As the diocese looks to a post-pandemic future, some difficult conversations about its financial outlook are already underway. In November, Synod will be asked to approve a budget for 2023 with a deficit of $593,100.
The budget has already gone through several revisions to reach this point. “The first process involves each of the directors and other people responsible for budget items making initial submissions to the budget working team, which is essentially the Finance Committee of the diocese,” says Canon Rob Saffrey, the diocese’s executive director. The Finance Committee, which reports to Synod Council, includes six lay and clerical volunteers, supported by diocesan staff.
After a first draft of the budget resulted in a deficit of $1.2 million, the committee asked the directors to look at their submissions again, reduce expenses if they could and consider not spending on any new projects in 2023. That second look, along with a $200,000 reduction from re-modelling episcopal leadership in the diocese, significantly lowered the deficit. “People did a fair and honest attempt to reduce expenses,” says Canon Saffrey. “The large part of the deficit is due to decreasing revenues, not so much increasing expenses.”
The remaining deficit of $593,100 will be funded by a $400,000 grant from Our Faith-Our Hope to support curacies in the diocese, with the remainder covered by a draw down of capital. “Basically, we have surplus funds from prior years, and we’re going to use some of those funds now,” explains Canon Saffrey.
Part of the challenge in crafting the budget was not knowing what ministry will look like emerging from the COVID-19 pandemic. “A number of areas quite reasonably had difficulty in estimating what their normal activity should be and would be in 2023,” says George Lewis, ODT, chair of the Finance Committee. “This is reflective of as much of a normal year as we can guess, coming out of COVID.”
Patricia D’Souza, the diocese’s controller, produced a detailed analysis of long-term historical givings to predict what level of income the diocese can expect in 2023 and going forward. Meanwhile, with Church life starting to return to normal, many areas of ministry that were on hold during the pandemic are starting up and spending money again.
Despite a hard look at both revenues and expenses, the Finance Committee members felt obliged to recommend the deficit budget. “That is not a result that we are satisfied with from a longer-term point of view, but we felt it was responsible to highlight that this is our structural deficit given our existing mission, operations and revenue sources,” says Mr. Lewis.
That structural deficit of about $500,000 is something diocesan leadership knows it will need to address in the coming months. “If we do nothing, we’re going to continue to have deficits in that range,” says Canon Saffrey. “Long-term deficits aren’t sustainable in any organization, so what is the diocese doing to address the budget shortfall going forward?”
With no plans or desire to ask for more financial support from parishes, diocesan leaders will be looking at new sources of revenue and consulting broadly with Anglicans about how to potentially cut expenses. “There’s no low-lying fruit anymore in terms of reducing items in the budget. I think that every dollar spent is well spent. If we’re going to reduce expenses, it needs to be part of a broad conversation with input from lots of people so that whatever we end up doing, people understand why and it’s supported,” says Canon Saffrey.
Mr. Lewis echoes those thoughts. “There’s no easy fix to the current situation. We have many strengths, missional and otherwise, but also opportunities to operate on a more sustainable basis,” he says.
Still, both Canon Saffrey and Mr. Lewis see cause for hope in the diocese’s immediate future despite the difficult decisions yet to be made. “We know that change is absolutely going to happen and has to happen. What I’m optimistic about is that with a strategic focus, there is life and there’s hope,” says Canon Saffrey. “We are going to have to change and to end some of the things that we’ve been doing. I do believe there’s a good long-term future for the Church, but it’s going to be a bit of a bumpy road in the interim to get there.”
The diocese also continues to have a strong financial bedrock in terms of property and the investments that help fund its operations. “There’s a tremendous legacy that we have and great stewardship that has been done of our investments to date by the Investment Committee, which oversees the managers of our fund. I see that continuing to be of importance,” says Mr. Lewis. He says he’s also buoyed by the increasing generosity of individual Anglicans. “While our numbers of congregants have declined over time, the average givings have increased, such that overall revenues from givings have remained relatively constant.”
The diocese is already starting to consider what the way forward will look like. The next budget will be a two-year budget for 2024-2025 developed alongside Cast the Net, a new visioning process designed to help the diocese meet the challenges and opportunities of the next five years. That process will take place over 18 months, with recommendations and calls to action coming to Synod in November 2023.
“The important thing is that the budget is really a reflection of what’s in the strategic plan, and that we have the resources to carry out the strategic plan. It’s not so much whether our expenditures are going up and down, but that we’re focused on an end,” says Canon Saffrey.
Mr. Lewis says he hopes that Cast the Net will help the diocese develop a vision for how it can operate on a more sustainable basis while supporting its mission and ministry. “We as a Finance Committee are delivering what might be a blunt message, but it’s not one without hope; in fact, it’s done in a way to challenge us and to point the road forward,” he says. “There’s this opportunity and, in fact, necessity to put the diocese on a sustainable financial footing.”
In the meantime, he says he’s honoured that Bishop Andrew Asbil asked him to chair the Finance Committee and grateful for the efforts of his fellow committee members: Mario Bartolozzi, the Rev. Molly Finlay, Leslie Hajdu, ODT, Vice-Chancellor Mark Hemingway and the Rev. Leonard Leader. “I’m tremendously impressed by the dedication of the lay and ministry teams I get to work with and observe the wonderful work they do,” he says. “We’re off to a strong start.”
Turning point came through listening