Where’s the Money?

By Tom Lambrecht –

Faced with the possibility of an impending split in the denomination, United Methodists are rightly worried about the financial impact of the newly proposed Protocol for Reconciliation and Grace Through Separation. Giving to the denomination’s general apportionments fell immediately after the special St. Louis General Conference last February. A number of annual conferences are struggling to meet their budgets. The General Council on Finance and Administration has proposed an 18 percent cut to the quadrennial budget for 2021-24.

Pensions

Many clergy, particularly retired clergy, are worried about their pension. Just as some employees and former employees of major corporations that have hit financial problems have lost part or all of their pensions, what would happen to UM clergy pensions if the denomination separates?

The good news is that all the proposed plans of separation have made provision for continuing clergy pensions at the current level. Wespath has developed plans and legislative language that would allow clergy in any new Methodist denomination to continue participating in the clergy pension program. Earned benefits would continue at the same level as previously expected. Unfunded pension liabilities would be allocated between the post-separation United Methodist Church and the new Methodist denomination(s), with no payments for these liabilities required.

The only exception to the continuation of pensions at the current level would be for congregations and clergy who go independent and do not align with a new Methodist denomination. In that case, clergy pension amounts would be converted to a cash balance, and they would lose the ability to see further growth in some parts of their pension program. And congregations that go independent would have to make a pension withdrawal payment that has been averaging between three and six times their annual apportionment. The incentive really is to align with a new Methodist denomination, rather than going independent.

(Retired clergy health benefits are set separately by each annual conference. Annual conferences of the post-separation United Methodist Church and the new Methodist denomination(s) will need to determine what health benefits they will give to retirees.)

Financial Support for New Methodist Denominations

One of the aspects of the newly proposed Protocol agreement for separation that appears unfair is the allocation of $25 million to a new traditionalist Methodist denomination that forms and $2 million to any other new Methodist denominations that might form. Progressives complain that a denomination they believe unjustly discriminates against LGBTQ people should not receive any money upon separation. Traditionalists believe that the amount of money is just a drop in the bucket compared to the total assets of the general church.

It is important to note that the Protocol agreement is the only proposal that came to any agreement about the amount of funding for the new Methodist denomination(s). The Indianapolis Plan team was unable to agree on this point and individuals submitted different proposals for how much money should be allocated. The UMC Next Generation Plan has no specific amount to be given to new denominations, but stipulates that General Conference budget a suitable amount to help with transition expenses. There is little confidence that General Conference can easily reach agreement on an amount of money without it turning into a major point of conflict. The fact that it is already agreed to in the Protocol makes it much easier to come to an agreement at General Conference. (A bird in the hand is worth two in the bush.)

Where did the $25 million come from? Here is how that calculation was arrived at. (Figures are taken from the General Council on Finance and Administration website – gcfa.org.)

Total assets held by the general church and its agencies amounts to over $1.536 billion dollars. But about half of that amount, over $753 million, is owed to others as liabilities. That leaves net assets of about $783 million. Of that amount, about $204 million is in buildings, property, and other fixed assets. Donor restricted assets total about $460 million. That leaves about $120 million in unrestricted assets that would be available for any kind of division of assets. (It proved unrealistic to expect to share in the proceeds of any buildings or property that might never be sold, and the mediation group did not want to cause the sale of buildings or properties. The legal complications that would be involved in trying to divide restricted assets proved to be too much to overcome, taking those assets off the table.)

The negotiation resulted in one-third of the $120 million being allocated for the new Methodist denomination(s), about $40 million. $2 million was set aside for potential other denominations that might form, while $38 million was set aside for a traditionalist denomination. Traditionalists agreed to forego one-third of their share ($13 million) to give it to fund ethnic ministry plans and Africa University. (The post-separation United Methodist Church agreed to set aside double that amount for the same purpose, $26 million, leading to a total of $39 million for ethnic ministry and Africa University. This represents continuing the current level of funding over the next eight years.) The goal with the ethnic minority funding is to ensure that some of the most vulnerable populations in our church are not harmed by the separation.

The $25 million that is left will be paid to the new traditionalist Methodist denomination over the four years 2021-24 in equal installments. It can come from apportionments paid to the post-separation United Methodist Church during that time, drawn from UM reserves, or come from other sources.

