Budget 'leaves little room for contingency': threats remain to expected revenue.

Mississauga, Ont.

The national church's governing body has approved a balanced 2005 budget but one that the treasurer said "leaves little room for contingency," and where significant threats remain that could reduce anticipated revenues for the year.

The 2005 budget, presented in members of Council of General Synod (COGS)--the Anglican Church of Canada's governing body between General Synods--at their fall meeting here, forecasts revenues of $10.57 million and expenditures of $10.72 million, the same as the 2004 budget approved by CoGS in late 2003, until it was reduced midway last year to $10.3 million to avoid a deficit resulting from lower-than expected donations.

(The 2005 discrepancy between revenues and expenditures will be offset by the anticipated recovery of $146,500 relating to residential school expenditures.)

A balance of $527,000 from the Samuel & Edna Mae Harris Trust Fund, which under a new legislation was declared as income for 2004, wiped out a projected deficit of $468,717 and left an expected surplus of $58,283.

"This adjustment arises from a 1997 change in accounting rules relating to unrestricted trust funds, where there is no obligation to maintain the capital," said Peter Blachford, treasurer of General Synod, the church's national office, in his report to COGS. "When this legislation was introduced, the balance of the Samuel & Edna Mae (Harris) Trust Fund should have been declared as income. It was set up as a deferred contribution instead. Now that this has been identified, it is the opinion of our external auditors and the former treasurer that it should be properly accounted for in 2004."

The 2005 budget projects an increase in revenues of four per cent above 2004's lower-than-expected performance. Nonetheless, it warns that 2005 will be a difficult year, and there are early indications that 2006 and 2007 "will be even more of a financial challenge."

As of late November, year-end revenues for 2004 were expected to be $200,000 less than budgeted, mainly due to lower-than-expected income from the Anglican Book Centre (ABC) operations and expected shortfalls in projected investment income, undesignated legacies and planned giving fees, said a report of the Financial Management and Development department. "Expenditures in 2004 are expected to be about 2.4 per cent ($264,000) over budget, mainly due to additional costs associated with the move to 80 Hayden, and the additional cost of outsourcing our printing needs," the report said.

The 2005 budget projects that diocesan contributions, which normally account for more than 90 per cent of General Synod's revenues, will remain at the same level. However, the report also acknowledged that meeting the remaining half of the $25-million residential school settlement fund obligations "will continue to put a strain on diocesan finances," due to a number of factors including donor fatigue and competing needs.

There is also a "distinct danger" that dioceses would have to use proportional giving funds--those funds that are requested of them each year to support the work of the national church--to meet their obligations to the settlement fund.

(In 2003, the Anglican Church of Canada signed an agreement with the federal government limiting the church's liability to $25 million in lawsuits concerning a now-defunct residential school system for native children. The fund is paying 30 per cent of settlements awarded plaintiffs proving sexual or physical abuse in Anglican-run schools.)

The raging debate over the issue of same-sex blessings will continue to have a "major effect" on the budget as it did on the previous year, with some parishioners withholding contributions amid the uncertainty, the report also warned.

The effects of other initiatives in financial development relating to the church's plan to fund its work, entitled Letting Down the Nets, have not been taken into account in the 2005 budget.

The 2005 budget rules out staff reductions. Instead, some departments, notably Partnerships, will continue to suffer cuts in their slice of the budget pie. Partnerships, which receives the highest percentage (27 per cent) of the total budget, saw its budget cut to $2,890,382 from $2,994,010 in 2004--a decrease of $103, 628.

The budget for the primate's office was increased to $390,000 in 2005 from $294,790 in 2004, including an increase in the allotment for the primate's travel. It restored provisions for salaries and travel expenses that were removed after the retirement of the former primate, Archbishop Michael Peers, and the departure of his principal secretary, Rev. Michael Thompson, in early 2004. Mr. Blachford said that one of the priorities of the new primate, Archbishop Andrew Hutchison, is "healing the disconnect within the church and this involves face-to-face meetings with people." Some travel costs are reduced when those who invite the primate pick up the tab, he said. The budget for the primate's travel will increase to $50,000 in 2005 from $24,000 in 2004.

General Synod has traditionally not allocated money for the primate's spouse to accompany the primate in travels. However, the bishop of British Columbia, James Cowan, has given the primate's office $30,000 from his diocese's undesignated bequests to enable the primate's wife, Lois, to accompany him in some travels. "The bequest was one which was left for the use and discretion of the bishop in new work," Bishop Cowan told Anglican Journal. "The wife of the primate is rarely ever able to travel with him because there is no money in the General Synod budget for such a possibility. I believed it to be good use for a portion of this new work money."

Council of the North--a grouping of financially-supported dioceses--received the same grant as 2004. At $2.5 million, it represents 23 per cent or the second largest item in the overall budget. Other departments received the following budgets:

General Secretary's office: $593,200 (up by $7,740 from 2004)

Archives: $128,870 (down by $3,000)

Faith, worship and ministry: $470,000 (down by $11,830)

Information resources:

Anglican Journal:

$593,683 (up by $9,942)

Other resources (Web site, Anglican Video, Library Services, Central Services and Administration): $693,000 (up by $4,080)

Financial development: $300,000 (up by $30,430)

Financial management Administration: $944,000 (up by $15,540)

Service section: $155,000 (up by $106,400)

Property expense: $500,000 (up by $32,400)

Depreciation: $94,500 (down by $5,500)

Provision for staff benefits: $176,000 (up by $1,000)

General Synod provision: $150,766 (down by $28,834)

General Synod 2005 budget overview

Revenue 2005

Diocesan contributions        83%

Anglican Appeal               8%

Investment income             1%

Planned Giving                4%

ABC Publishing &
merchandising                 2%

Other revenue                 2%

Expenditure 2005

Partnerships                  12%

Council of the North grants   23%

Financial Development         3%

Information Resources
incl. Anglican Journal        12%

Financial Management          12%

General Secretary              7%

Faith, Worship and Ministry    4%

Primate's Office               4%

House of Bishops               1%

Property expense
(incl. depreciation)           6%

General Synod provision        1%

Note: Table made from pie chart