The financial health of the Diocese of Michigan is a story in two parts. The diocesan budget, once a source of anxiety and conflict at diocesan conventions, is now stable and healthy and passes each year with little discussion. We have not had an operating deficit since 2009. The financial picture in congregations, however, is varied and many congregations face financial challenges.
In 2018, the diocese approved an operating budget of $2.3 million. The diocesan budget is healthy, with a good mix of diverse, sustainable funding sources. The largest source of funding (69% of Operating Revenues) currently comes from apportionment pledges, followed by investment income and contributions.
As you can see in the expense chart below, 15% of our budget goes to supporting the ministries of the wider church–The Episcopal Church and beyond. Nine percent goes toward our outreach efforts in our region, our nation, and around the world. Twenty-seven percent of our budget goes to providing direct services to our congregations and congregants. Twenty percent of our budget supports the needs of the bishop and all things canonical. And the remaining portion of our budget (29%) provides administrative support for all missions and ministries of the diocese.
Want more charts? See more details about our diocesan budget history.
The apportionment formula for the Diocese of Michigan is 10% of the average Normal Operating Income from the last three parochial reports of each congregation. In 2016, for the first time in some years, every congregation made a financial pledge to the diocese. The number of congregations paying the full apportionment has been growing over the last several years. In 2018, the rate increased to 73%, compared to 61% just a few years ago. Likewise, the shortfall in actual apportionment payments compared to the full apportionment calculation has been steadily dropping.
Diocesan investment balances have continued to grow during this economic cycle, both from market appreciation and also from new bequests. The withdrawal (dividend) rate, while too high in the recent past, currently sits at a very prudent and sustainable 4.15% of the average market value of the last 20 quarters.
In addition to the operating budget listed above, the diocese funds ministry through income from investments. These ministries include the support of curates and theological education, as well as a variety of loan and grant programs overseen by the Trustees and Diocesan Council. Many congregations have received help with capital projects through these loans and grants.
Congregational Finances and Membership
Despite the recent growth in the diocesan budget, many of the trend lines at the congregational level are not as favorable. As highlighted on “The Diocese Today” page, congregational membership and average Sunday attendance are down throughout the diocese. The number of congregations is shrinking. The number of large (Program and Transitional) congregations is decreasing while the number of smaller-sized (Family) congregations is growing, as larger congregations shrink.
By contrast, the largest congregations are getting larger and, in all congregations regardless of size, the average pledge is growing at far more than the rate of inflation. These two factors are largely driving the growing apportionment revenue.
In short, while we face the same systemic challenges as The Episcopal Church and other mainline churches both regionally and nationally, the Diocese of Michigan has the resources to live abundantly and to answer God’s call in this next chapter of our life together.