Apportionments

The General Council on Finance and Administration is looking at the possible impact on apportionments of a separation. It is undeniable that a significant loss of members and churches from the post-separation United Methodist Church would cause a decline in funding available to the general church agencies and programs. Since it is hard to forecast how many churches might separate, it is difficult for GCFA to budget for apportionments for the next quadrennium. The post-separation United Methodist Church will need to make adjustments to programs and denominational structure in order to account for reduced financial resources available.

By contrast, the new Methodist denomination(s) forming from this separation will be able to start with low overhead. For example, in its draft Book of Doctrines and Discipline, The Wesleyan Covenant Association envisions fewer and smaller agencies, capitalizing on partnerships with existing ministries. This would allow the denomination to care for essential functions, while preserving the ability to respond nimbly to changing needs of congregations and cultural circumstances. In addition, such denominational agencies will see their primary focus as resourcing local churches for mission and ministry. They should add value for the local church, not be a drain on its financial resources. The result should be dramatically lower apportionments in a new traditionalist Methodist denomination, with more money available for mission and ministry at the local level and beyond.

Is It Fair?

Talking about money is difficult. Money is often a symbol of our values, hopes, dreams, beliefs, and power. All of these non-monetary issues are drawn into discussions about money, particularly at fraught times in the life of a family or a church. Many traditionalist observers have voiced concerns that the amount of funding given to the new denomination upon separation is not commensurate with the resources that contemporary traditionalists and prior generations have contributed to the church over the decades. As legitimate as these concerns may be, the negotiated settlement was conceived in good faith based on the calculations and limitations shared above.

More importantly, this separation will test the faith of all of us – those who remain and those who separate. Do we really believe that “God owns the cattle on a thousand hills?” Do we trust God to supply our needs, both at the congregational and the denominational level? We will have a great opportunity over the next few years to step out in faith and trust the One who made us, who redeemed us, and who provides and cares for us.

Thomas Lambrecht is a United Methodist clergyperson and the vice president of Good News. 

Comments

  1. Hindsight is 20/20. But it’s clear now … evangelicals should have walked 3-4 decades ago. Instead, unity and the system were held out as golden calves, and even self-professed evangelical clergy withheld information from members. The condition of the UMC was not materially different in 1990. Remember the Reimagining Conference sponsored by the UMW? Covered by Good News, but clergy – all of them – just moved on. This day, this necessary, probably best achievable, but UNFAIR deal, is largely on the heads of so-called conservatives that for decades could not muster the guts to act in faith until too late. Now, not much is left, and a lot of faithful folks, many gone on now, were deceived.

    • Gary Bebop says

      “…yet fools talk on and on” Ecclesiastes 10:14).

    • Roy Gearhart says

      Many would agree that this is overdue. It is the reason I joined the WCA in 2016. It was the first group of evangelical leaders who expressed the will to leave if things would not change. While working toward renewal, WCA leaders have also been preparing practically, even beginning work on a new Book of Discipline, for separation. The Protocol is fraught with many areas that could be debated over for its fairness. Yet, we are at last looking at an option to start fresh that we have never had before. It is time. I am ready to look forward to the best the future may hold.

  2. John Cobil says

    Whenever anyone says “It’s not about the money, it’s the principle”, you know it’s about the money. In this case, however, I think any financial settlement that allows local churches to leave with their building and their pastor’s pension is fine. However (yes, here I go), it seems patently unfair that the group who walked away from the UMC’s principles will be the UMC going forward. I saw a comment on another article that compared it to a divorce in which the faithful spouse gives up everything else to keep the kids. Brilliant analogy.

  3. Stephen Rhoades says

    Great, understandable summary. Thanks for providing critical resourcing information for congregations who must make difficult decisions.

  4. This is the part that has me scratching my head.
    “And congregations that go independent would have to make a pension withdrawal payment that has been averaging between three and six times their annual apportionment. The incentive really is to align with a new Methodist denomination, rather than going independent.”

    Exactly how is this withdrawal payment calculated? Why would a church that has always paid its full apportionment owe any money if it decides to exit?

  5. Thank you for this well written summary. I worry that there are financial issues as well as non-financial ones that have not been covered, or even thought of in this process so far. Hopefully, there will be provision included for neutral mediation of any issues that crop up during this reorganization.

