Reality check’ needed after budget shortfall

With a deficit of more than $500,000 for 2004, the financial management and development committee of General Synod (the national office of the Anglican Church of Canada) may have to amend the 2005 budget, said treasurer Peter Blachford.

The 2005 budget forecasts revenues of $10.57 million and expenditures of $10.72 million. Un-audited year-end figures for 2004 show a drop of $130,000 in diocesan contributions, a $150,000 shortfall from Anglican Appeal and a loss of $225,000 from the Anglican Book Centre (ABC), the church’s retail arm.

Briefing a winter meeting of the Council of the North, a grouping of financially-assisted dioceses, Mr. Blachford said General Synod is operating under a “hold-the-line” budget.

“There was a reality check after year-end figures which showed that returns were down,” said Archbishop Caleb Lawrence, vice chair of the Council, which met in late February in Winnipeg.

In an interview, Mr. Blachford said he remained optimistic that the 2005 budget would remain balanced since any discrepancy between revenues and expenditures will be offset by the anticipated recovery from the federal government of money relating to residential school expenditures; internally designated trusts and expected reimbursements from the final settlement of General Synod’s new building will also be brought in as income.

But, he said, “we’ll have to meet and look at the budget assumptions we made and see if these are realistic given what we know happened in 2004.” He said that some adjustments might have to be made when the financial management and development committee meets this month.

Last November, the financial management and development department had projected a shortfall of $200,000; it also projected 2004 expenditures to be over-budget by $264,000 due to additional costs associated with the move from the old offices at 600 Jarvis St. to 80 Hayden St., both in Toronto.

Asked why a projected income of $200,000 from ABC for 2004 turned into a loss of $225,000, Mr. Blachford said, “I think the move was more disruptive to ABC than we’ve realized. They were shut down for one month.”

Walk-in traffic after the move was also down considerably, said ABC manager Dan Benson. He added that the cost of running the business is higher in the new building. For instance, he said, with the warehouse space 50 per cent smaller, ABC is able to store less inventory and must spend more on shipping charges to restock it. It has also had to rent space in an off-site warehouse to store some of its goods.

Mr. Blachford said a committee is looking into other factors that may have contributed to the shortfall in ABC revenues, including a failure to link the accounting system with the store’s inventory system.

Meanwhile, he also said that while Anglican Appeal donations increased by four per cent to $760,000, compared to $730,000 in 2003, the appeal failed to meet its net profit goal of $650,000.

Mr. Blachford said contributions to the $25-million residential school settlement fund have continued to put a strain on diocesan finances and, consequently, their contributions to General Synod.

“It’s becoming tougher and tougher on individual dioceses,” he said, adding that other factors including the aging of congregations, has affected parish finances. “Anglicans are aging. You see it in some of the parishes where the youth has not taken over the mantle of religion the way our parents did.”

He said the Anglican Church of Canada needs to address the issue of congregational development and stewardship to solve its financial challenges. “We’re never going to stop the aging and people retiring and thinking they have less money,” he said.