Domestic and Foreign Missionary Society reports $2.4 million annual surplus

March 24, 2015

[Episcopal News Service – Salt Lake City, Utah] Responding to financial reports by the Domestic and Foreign Missionary Society leadership showing yearly income exceeding expenses (or “surplus”) of nearly $2.4 million, The Episcopal Church’s Executive Council, during its March 19-21 meeting here, adopted a resolution celebrating the financial stewardship of the society’s staff and management. The resolution acknowledges in particular the “consistent, visionary leadership” of Chief Operating Officer Bishop Stacy F. Sauls and Treasurer and Chief Financial Officer N. Kurt Barnes in reducing expenses and generating income.

A presentation by Barnes on the meeting’s first day showed a preliminary net result (income less expenses) of $2.4 million in the churchwide budget for fiscal year 2014, the middle year of the 2013-2015 triennial budget.

The surplus, which appears in budget lines overseen by the Domestic and Foreign Missionary Society management, represents “a better result than budgeted” for 2014, according to Barnes. “The strong financial position of the Domestic and Foreign Missionary Society comes through taking advantage of opportunities for revenue generation, as well substantial savings in operating expenses,” he said.

The Domestic and Foreign Missionary Society is the name under which The Episcopal Church is incorporated, conducts business, and carries out mission.

Annual income exceeded projections by more than $2.5 million, primarily a result of unanticipated increases in: rental income generated by making more efficient use of space and the leasing of excess space at the Episcopal Church Center in New York; renegotiation of loans and lines of credit; and steady diocesan giving. Savings in operating expenses came primarily as a result of careful budget management by staff in every area: mission, administration and governance.

These savings do not, however, equate with a reduced mission footprint, according to Sauls.

“We are committed to being held accountable for measureable mission deliverables,” Sauls said, pointing to the recently released Report to the Church 2015, an online magazine published in January that illustrates the Domestic and Foreign Missionary Society’s work to support local communities in The Episcopal Church working toward each of the Five Marks of Mission.

“We are trying to lead the churchwide staff to a cultural shift toward mission and away from maintenance; toward service and away from regulation,” Sauls continued.

“The purpose of a churchwide missionary society is the redistribution and targeting of our resources, both financial and personnel, to the parts of the body which, though financially poor, are among our richest communities in vision and creativity toward mission and have the most potential,” Sauls added. “The present financial picture shows a churchwide structure already living into a future that is mission-driven, Gospel-based, and rooted in ministry at the local level.”

Reaction from Executive Council members

The resolution recognizing the financial leadership of the staff originated with the Executive Council’s Joint Standing Committee on World Mission. The full council adopted it unanimously on the final day of its meeting and several members later praised the financial standing of the Domestic and Foreign Missionary Society.

“A $2.4 million budget surplus indicates the careful oversight of spending, and careful financial stewardship of the Rt. Rev. Stacy Sauls, chief operating officer, and Kurt Barnes, [treasurer and chief financial officer],” said World Mission committee member and Diocese of Pennsylvania Bishop Provisional Clifton Daniel.

“Many thanks are owed them for their vigilance, which frees additional funding for the growing missionary vision of this church,” Daniel said.

Council member John Johnson, a General Convention deputy from the Diocese of Washington, agreed.

“This surplus is great news for all Episcopalians. Excellent fiscal management and oversight of the Domestic and Foreign Missionary Society operations and programs demonstrates that we are a church of abundance and opportunity,” Johnson said.

“Moving forward, I believe deputies to General Convention and other church leaders need to create a new strategic vision and mission for a renewed Episcopal Church focused on taking [the] church to the world and not the other way around,” Johnson added.

Another council member, the Rev. Dahn Gandell of the Diocese of Rochester, said, the Domestic and Foreign Missionary Society staff “has done an excellent job managing the financial resources of our church. Net income has exceeded expenses in nine of the last 10 years due to increased revenue and expenses coming in under budget while still accomplishing the goals set by the General Convention and Executive Council.”

“It is important that the church is aware of these successes and acknowledges Bishop Stacy Sauls and Kurt Barnes for their leadership and commitment to our church and its mission,” she said.

Several council committee chairs used their final triennial reports to the council to praise a relationship between Domestic and Foreign Missionary staff and the council that they said had improved markedly over past triennia.

Lelanda Lee, a General Convention deputy from the Diocese of Colorado and the chair of the council’s Joint Standing Committee on Advocacy and Networking, noted, “The [staff-council] collaboration has been very welcome and very effective.” Steve Hutchinson, a deputy from the Diocese of Utah and the chair of the council’s Joint Standing Committee on Governance and Administration for Mission, said that “the working relationship this triennium between the standing committees of council and the staff…[is] noticeably more engaged, constructive and helpful, and an improvement from the prior triennium.”

