incorporation tend to be brief and broad. Articles of incorporation spell out the purpose of the agency in very general terms, specify what group or individual has legal authority to act on its behalf (usually its board), and defines the agency’s relationships with other legal entities, including predecessor groups and designated successor groups.

The articles of incorporation may specify the United Methodist General Conference as a supervisory entity for the board or agency. They may also indicate that the members of the agency’s board of directors must be United Methodist. Thus, the connection between an agency and the UMC may be written into secular law as well as church law, even though the legal existence of an agency is not a function of its recognition by church law. Put another way, an act of General Conference could not automatically dissolve an agency under secular law without additional legal paperwork being filed.

The articles of incorporation can be amended by filing legal paperwork with the appropriate state authorities. Such changes are usually authorized by the agency’s board of directors, with the work carried out by staff and/or hired attorneys. Articles of incorporation must fit within the standards of state law governing non-profit corporations, but beyond those broad parameters, state governments don’t have much of a say in the actual content of the articles of incorporation.

Finally, each agency has by-laws and may also have a constitution. The by-laws and/or constitution will include items such as the name and general purpose of the organization. But most importantly, these documents specify in greatest detail how the agency and its board of directors should be structured to carry out their work.

They indicate what the officers of the board of directors should be and how they are to be chosen. They may specify aspects of the board’s work, including standing committees, timeframes for meetings, criteria for quorum, etc.

They may stipulate the existence of certain senior staff roles such as General Secretary and Chief Financial Officer. They may also specify relationships with other agencies, such as local or annual conference auxiliaries.

The by-laws (and constitution, if there is one) can be changed by the agency’s board of directors. The exact procedure varies and may be different for the constitution, if there is one, than for the by-laws. Generally, a majority of board members, and perhaps a super majority, must vote for by-law changes.

While the responsibility for amending the by-laws and revising the articles of incorporation technically rests with the board of directors, it is worth noting the importance of senior agency staff in suggesting by-law changes and changes to the articles of incorporation. Members of the board of directors sometimes may not be familiar with, may not have strong opinions about, or may not have sufficient time to learn about the technical and legal issues at stake.

Thus, boards of directors will frequently (though not always) defer to senior agency staff who make requests for legal and organizational changes, assuming that senior staff possess the technical expertise and familiarity with the agency necessary to determine how the foundational documents should be changed. Of course, the extent to which this is true depends upon the personalities and abilities of and relationships between senior staff and board leadership.

What does this approach to structure mean for current debates in The United Methodist Church? It means that some changes to how boards and agencies operate could be unilaterally passed by General Conference. However, really substantive changes in how the boards and agencies are set up and their relationship to the denomination (and/or its successors) would likely require agreement among General Conference, the board of directors, and senior staff, or at least a willingness by the board of directors and senior staff to accede to the wishes of General Conference.

If there is significant disagreement between General Conference and the board of directors of an agency on its future, this way of organizing and authorizing the boards and agencies also sets up the possibility of a situation in which the status of the agency under church law and its status under secular law may be in conflict with one another. In that instance, its secular status as determined by its board of directors may (though not necessarily) have an advantage over its church status, since any disputes about the status of the organization and its resources would be resolved in secular courts.

Darryl W. Stephens - Connectionalism: What Connectional Relationships Really Mean in the UMC

Today's post is by Rev. Dr. Darryl W. Stephens. Dr. Stephens is director of United Methodist studies at Lancaster Theological Seminary and a clergy member of the Texas Annual Conference. He is author of Methodist Morals: Social Principles in the Public Church’s Witness (University of Tennessee Press).

While discussing the nature of apportionments, it is helpful to understand the philosophy and intent behind some of these expenditures. The World Service Fund, the largest of the seven apportioned funds, pays for the work of General Conference’s agencies and boards. What is the nature of this form of connection, binding United Methodists from the local congregation to the whole of this denomination?

“Connectionalism” is an often used and seldom understood buzzword in The United Methodist Church. The Discipline states, “Our connectionalism is … a vital web of interactive relationships” (Book of Discipline 2016, ¶ 132). This vague definition becomes more concrete by tracing the relationships that comprise each enterprise of the General Conference, for example the Status and Role of Women.

