As we continue to shift to in-person gatherings rather than online, we must also grapple with the reality that giving has declined while costs to operate the church continue to rise. For the upcoming year, we are projecting a revenue shortfall of over $100,000. This shortfall is projected to rise over the next 3 years to around $150,000 a year. The Vestry has appointed a Task Force to develop a 3-year plan to reduce this deficit to a manageable shortfall of $50,000 per year which was until recently the shortfall amount covered by income from our Reserve Funds. Since all parishioners have a stake in the future financial health of the church through their generous contributions each year, the Task Force is seeking input from the congregation on the proposed plan. Listed below are some questions and answers explaining why the shortfall has increased, recommendations for addressing the issue and contact information for input from congregation members.
Who are the members of the Budget Review Task Force?
Members consist of Alvin Blitz, Chair and Treasurer; Barb Cross and Kevin Hess, Senior Wardens; Mike Gwozdecki and Robert Pound, Co-Chairs, Stewardship Committee; Debbie Kendrick, Contribution Coordinator; and the Rev. Adam Kradel, Rector.
Why did the shortfall increase so much over the past several years?
St. John’s has historically managed a shortfall in revenue each year at around $50,000 through support from its dedicated-use funds, unrestricted reserve funds and generous special gifts from our parishioners. However, several factors have exacerbated the situation in the past 18 months. They are the following:
a. The pandemic has resulted in a sudden decrease in contributions due the church being closed, deaths of major supporters of the church, and recent moves by major supporters to other locations. Projected loss of revenue over the past year is approximately $30,000 per year.
b. Despite providing only the minimum raises for staff of 1% for the past year and proposed for this year, staff costs continue to have the largest impact on the expense side, especially due to escalating health care costs rising at a rate of around 10% per year. Current yearly health care premiums paid by the church for the staff total $83,136. Under Diocesan mandates, we have no control over these costs, except through layoffs of staff.
c. Since we are one of the larger churches in the Diocese, our Fair Share Assessment continues to rise each year with an increase of approximately $5,000 last year to $83,000 per year.
d. One bright spot in the budget is the cost for maintaining the building. The Raise the Roof Campaign was so successful that many capital improvements to the church have been paid for from leftover funds from the campaign and income from our Heritage Fund. The weatherization project and new HVAC system will result in substantial energy savings going forward.
How do we propose to reduce the current shortfall?
The Task Force is proposing a five-prong plan to address what it perceives to be the need to generate an additional $100,000 per year to reduce the budget shortfall to $50,000 per year long-term. Here are our recommendations.
a. Thanks to a robust stock market, and the wise management of our Consolidated Fund by our Investment Subcommittee managed by Becky Hammell, we now have over $400,000 in discretionary funds available to cover the shortfall as we implement a 3-year plan to increase revenue. This is not a permanent solution to the budget problem but does allows needed, temporary breathing room going forward.
b. The Stewardship Committee Co- Chairs are developing a plan to challenge the congregation to increase annual giving in each of the next 3 years to substantially address this shortfall. An announcement of goals for the next 3 years will be forthcoming in the Fall.
c. The Fundraising Task Force is looking at providing “passive” fundraisers such as selling Giant Cards, AmazonSmile.com and Soles for St. John’s collection. The current annual events (Apple Butter Festival, Cookie Walk, and Preschool fundraising plans) will continue and we hope to add one additional event to help increase the annual dollars earned for the general fund. An announcement of the fundraising plans will be announced to the congregation soon.
d. A temporarily restricted account to cover staff costs will be available beginning July 1 and leadership is encouraging individuals that are fortunate enough to give to St. John’s above and beyond their regular pledge to consider making gifts to this account. The account is titled “Restricted Staff Account”. We are hopeful that this fund can reach and maintain a balance between $25,000 and $50,000 each year to help offset rising staff costs, with emphasis on health insurance increases.
e. The Seymour and Joan Ewing Staff Ministry Fund has a balance of $234,754. This Fund is presently used to offset staff costs from a distribution of 5% of the value of the Fund each year. To assure that the church can maintain the present staff for the long-term, we are encouraging planned and major gifts to the fund to reach a goal of $1,000,000.
What about reducing expenses to close the revenue shortfall?
Most of the budget is fixed by small costs for various operations such as worship, church school, etc. Reducing these costs over the years has been helpful but only marginally affect the overall budget. The bulk of the budget is due to staff expenses. So, the only alternative to increasing revenue is reducing staff. The problem then requires determining which staff are to be laid off or have hours reduced and whether is this in the best interest of the future of the church to provide quality programs and attract new members. The success of implementing the 3-year plan to increase revenue will determine whether hard decisions will need to made pertaining to reducing staff.
Is the current staff level justifiable?
This question is always relative to the point of view of each parishioner. For new families to the church, a youth director is essential. For our aging population in the church a pastoral priest is desired. For many, the opportunity to worship and come together at different times of the week is important. A sexton and parish administrator are critical to the continued operation of the church. Finally, St. John’s without a choir director would be considered heresy. Any loss of staff would result in a void in an essential function to provide and care for our parishioners resulting in a probable decrease in the growth of the church.
What are we asking from you?
As we emerge from this pandemic that had a detrimental effect on many of us, we ask your participation in the process by honestly discussing your view about how you can support St. John’s over the next 3 years as we implement this plan. You may have some idea or suggestions on what should be done to make St. John’s more attractive to new members or maintain current membership. You may have suggestions for fundraising or other ways to increase stewardship or gifts to St. John’s. You may have ideas about how parishioners can volunteer and use their skills to help address various needs at the church. We all can help in some way to make a difference.
Please take the time to sign up and attend the congregational meeting at the church on June 9 at 6:30pm. You can also watch the meeting on Livestream or watch a recording of the meeting on the church website. Most importantly, take the time to reach out to one of the Task Force members to discuss the 3-year plan and give suggestions and comments. Although, we can’t all agree on how to move forward, it is vital that we listen to each other and do our best to make St. John’s a wonderful place to worship.
Contact information for Budget Review Task Force Members:
Alvin Blitz – Treasurer-Life Member
John Newbold - Life Member
Don Kutz – Life Member Emeritus
Linda Myers – Clerk
The Revd. Adam P. Kradel – Rector
The Revd. Melissa Q. Wilcox – Associate Rector
Ms. Aimee Confer – Director of Children and Youth
Mr. Brian Rotz – Director of Music
Mr. Josh Edgington – Sexton
Mr. Larry Alexander – Parish Administrator
St. John's Episcopal Church
P.O. Box 612
Carlisle. PA 17013