Budget hints at reprieve

Orillia, Ont.

The Anglican Church of Canada will remain solvent at least until the end of 2002.

A budget presented to the Council of General Synod in November by treasurer Jim Cullen gave a rosier picture than had been painted a year ago.

CoGs heard predictions of a balanced budget, before residential schools expenses, for both 2001 and 2002, instead of insolvency at the end of 2001, which was a distinct possibility a year ago. The improved, but still tenuous, outlook calls for revenue of $10.3 million for 2001, and expenses of $10 million, a five per cent increase over anticipated revenue of $9.9 million.

Revenues for 2002 are also pegged at $10.3 million.

A surprise surplus for 2001 of $337,210 will be used to offset prior years’ operating deficits.

While describing himself as optimistic, Mr. Cullen continued to counsel caution. “We are in a recession, and (this) could impact on diocesan revenue,” he said.

“Commercial revenue is also a concern. There could be a drop in advertising to the Anglican Journal, and ABC bookstore sales. Interest rates are falling and the loss of Canada 3000 could mean an increase in travel costs for General Synod.”

Mr. Cullen noted that one area of uncertainty concerns the recent federal government proposal on residential schools settlements.

In November, Ottawa unilaterally announced it would pay 70 per cent of proven out-of-court damage settlements related to native residential schools. It also rejected churches’ requests for a cap on liability in lawsuits where they are named as plaintiffs.

Mr. Cullen attributed the improved picture in 2001 to higher than expected diocesan contributions – $58,000 over the budget of $8.8 million – to improved donations to the Anglican Appeal, and to unexpected undesignated bequests and related fees of $390,000, up from a forecast of $106,000.

Explaining the discrepancy between early expectations and actual results, Mr. Cullen said, “The predictions for 2001 were originally made in extreme uncertainty. The Anglican Appeal was tanking and we were never certain of the level of diocesan support.”

There were no surprises in spending on residential school litigation and support services which came in, as predicted, at about $1 million.

About 87 per cent of General Synod’s revenue comes from the 30 dioceses through proportional giving which provides a common basis for dioceses to measure their contributions to General Synod, according to the budget documents presented at CoGS.

Each diocese is supposed to give 26 per cent of calculated revenue to General Synod. “Most dioceses below the target have been increasing their support,” the documents said. However since dioceses hit hard by litigation costs, such as Qu’Appelle and Algoma, will be forced to reduce their contributions, only a marginal increase of $68,535 is predicted for 2002.

Revenue from the Anglican appeal fell about 40 per cent in 2000 over the previous year, but is expected to net $60,400 more than the $300,000 predicted for 2001. “The message that Anglican Appeal donations are not going to support litigation is starting to register with donors,” Mr. Cullen explained.

Appeal revenue next year is expected to increase to $403,000, still below the $623,000 raised in 1999.

Net contributors to General Synod revenues are the ABC bookstore and the publishing department. Income was boosted by strong sales of the new hymn book Common Praise. These sales are expected to level off in 2002.

Program spending for 2002 will be held at 2001 levels.

One budget surprise last year was $75,000 in legal fees unrelated to residential schools litigation. “When litigation occurs for whatever reason, our lawyers have to get involved,” said Mr. Cullen.

When CoGS met, returns on investments were falling in the wake of September’s terrorist attacks against the United States. “We are heavily invested in fixed income securities, and it will affect our cash flow next year,” Mr. Cullen said.

He noted that planned giving figures are difficult to predict. “Until a person dies we don’t know what a bequest is for or if it is coming.” The church has started the sale of annuities again, after stopping them last year. Now annuities are immediately re-insured.

Information Resources, which includes the Anglican Journal, MinistryMatters, the web site, Anglican Video, library services, archives and central services, was budgeted for $1.2 million in 2002.

The budget for residential schools related costs for $2002 is pegged at $1.2 million.

The anticipated unrestricted surplus for General Synod will be $4.3 million at Dec. 31, 2002.

Mr. Cullen said the process to acquire new office space was begun before residential schools lawsuits reached crisis proportions. Completing the deal increases General Synod’s assets.

St. Paul’s church and General Synod share proceeds from the $9 million sale of the Church House property. General Synod’s share will be $3.65 million.