Connectional relationships bridge the work of General Conference to every level of structure in the denomination. The constitution reserves for the General Conference “full legislative power over all matters distinctly connectional,” including the power “to initiate and to direct all connectional enterprises of the Church and to provide boards for their promotion and administration” (¶ 16.8).

The General Commission on the Status and Role of Women (GCSRW) is one such board, mandated by General Conference to carry out a specific connectional enterprise, “a continuing commitment to the full and equal responsibility and participation of women in the total life and mission of the Church” (¶ 2102). Every charge conference and every other level of the denomination must connect with this enterprise, according to judicial interpretation of our constitution.

Judicial Decision 411 states, “When the General Conference initiates connectional enterprises and provides boards for their promotion and administration, the functioning of such boards must reach to every level in the life of the Church, from the General Board to the Charge Conference.”

How is this connectional relationship realized? Each annual conference is responsible for structuring itself to further the connectional enterprises of the General Conference.

¶ 610. The annual conference is responsible for structuring its ministries and administrative procedures …. In so doing it shall provide for the connectional relationship of the local church, district, and conference with the general agencies. It will monitor to ensure inclusiveness—racial, gender, age, and people with disabilities—in the annual conference. … (emphasis added)

Thus, the mandates of GCSRW reach throughout the denomination, at every level of conferencing. Each annual conference is required to provide structures to enable the relationships of the ministry of GCSRW, as well as all of the other connectional enterprises of General Conference.

¶ 644. There shall be in each annual conference, including the central conferences, a conference commission on the status and role of women or other structure to provide for these functions and maintain the connectional relationships.

Annual conferences are given some degree of flexibility for structuring these relationships within committees, but the basic requirements are to maintain the function of and connection to the General Commission, which is an agent of General Conference.

¶ 610. 1. Annual conferences are permitted the flexibility to design conference and district structures in ways that best support the mission …. In doing so, an annual conference shall provide for the functions and General Conference connections with all general agencies provided by the Discipline as follows: a) There shall be clear connections between the General Conference agencies, annual conference program and administrative entities, and the local congregations. These connections shall be identified in the business questions of the annual conference each year. …All disciplinary references to “equivalent structures” shall be defined by this paragraph. (emphasis added)

Judicial Council Decision 815 clarifies that “equivalent structures” must be substantive and identifiable:  “In doing this [restructuring], the annual conference may organize units so long as the functions of ministry are fulfilled and the connectional relationships are maintained.” (emphasis added)

Connectional relationships are embodied, functional, and financial. Judicial Council decisions 1198 and 1225 make clear that an “equivalent structure” (for example, a blended committee) must have a designated person and budget to maintain the connectional relationship with each general agency. For example, the annual conference COSROW chair must be nominated and elected by the annual conference, and the annual conference COSROW chair or committee must be given a budget specific to its work—a common pool of funds for a blended committee is insufficient. These responsibilities cannot be delegated—the annual conference (not a committee) must elect a COSROW chair and allocate a budget.

Connectional relationships must likewise reach to every district and local congregation (¶ 610). When every local church has identified a person for the ministry of “a continuing commitment to the full and equal responsibility and participation of women in the total life and mission of the Church” (¶ 2102) and this ministry is coordinated with the district, annual conference, jurisdictional (or central) conference, and general conference ministry of the status and role of women, then we will have achieved “a vital web of interactive relationships”—a glimpse of connectionalism.

So, when we consider apportionments for general agencies, we are talking about more than fees for services. “Unbundling” the work of general agencies would circumscribe the relationship of the local congregation to the denomination as a whole. A system of subscription fees might preserve some of the functions of general agencies (for those who participate) but would not nurture the connectional relationships constitutive of the UMC. The UMC could no longer claim “connectionalism [as] … a vital web of interactive relationships.”

Questions about UMC Separation

Today's post is 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.

There has been a lot of conversation about the possibility of a coming split in The United Methodist Church since General Conference 2019. Secular media has speculated about it. Members of the Renewal and Reform Coalition have been calling for separation or "mitosis." The recent UMC Forward and UMC Next events discussed this possibility. Even the Council of Bishops "is exploring models and plans of new forms of unity."