  6. George Owen says

    Where do I begin? Yes, for the last 48 years, as someone mentioned in an earlier comment, is right. Instead of drawing the line between Truth and Falsehood, we let it run on for years without any meaningful consequences for disobeying the Scripture, not to mention our Discipline. I can remember back in 1972 (I was a student in seminary) when the issue of the practice of homosexuality was brought up at the General Conference. I can remember thinking back then, “How can the General Conference establish a study committee to study an issue that is explicitly condemned in the Scriptures?” The Scripture is clear on the immorality of the practice of homosexuality, and how it is drastically different from God’s nature, character, and holy standard of moral living. What that action did 48 years ago was simply to open the door for the heretical statements and actions that have persisted through the last 48 years. Our leadership did not have the backbone, nor the courage, to uphold the discipline of our Church with meaningful repercussions. We simply let things slide by. With this protocol agreement, if it is such a just agreement, why aren’t the progressives and centrists, who are against the teachings of the Scriptures, clamoring to be the ones to take the $38 million and run and start their own denominations? Yes, the $25 million that was agreed upon, after all the deductions were made, may seem fair to those who devised such a plan, but when I read the amount of the total assets of the Church, where is the justice in leaving the bulk of those assets in the hands of an apostate people? My understanding of what the Lord says is that, that is wrong. This protocol, as it stands, is not a winnable solution for the Truth. I’m constantly keeping my heart and mind open to discern my Lord’s Will, which I have done throughout my 50+ years of ministry, and in this instance, every fiber of my being tells me is to fight for God’s TRUTH. Everything inside of me tells me that we are to go to the Cross for Him (just like Paul, the early apostles, and others through the centuries), not to run. His Truth is what is being compromised to a world that needs to see that Truth being firmly upheld. For the last three years (this year will be the fourth) I, personally, have submitted a petition to my Annual Conference entitled, “A Petition on Human Sexuality” (Subtitle, “A Petition on the Practice of Homosexuality”), that has never been brought to the floor for a vote. The petitions and resolutions committee has simply suggested to send it back to the author and let him/her send the petition to the General Conference, which I did. It appalls me to think that our leadership did not have the courage to bring it before the body of the Annual Conference to let the Conference make a choice. That is why we stand, or should I say, “stumble”, in the UMC today. For the sake of appeasing the misguided opinions of the world, we have allowed the influence of those who are against the Holy Scripture’s final authority.

    • I understand your pain. You have been faithful to an unfaithful
      denomination for many years. When I left the UMC ministry 2
      decades ago, I could see it was “all about the money, honey.”
      My contribution was not going to change anything. Where is the
      UMC headed? I think this recent article from The Pioneer Press at
      the Twin Cities.com sums it up.
      “Cottage Grove church to usher out gray-haired members in effort to attract more young parishioners.” by Bob Shaw. (Yep. It is a UMC
      in Minnesota)

      The denomination is dying. The leadership is poor. It looks to me like it is time to move on and let the dead bury the dead. It seems unfair the way things are being divided but getting out with your church building is a good start. If they let you. If things do not change, pastors might as well get a real estate broker license. It is about the only way they will make ends meet. By selling church properties.

      • My guess — there are many on the huge disparities UMC payroll in front of their calculators today running numbers. Obviously top heavy in the USA with liberals, especially among the ordained clergy, how will the new traditionalist denomination deal with them when they want a job or want to keep their job? Or, how will traditionalist folks trapped in a liberal situation be treated? Those dependent on their UMC paychecks for their livelihoods are obviously in so much greater pearl than laity who can simply and easily redirect their contributions to different places.

      • George Owen says

        Thanks for your reply, Anthony. However, I would like to say, I’m really not concerned about the survival of the UMC as I am about God’s Truth being honored. I know who is going to ultimately win, God’s truth will be verified and proven. But when I received God’s call in 1967, attached with that calling was his call to me personally, not necessarily to anyone else, was to stay in the UMC to declared His Truth uncompromisingly and not leave the denomination to the Devil and his cohorts. This is my calling and it doesn’t matter how the Church treats me. The Lord has proven through the years to be faithful in all circumstances, even when I have found it hard myself to retain a uplifting and positive attitude. Those circumstances have always been worked out for my good (Romans 8:28).

