by Chris Ritter
United Methodists are just a few short months from a unique opportunity to align with a new denomination. Our congregations have helped constitute multiple iterations over our 237 year history (MEC, MECS, MC, EC, EBC, EUB, UMC). But these re-affiliations did not involve decision-making at the level of the congregation. The Separation Protocol is different. Each annual conference and local church is given a choice… should they choose to exercise it.
The first post in this series looked at the advantages associated with being part of a denomination like the UMC. In this post we analyze the costs. UM congregations are something of a “captive audience.” Due to a hold on local church properties, the denomination has not always been required to justify the burdens it exacts and the controls it exercises. As the Separation Protocol disrupts this dynamic, many congregations will be asking for the first time: “Is this relationship a good deal?”
It was not always the case that the local church offering plate was the sole source of denominational funding. Prior to the late 19th Century, denominational boards and agencies relied upon direct fundraising to support their work. “Apportionments” were designed as a centralized flow of funding from the local church, through the annual conference, and to denominational agencies. Apportionments have variously been compared to taxes or franchise fees. Whatever they are, part of your pastor’s job is to raise these funds from the congregation.
The level of UMC apportionments differ from conference to conference. How they are assessed to the local church also varies. Some conferences use membership or attendance in the calculation and others assess a flat percentage of local church spending. On average, for every dollar given to the local church, three cents goes to the general denomination and seven cents goes to the annual conference. Another 5 cents is given by each congregation in response to special appeals. So around 15 cents of every dollar given to the local church is forwarded in some way to the denomination. The UMC’s current “general church” budget is $150 million per year, but actual giving has dropped to something like $115 million. Budget cuts are being recommended to the next General Conference.
Annual conference apportionments support the staff, facilities, and programs of the conference. They also include funds that pass through the annual conference to third parties. Each conference has different priorities so there is a good deal of local variation. Suffice it to say that local churches pay for programs whether they derive benefit from them or not. The biggest single category supports the district superintendents who comprise the heart of the clergy deployment system. To my knowledge, the UMC maintains the most expensive system for matching clergy with churches of any denomination (more about this below.)
The Global Methodist Church is hoping to cut apportionment payments in half in an effort to keep more money at the local level for ministry. It will not attempt to reproduce the current system of thirteen general agencies maintained by the UMC. General Conference has tried and failed multiple times to reform and right-size the agencies. (These are criticized as silos of power that do not connect well with one another or the mission of the UMC generally.) The GMC plans to place a single operations officer over whatever general programming it maintains in order to provide direct lines of accountability.
There is talk of a 5% cap on annual conference apportionments for the GMC. Savings will be realized by selecting presiding elders (district superintendents) from among pastors already serving in the district. District sizes will be smaller and there will be less clergy mobility due to the fact that appointments will be open-ended. Those UM annual conferences joining the GMC as a unit will be allowed a longer runway to adjust to the new way of doing things.
Clergy Employment Benefits
It will help laity to realize that the conference system originated as conferences of preachers. Laity did not get a vote until 1939. In those early days, being a Methodist preacher was all about sacrifice and any clergy benefits were raised through charitable appeals. Over time, things changed. Lay representatives accustomed to the business world are sometimes surprised to learn that a group comprised heavily of clergy makes decisions on clergy benefits. Don’t get me wrong: No one is getting rich being a United Methodist pastor. But the benefit package is probably not what a local congregations would develop on their own to support their pastor.
The annual conference serves as the plan sponsor for clergy pensions and health benefits. Most pension benefit packages in the secular world are based on the salary of the employee. In the UMC, pensions are linked to the Denominational Average Compensation (DAC). In the example of my annual conference*, a church served by a pastor at minimum full-time salary would pay an additional 61% for clergy benefits. And this is with the pastor paying their own social security withholdings. This is over twice the national average for benefits costs.
Of course, the percentages work out better for congregations with higher paid clergy (our plans are more generous toward lower paid clergy.) In some conferences the larger churches overtly underwrite smaller churches’ clergy expenses through apportionments. There are also “back door subsidies” like the fact that district superintendents dedicate a large portion of their time to smaller churches. Large churches generally pay for much more than they receive from the system.
