My report to St Stephen’s Annual Parish Meeting on Sunday, October 29th will show that over the past 12 months giving at St Stephen’s has fallen by 11 percent from $283,173 to $252,453.
At the same time, the parish’s total income has declined by almost 15 per cent (or $54,032) from $369,220 to $315,188. As a consequence, net income after expenses fell by a whopping 80 percent from $41,767 to just $8,393.
These declines have caused on-going cash flow problems that have required the parish to meet its obligations by borrowing against its $50,000 revolving credit facility and by withdrawing a portion of the earnings generated by its modest endowment portfolio.
Earnings from the endowment’s investment portfolio went down over the period by just over 21 percent—or $13,730—from $64,861 to $51,132. But the strong stock market advances of the past 12 months have left the value of the endowment portfolio slightly up on that of October 1st, 2016—$226,427 compared with $223,445.
Despite the precipitate drop in income, St Stephen’s remained modestly in the black during the period under review by drastically cutting overheads.
Banking and finance costs, for example, were reduced by 43 percent from $39,221 to $22,357, while building and grounds maintenance costs went down by slightly over 51 percent from $19,759 to $9,604.
In fact, costs were down in most areas of expenditure, including operations and administration (down 7 percent) and advertising and newsletter (15 percent). Even personnel costs were reduced by 1 percent.
The only major expenditure increase was for the Choir of Men and Boys—up from $13,548 for the previous 12 months to $22,644. This, however, reflects increased overheads associated with the rebuilding of the choir. Even so, the cost of the music program still remains far below historic levels.
St Stephen’s, financially speaking, runs a very tight ship. There is very little fat to trim. Indeed, the only way to reduce overheads substantially would be to cut programs or lay off personal, neither of which are really viable options.
But the parish has only three full time employees—the rector, the choirmaster/organist, and the director of pastoral care—none of whom are rewarded beyond their dreams of avarice. And the parish’s missions are run on a shoe-string by lay volunteers and our cadre of non-stipendiary clergy.
By proceeding on our present financial course, however, the consequence will inevitably be a continuing erosion of our endowment portfolio. After all, operational costs fluctuate—thanks in large part to the weather—and, from the investment perspective, bull markets do not last forever.
The members of the Vestry addressed the situation at their September meeting by pledging to increase their personal giving to the parish by 10 percent annually, and they sincerely urge members and friends of St Stephen’s to follow their example.
It has been some years since the vestry—mindful of the state of the economy—has formally asked for an increase in giving. However, with the economy finally emerging from the recession, the vestry asks you prayerfully to consider increasing your pledge.
A 10 percent across–the–board increase in income would go a long way to putting the parish’s finances back on a sound footing.
Respectfully, yours in Christ,
—WILLIAM HAWKINS
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