  7. John Loper says

    How can this agreement be “conceived in good faith” and yet remain unfair? It is interesting to note how our notions of “justice” fluctuate with mission. As usual, when the money is on the table the Christianity is out the door. This is a bureaucratic issue in which “faith” has no part. In this I am reminded of a quote my father had on the wall in his garage, “In God we trust… all others pay cash.”

  8. Jim Wolfgang, elder, Memphis Conference says

    It surprizes me the denomination has so many millions of dollars at hand, I always thought my tithes and offerings that went to the general church were used very soon for the various needed ministries. It looks like quite a lot simply went in bank accounts; evidently the “need” wasn’t as pressing as I was led to believe. Until recently I believed also that the Council of Bishops was comprised of Christian leaders of competence and integrity, that decisions of General Conference were authoritative for the entire denomination, and when clergy said their vows of covenant to the denomination that they would believe in, teach, and uphold the Discipline and be honest when they did so. I wish it were otherwise, but I believe the U.M.C. has become lost to traditional believing United Methodists and it cannot be recovered: we must start over and insure the weaknesses of our Discipline not be repeated. The Discipline was based upon honesty, integrity, and strongly held covenant promises and no church or denomination can function without those “disciplines”. The Wesley Covenant Association has a new discipline largely intact and it has many of the “fixes” in place. I am prayerfully trying not to look backward and become bitter at the wreckage caused by the many who have and are breaking our covenant, they are responsible for this shipwreck. There will be a new authentic traditional Methodist church from the refugees of this breakup, and one can look forward with hope and joy to this new birth of authentic Methodism. “Forgetting what lies behind and straining forward to what lies ahead, I press on toward the goal for the prize of the heavenly call of God in Christ Jesus. Let those of us then who are mature be of the same mind; and if you think differently about anything, this too God will reveal to you. Only let us hold fast to what we have attained” (Phil. 3:13-16).

  9. Church (and by extension, denominational) discipline as outlined in scripture is there for a reason. It is not optional. Without enforcement mechanisms, the WCA can draw up new BODs all day and it won’t amount to anything. Without enforcement, there is no covenant, by definition. God did enforce the covenant we broke with Him – by pouring out His enforcement on the Son.

    Church discipline is for more than just cheating husbands. It is, in fact, primarily to guard doctrine.

  10. What sorts of new names are people kicking around for WCA’s new denomination? Here are some nominations to get the discussion started, if I may be so bold!

    Methodist Church
    New Day Methodist Church
    Methodist Church of the Redeemed
    Methodist Church – Missouri Synod (Ha!)
    Wesleyan Disciples Church
    Wesleyan Covenant Church
    Renewal Methodist Church

  11. Gary Bebop says

    Those who are whining here about what they have lost may lose even that which they think they have kept. If the mediated Protocol is wrecked by the ungrateful, the one agreement that includes the Africans will have been smashed. Historical forces will be unleashed that will be unfriendly to traditionalists. Don’t count on controlling those forces at Minneapolis.

    • Yes, traditionalists in the United States and Europe are already trying to swim up a flooding river. To take this tributary and depart the flood with its energy depleting effort is wise. Yes, there is frustration in what appears to be or is being perceived as a negotiated unfair-to- traditionalists deal. I’ve expressed my frustration with that. Fairness is still a big part of American. Each team still has three outs. But, it will be better to leave this termite infested and crumbling building (UMC) with the solid oak furniture in toe so as to to go (actually stay/keep property) and set up quarters elsewhere in termite free quarters. Otherwise, we will all surely go down together fighting while failing to summon the Orkin Man.

  12. Phil Brewster says

    Within the broader historical context, organized religion and all other major institutions are far eclipsed by the military as trusted institutions in the US, (according to Gallup), a dramatic change from just a few years ago. Decades of declining church attendance have caused historians to characterize Europe and North America as “post-Christian.” UMC is not separating due to disagreement about how to grow the church with families and children, we are separating over just the opposite. The funds reserved for ethnic ministry and Africa University seems an important win for the Traditionalists. Perhaps it shall make us new again.

    • Just read the Gallup polling dated July 8, 2019 and that should be a wake up call for delegates going to GC 2020.

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