There are, to put it mildly, many questions that arise from the possibility of such a split. On a basic level, there are many different ways separation could happen – one group leaving the existing structure and another staying, all current connections being dissolved with congregations or annual conferences left to determine their own plans, two or more groups negotiating a plan of separation, and probably other possibilities as well.

Assuming some sort of negotiated plan of separation, questions then arise of who will be doing the negotiation. What authority will they have to speak for a wider group? What voices will be part of the negotiation, and whose interests will they represent – theologically and in terms of a variety of identity issues (race, gender, sexuality, nationality, etc.)?

Then there are questions regarding the details of the separation, including the following:

1. What happens to the central conferences? Do they become autonomous? Do they go with one group as a default? Does each of them vote on autonomy or affiliation with one group? Is the central conference even the right body to make these decisions in all cases, or would it make more sense for episcopal areas or annual conferences to make such decisions in some cases? Allowing United Methodist outside the US to make these decisions themselves is necessary for a division to happen in a non-colonialist way. It is quite likely that different central conferences would make different decisions. It is also likely that there will be differences of opinion within some central conferences.

2. Who (if anyone) keeps the name “The United Methodist Church”? If one group keeps the name and the other doesn’t, then it seems more like an exit than a division. If neither group keeps the name, then it seems more like a mutual division.

3. Who (if anyone) keeps the cross and flame insignia? Again, if one group keeps the name and the other doesn’t, then it seems more like an exit than a division. If neither group keeps or both groups keep the cross and flame, then it seems more like a mutual division. Both groups continuing to use the same logo may cause confusion, though, unless there is some modification by one or both groups.

4. When determining which congregations and clergy become part of which group, is there a default option for affiliation, or does every congregation and clergy person vote? If there is a default option in the division, what is it – the progressive or the traditionalist group? Who determines that default? At what geographical level is it determined – jurisdiction? annual conference? This may be the most contentious issue, since whichever group is the default option with likely retain divided congregations or congregations reluctant to vote.

5. What happens to the boards and agencies? Do they go with one group? Is it necessary that they all go with the same group? Are at least some of the boards and agencies shared between groups? Do they become independent non-profits, able to serve Methodist groups and non-Methodists alike? If they do not continue to be part of one group solely, how will their boards be determined? In any case, what will their revenue streams look like? Will they be dissolved, their assets liquidated and split?

6. What happens to other United Methodist-related institutions such as seminaries, colleges, hospitals, non-profits, etc.? Do they choose a group? Do they cease to be church-affiliated at all? What does that affiliation look like? In cases where there are currently United-Methodist appointed trustees, who will appoint those trustees in the future?

7. What, if any, opportunities will there be for on-going relationship across newly separated parts of the church, including perhaps newly autonomous central conference regions? Will they all be part of the World Methodist Council? Will there be other avenues to foster those relationships, such as some non-law-making continuation of General Conference? Will boards and agencies continue to serve as means of fostering relationships? Will there continue to be direct relationships between annual conferences or local churches?

Finally, and perhaps most importantly, there is the question, to the extent that congregations, annual conferences, and/or church institutions are choosing between groups, what are the defining issues by which those choices are being framed? Will the choice just be about views on queer ordination and gay marriage, or will each group articulate a larger vision of the church, say around a particular understanding of holiness, full inclusion and affirmation of all people, and/or opposition to systemic oppression in all its forms? This question has particular salience for United Methodists of color and United Methodists in the central conferences, who may not see themselves aligning perfectly with either side in a split if the terms are set solely by white Americans.

Comparative Global Wesleyan Polity - Concluding Thoughts, Part II

This is the sixth in an occasional series of articles comparing the different ways in which Methodist/Wesleyan denominations historically related to The United Methodist Church structure themselves as global bodies. Today's post is 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.

This series of blogs has looked at four denominations and compared them to The United Methodist Church and each other: the African Methodist Episcopal Church, The Wesleyan Church, the Free Methodist Church, and the Church of the Nazarene. The previous post in the series shared some concluding thoughts about what it means to be a global Methodist/Wesleyan denomination. This post will share additional concluding thoughts. These thoughts, however, will not be about being a global church; instead, they will examine church size.