As part of his report to council, Bishop Mark Hollingsworth of Ohio, chair of the Joint Standing Committee on Finances for Mission, praised the “skill, wisdom, creativity, and faith” of the staff members that have worked with his committee during the present triennium, all of whom “have been essential to the carrying out of our mission and activities.”

Revenue generation and staff dispersal

Multiple factors contributed to the generation of $40.6 million in revenue, more than $2.5 million beyond budget projections, during 2014. These include an unanticipated rise in giving as well as rental income that exceeded forecasts.

The lease of unused floors of The Episcopal Church Center to outside tenants dates to 2009, but has increased markedly during the present triennium. Currently, five floors are fully leased by outside tenants. The leasing of space has been made possible, in part, by an initiative of the Domestic and Foreign Missionary Society’s management in the present triennium to base increasing numbers of staff outside New York.

“We have made disbursing the staff to connect to local ministry a priority.  A side benefit has been the availability of additional space to rent to others,” said Sauls.

In contrast to six years ago, when nearly all employees of the Domestic and Foreign Missionary Society lived in the New York metropolitan area and worked out of The Episcopal Church Center, at present approximately 45% of employees – including most mission staff – live and work elsewhere.

“Domestic and Foreign Missionary Society staff members currently live and work in places as diverse as Seattle, Los Angeles, Denver, Minnesota, Dallas, Ohio, North Carolina, Washington, D.C., Orlando, Austin, and Buffalo,” said Samuel A. McDonald, deputy chief operating officer and director of mission. “In fact, as part of our international mission and identity, we also have staff living in places like Hong Kong, Panama, and Edinburgh.”

“While revenue generation is one ancillary benefit of the staff’s disbursement, the primary virtue has been that it has allowed the staff to become more responsive and accountable to the wider church, more grounded in local conversations and context for mission, and – perhaps most importantly – more productive in measurable deliverables toward mission,” McDonald added.

An increased mission footprint

Like Sauls, McDonald noted that an accurate picture of the Domestic and Foreign Missionary Society’s mission footprint can be found in the Report to the Church 2015, which is available in English, Spanish and French on the website of The Episcopal Church. In addition to extensive narrative presentations, illustrations, and videos related to each of the mission marks, the report contains an extensive appendix detailing specifics of the society’s work in each of the church’s dioceses.

Spanish and French translations of the report are also available online.

“The Report to the Church is all about partnership, illustrating the impact of churchwide resources when matched with local efforts,” McDonald said. “It is organized according to the Five Marks of Mission because the work of the Domestic and Foreign Missionary Society, like the triennial budget, is organized around those marks.”

The 2013-2015 triennial budget of The Episcopal Church was organized according to the Five Marks of Mission for the first time ever after the idea and a model budget were proposed to the 77th General Convention by Presiding Bishop Katharine Jefferts Schori.

Sauls cited church planting as an example of a mission focus in which limited but strategically leveraged investments at the churchwide level have begun to return dividends in local contexts.

“In the last triennium, there were eleven new church starts in all of The Episcopal Church, five of which were in Texas,” Sauls said. “Outside of Texas, there were just six new church starts, and the churchwide investment in this work was zero.

“This triennium, so far, we have planted 38 new churches or ‘mission enterprise zones,’ which are clusters of congregations or communities working in evangelism contexts historically underserved by our church: youth and young adults, communities of color, poor and working-class communities, or communities with little church or religious background,” Sauls continued.

“Approximately half of these are in Spanish-speaking contexts. We’ve done this by making available $1.8 million in grant money,” he said. “Through the miracle of partnerships – meaning matching funds from our partners, the dioceses – we’ve leveraged nearly $4 million toward these new church starts this triennium.”

Other examples of mission expansion cited by Sauls include the Missionary Society’s successful push to double the size of the Young Adult Service Corps this triennium and increase its ethnic and socioeconomic diversity, and recent work toward financial sustainability for Province IX dioceses. At March 13-17 meeting of the House of Bishops, Domestic and Foreign Missionary Society leaders announced that three Province IX dioceses (as opposed to the one originally planned) are on track to secure financial operation by 2019 thanks to partnership with the society.

Sauls cited the inauguration in 2013 of the Diocesan Partnership Program as a turning point in building strong links between the Missionary Society and the dioceses. The program pairs each diocese with a member of the Domestic and Foreign Missionary Society staff in order to create an easy contact and point of accountability for mission deliverables.

Each of these initiatives is covered in detail in the Report to the Church.

“The name of the Domestic and Foreign Missionary Society is nearly 200 years old, but as we seek to live fully into that name, it becomes clearer every day that a missionary society grounded outside itself is the future of churchwide organization,” Sauls said. “Churches that turn inward will die. Churches that turn outward will live abundantly.”