Speaking of small congregations, long ago we started stringing churches together into multi-point pastoral charges. This was not so much a strategy to grow the congregations as as it was a to provide the conference-mandated minimum salary to a pastor. Decline has brought us near the end of this road. More recently, congregations have sought a less-than-full-time pastor that does not require health insurance or full pension payments. But the supply of such pastors is nowhere close to demand. This is why conferences are struggling to keep their promise of an appointed pastor for each congregation (no matter the size.) The conference I serve has intended to utilize more international clergy, but COVID-19 has frustrated these plans.
When you hear of an annual conference closing churches, there is a potential double benefit. First, the value of the local church property usually reverts to the conference. Second, the clergy supply deficit is alleviated, making it more likely that the conference can keep its promise to the remaining congregations. But starting down this road is like a dairy farmer developing a taste for beef instead of cheese.
A Dip in the Clergy Pool
Financial considerations aside, we cannot overstate the high impact of clergy leadership upon the health of the local church. This is by far the most important interaction a local congregation has with the denomination. The UMC is blessed with many gifted and capable pastors providing excellent leadership. But it is also true that we are in a leadership crisis as a denomination. The guarantee of employment and our reticence to exit ineffective clergy has led to a weakening of the clergy pool. An ideological divide between clergy and laity is often connected our liberal seminaries. In the conference I serve, more congregations request a traditionalist pastor than supply allows.
Add to the above dynamics a shortage of clergy generally. This means the UM system is less and less likely to deliver a pastor that meets a congregation’s needs for growth-oriented leadership. All the while, the price tag for the system of deployment goes up. One justification for our expensive UMC clergy deployment system is that a congregation generally does not experience an interim period between pastors. The clergy deck is reshuffled at the same time each year. But getting a pastor quickly is not as important to a congregation as getting an effective pastor. An interim period for a church to work out what it needs is sometimes valuable.
If a small congregation is fortunate to get an effective pastor, they are often at risk of shortly losing them to the needs of the larger system. And a pastoral transition is one of the most disruptive events in the life of any congregation. Many pastoral transitions are triggered by the needs of the denomination rather than factors within the local church. A retirement at the upper end of the system sets off a chain reaction of clergy reassignments.
The Global Methodist Church proposes to address these challenges with fundamental reforms. The local church will be given a larger voice in the appointment process. This shifts power back to the grass roots. Clergy will no longer be guaranteed an appointment. It will be easier to get into the ranks of the clergy and the free market will take care of most needed exits. Appointments will be open-ended rather than one year at a time. There will also be, I predict, more appointment matches made across annual conference lines. This increases the size of the pool from which local churches can draw. But the GMC will be born with the same leadership crisis being faced by the UMC. Developing and deploying effective leadership will continue to be a challenge for every denomination.
Many of the burdens of our denominational life center around clergy issues. The irony is that Methodism was born as a lay-driven movement. The Global Methodist Church intends to shift power to the local church in a fairly dramatic way. But business as usual is not really an option for either denomination emerging from separation. In the final installment of this series, we will look at the control mechanisms our denomination exercises over the local church.
*Here is how the math works in the conference with which I am most familiar: A church served by a local pastor making conference minimum salary of $41,560 would pay $5,700 into the Clergy Retirement Security Program based on a $72,548 DAC. They would additionally pay another $1,558.50 into a Comprehensive Protection Plan (death and disability) that is based on 3% of 125% of the salary (the extra 25% is an amount intended to reflect the value of parsonage housing). Another pension component, the UM Personal Investment Plan is a 1% match of 125% of the salary. In this example, that is $519.50. So a congregation has paid nearly 19% on pension benefits alone without social security payments (clergy pay their own). Rather than participate in the Wespath Healthfex insurance program, my conference mandates $17,500 be paid to each full-time, active clergy to purchase their own coverage. (Somewhat controversially, clergy couples get $35,000 to purchase the same family policy.) The actual benefit costs of having a full-time clergy in this example is $25,278… or 61% of salary. That is over twice the 30% national average for benefits.
Modest cuts in the annual conference budget do not much affect the burden on each local church due to decline. When the Illinois Great Rivers Conference cut their budget by 5%, the congregation I serve was assessed a 5% apportionment increase. A church growing or holding steady owns a bigger piece of the shrinking pie.