The previous post noted that both in the early twentieth century and in the 1960s and 70s, United Methodists and their predecessors focused on merger rather than crafting international polities. These decisions to pursue merger have had implications not only for the global nature of the church but also organizational consequences that have affected the church regardless of location.

This post is not meant to be a critique of the ecumenical spirit that was a part of previous Methodist mergers. Ecumenism is both authentically Methodist and an important part of the Christian witness to the catholicity of the church.

Nevertheless, other scholars have suggested that ecumenical motives were not the only ones at play in past Methodist mergers. There was also a desire to build a bigger and hence more influential church. This desire for influence was a desire for cultural and political power in the United States and thus US-focused. The consequences of such a desire for size and influence have affected the UMC, and not entirely in positive was.

In fact, comparisons with other Methodist/Wesleyan bodies show two negative aspects to United Methodist’s historic choices for size and influence:

1. The UMC is not only bigger than other denominations; it has more loci of power.

The UMC is relatively top-heavy in its leadership. The number of bishops or general superintendents in other denominations varied, but it ranged from 6 to 20. In comparison, the UMC has 66 bishops. Most of these people are faithful, Spirit-filled people; that’s not the point. The point is just that there are more of them.

This plethora of bishops is a consequence not only of denominational size but also of choices made. First, it is a consequence of the system of missionary bishops that the MEC created but then never fully thought through, in part because of the impending 1939 merger. It is also a consequence of the 1939 merger and the desire of both the Southern and Northern churches to not be led by each other’s bishops.

As a consequence of both choices, the UMC has moved toward a de facto diocesan system of bishops instead of some sort of itinerant general superintendency. This shift has meant more bishops and more administrative functions associated with bishops in each episcopal area.

The United Methodist Church also has more boards and agencies than its sibling denominations, and the boards and agencies have greater autonomy than in other denominations, many of which have a single board model. This is not a criticism of our bishops or our boards and agencies; they all do good and faithful work. Again, the point is that there are more of them.

Here again, size is a factor, but so are historical choices. The UMC has more boards and agencies with greater independence because it often pioneered their creation. Especially the Methodist Episcopal Church had the size and resources to invent a lot of the components of what became the standard template for modern church bureaucracy. That is an accomplishment.

I do not think that The United Methodist Church should undo the accomplishments of its predecessors by eliminating boards and agencies in some sort of purge fueled by anti-bureaucracy ideology. All of our sibling denominations have boards and agencies to help them carry out their ministries. Boards and agencies are an important part of how denominations work together.

What is important, however, is the ways in which boards and agencies communicate and coordinate with each other. There have been significant efforts over the last decade here, and more efforts are on-going. The boards and agencies are significantly less siloed than they once were.

Neither bishops nor boards are bad in and of themselves. Having so many of them, though, means that there are multiple and sometimes conflicting sources of power in the denomination. While this arrangement can ensure a level of democratization, it also relates to my second point:

2. Smaller denominations are more focused in their mission.

Reading through the books of discipline for all four comparative denominations, I got a sense for what ethos united them as a denomination beyond their bureaucratic structures. I’m not sure the same can be said for the UMC.

In part, that’s because the UMC has always been a diverse tradition. In part, that’s because of the large number of leaders and agencies we have. But more than anything, I think it’s a function of size. The UMC and its predecessors have repeatedly favored numeric growth over focused mission, whether that was through pursuit of church mergers or relaxing standards on class meeting attendance. Thus, we’ve had a lot of members with a lot of different ideas about how to be Methodist.

There have been positive aspects to choosing size (ecumenicity, inclusivity, etc.), but there have also been costs. Indeed, the costs have become especially evident as United Methodism has found itself wondering what it means to be United Methodist, where the church should focus, and how (or whether) the church can move in the same direction, questions highlighted by long-running American membership decline and long-running debates about homosexuality.

I am not arguing here that the UMC should break up into smaller denominations for the sake of mission. While that is a possibility, and there would be some benefits, there are certainly costs involved in that choice, too, and I do not suggest that those costs are better.

Instead, I think that the present moment represents an opportunity for the UMC to ask how to (re-)structure itself in a way that will not emphasize preserving the most cultural power and largest group of members possible but instead emphasize enabling its members to pursue the mission of making disciples of Jesus Christ for the transformation of the world in ways that are contextually relevant and recognizes the equality of different units of the church to determine for themselves what those ways are. This is a tall order, but if the UMC wants to continue to be a global denomination, a sense of shared mission is essential.

The Nordic Theory of Giving

I recently read Anu Partanen’s book, The Nordic Theory of Everything. One of the arguments she advances in the book is something she calls “the Nordic theory of love.” According to this theory, relationships between people represent the truest expression of love when they are not encumbered by any form of dependency of one party on another. Dependency is seen as introducing power dynamics that negatively affect both giver and receiver. Moreover, it shifts the basis of the relationship from love to need or power.

The alternative to this type of dependency is to guarantee certain things as a right within society so that people are not dependent on family, other individuals, companies, municipalities, etc. to provide them. This “Nordic theory of love” is operationalized within society by creating social and government systems that emphasize the autonomy of individuals and provide basic needs for all through collective programs so that people are not dependent upon one another. Certainly, many Americans are uncomfortable with the state playing such a role in people’s lives, but my point is not to argue for an active state; it is to use Partanen’s ideas about dependency to reflect on the UMC.

To give a few instances of how the Nordic theory of love plays out in the Nordic countries, college students are not required to report their parents’ incomes on financial aid forms, since college students are presumed to be financially independent of their parents and should not be forced to rely on parental assets to determine their futures. The government runs health programs so that people are not dependent on their employers for health insurance and thus forced to continue to work at jobs they hate just to keep their health insurance. Married couples file tax forms separately to avoid fostering financial dependency of one spouse upon the other.

Let’s see specifically how this theory works out with the imaginary example of Wi-Fi. The American system is that everyone should pay for their own Wi-Fi. For those with the resources to do so, that works out great. If someone doesn’t have enough money to pay for Wi-Fi, then they would have to rely upon a neighbor or friend to share their Wi-Fi password with them, perhaps, or go without. The neighbor or friend may ask for favors in exchange or set conditions on the gift – the password recipient may not watch Netflix in the evenings or must wash the password-giver’s car, perhaps. The recipient thus becomes dependent on the giver. As a consequence, they are not free to use their internet and other resources as best they see fit.

The Nordic solution would be to provide Wi-Fi through a municipal utility, as some cities in the US have done. Thus, everyone gets Wi-Fi – the poor are not left behind, but no one is dependent on another person for their Wi-Fi access, since it is a basic service provided to everyone. Note, that this is not charity Wi-Fi for the poor; it’s Wi-Fi for everyone that the poor can use along with the middle class and rich. Moreover, under the Nordic theory, everyone contributes to the Wi-Fi, to the extent they are able (and barring severe temporary circumstances such as loss of a job), through their taxes. Wi-Fi is thus not an issue of charity; it’s a basic public service.

I was thinking about this system as I was thinking about dependencies that are created through mission giving in the UMC. There are many instances in which American or European United Methodists share generously with their fellow believers in Africa and the Philippines. Yet, like the person giving out his or her Wi-Fi password above, American and European giving can come with conditions or expectations of return favors. These conditions may range from naming rights to restricted uses of donated gifts to expected support for polity positions. When such conditions or expectations are attached to them, the gifts create dependency. As a result, the receivers are not free to use the gifts or their other resources as best they see fit.

There are several ways to move beyond such dependencies. One way is to revamp giving along the lines of the methods described in When Helping Hurts, Toxic Charity, and similar books. This is an important approach to overturning dependency-creating models of mission, and readers are encouraged to explore these books if they have not already.

Yet I wonder whether it would also be possible to institute some Nordic theory of love solutions to the issue of dependency in the UMC. What common services would we want as guarantees for all churches, regardless of location? What services would we want our general agencies to provide to ALL churches or annual conferences – rich or poor, Western or Southern? Construction assistance? Disaster relief coordination? Technical assistance for annual conferences? How could we structure contributions to the World Service Fund or other means such that all annual conferences can contribute to these basic public services, to the extent they are able and barring severe temporary circumstances?

Such a shift would require significant changes in mindset and sacrifice of privilege by American and European churches. It’s nice to be the donor and to be able to dictate the terms or call in favors when needed. There are advantages to being the patron in a patron-client relationship, and Westerners would need to self-sacrificially give up those advantages for the sake of striving toward the gospel equality to which Jesus calls us.

Yet Methodists are supposed to be known as a people of love. It’s worth thinking, therefore, about what Anu Partanen’s Nordic theory of love might have to say to us as we seek to better love our Methodist neighbors as ourselves.

Ole Birch: What happened to the worldwide church? A response to Wonder, Love and Praise

This blog post is one in a series containing responses to the denomination's proposed ecclesiology document, "Wonder, Love and Praise." These responses are written by United Methodist scholars and practitioners around the world. This piece is the second of two written by Rev. Ole Birch, pastor in Copenhagen, Denmark Annual Conference, and member of The Connectional Table.

In the introduction to “Wonder, Love and Praise”, the motivations behind the document are presented and among them, the following is mentioned: 

“The dramatic recent growth of The United Methodist Church in parts of Africa and Asia, and the increasing visibility and involvement of United Methodists from other countries in its leadership, are gradually bringing United Methodists in the United States to a greater (if belated) awareness that theirs is, if not a “global” or “worldwide” church, at least not simply an American denomination”.

The text then proceeds to talk about the “adequacy of a polity that has been essentially U. S.–centric, taking for granted a basic, normative national identity for the denomination”.

My intention with these two blogposts is to offer two European (or Central Conference) perspectives on the church that can perhaps deepen this question of center and periphery, and bring something new to our understanding of Methodist Theology on the church.

What if there was no center?
My second point in looking at the text from a Central Conference perspective goes to the identity we try to claim as a global or worldwide church.

In our present church structure, it is fair to speak of a strong center and a periphery. At the center we find the General Conference and the administrative order (the agencies, the commissions and the Connectional Table. The program agencies and the administrative organizations have historically been set up to provide support functions for the connectional system in the US. Their purpose and functions have been determined by the perceived missional needs of the five jurisdictions, and their mandates reflect theological and sociological developments in the American church and society. In 1996, General Conference gave the agencies a new identity as Global Agencies, with a global mandate. At the center, the agencies have their mandate, a budget, some staff and the power to determine how to implement the wisdom of the GC.

At the periphery, we find the church in Africa, Asia and Europe. The seven Central Conferences are very different because they serve in very different circumstances. Some are small, in wealthy countries; some are big, in poor countries. Some are highly dependent on financial support, while others are not. What unites them is that their pastors, laypeople and leadership possess contextual competence in their unique missional situation.

In some parts of the world, the church, under the leadership of these people, has demonstrated astonishing growth over the last 20 years. Today more than 40 % of the UMC membership is in the church outside the US.

If the church in these parts of the world needs support, it can ask the center for it.

The administrative order we have today is heavily dominated by the UMC in the United States. Communication is always determined by the need of the periphery and the power at the center.

All agencies are based in the US. All but one have a US born (and educated) general secretary. All have US bishops as presidents. The boards of the agencies do have CC representation. The Connectional Table of 2016-20 has approx. 85% US members.

The very real problem is an administrative order for at global church that cannot possibly be contextually relevant in Africa, Asia and Europe.

My questions regarding our understanding of our church are these; in a worldwide church, what should be the relationship between center and periphery? Do we need a center? Is our present American center determined by history, theology, need for control or American power?

Let’s presume that the church in the US becomes its own region, and we therefore have a unified structure throughout the world. Then each region (or CC) could establish the administrative order it needs to do the mission of the church (No global agencies) These regional bodies relate to each other and find partners around common projects.

What would that mean?

In terms of contextual mission? It could mean that the contextual competence present in the church in the different parts of the world would gain influence on the administrative order and the programs that were created.

For connectionalism? It could mean that the focus of our connectionalism would move towards mission, instead of policy.

In terms of equity? Less dominance by the already privileged.

For subsidiarity? It could mean that decisions would be made close to, and even by, the people affected by the decisions.