March 13, 2003
Winnipeg, Man.— Mennonite Church Canada’s
2003-04 budget total of $7.5 million projected gross ($6.2 million net)
will be cut by $2 million to balance the budget this year.
The net budget reflects congregations’ investment in ministries.
The gross budget reflects revenue from all sources of funding.
Mennonite Church Canada received $4 million in donations last year –
off from projections of $5 million. Significantly lower than forecasted
expenses plus draws on reserve funds were reported to General Board in
a February 5 meeting, reducing the un-audited deficit to just over $600,000
for 2002-03.
Boards and Councils addressed this year’s outlook, last year’s
shortfall, and their combined effect on ministries during the annual MC
Canada Leadership Assembly in Winnipeg on March 5-8. Phil Bontrager, interim
CEO of Mennonite Publishing Network (MPN – formerly Mennonite Publishing
House), provided counsel from his experience of rebuilding MPN and other
businesses.
The General Board and Councils passed recommendations from the Financial
Policy and Audit committee. Key actions being taken by boards and councils
include:
- Eliminate the 2002-03 deficit by further transfers from reserves.
- Create a 2003-04 budget projecting donation income equivalent to
2002-03 actual donation income plus additional other income such as
sales, grants, and partnership subsidies ($5.5 million).
- Create a special opportunity to encourage donations from individuals
and congregations wanting to help the financial situation.
- Eliminate cost of living salary allowances for all staff in 2003-04.
In discussion, a few voices encouraged leaders to build a step of faith
into the conservative budget recommendation. Others urged that the financial
health of MC Canada must be a strong priority at these early stages in
the life of a still relatively new national church. The recommendations
passed unanimously once dialogue concluded.
Representatives from partners, such as Canadian Mennonite University
(CMU) and Canadian Mennonite, were also invited to make a presentation
at the meetings in recognition of the impact budget reductions would have
on grants to them. CMU faces a total grant reduction of $231,000 while
Canadian Mennonite’s funding will be re-negotiated in April. Other
partners have also been or will be consulted.
What went wrong?
Executive leaders admit there were errors of omission and commission
from the General Board on down, and said the budget crisis resulted from
a convergence of several factors:
-
Not enough money and staff time were applied to planning the financial
aspects of the transition from a bi-national church to a national
church.
-
There were several unanticipated staff changes in the finance department
that reduced knowledge of previous financial patterns.
-
Projections for future years’ budgets for the new national
church were being made simultaneously with the implementation of new
accounting software and a complete restructuring of the denomination’s
chart of accounts and financial reporting systems.
-
There was a lack of financial history to rely on when forecasting
the revenue that could be expected for newly merged programs. Planners
had to rely on best estimates when predicting how income would transfer
from former programs of General Conference Mennonite Church (COM,
COE, CHM, etc.) and Mennonite Church (MBM, MBCM, etc.) to the new
structures of MC Canada.
-
Donations in January (from both individuals and congregations) did
not follow patterns from previous years. (MC Canada typically receives
25% of donation income just prior to fiscal year-end on January 31).
Possible contributing factors suggest:
- increases in designated giving (beyond MC Canada)
- economic conditions relating to drought in Western Canada
- broad acceptance of the missional vision may have channeled some
funds to local congregation initiatives
- contributions to charitable organizations are generally trending
downward.
These factors all combined to result in inaccurate revenue forecasting.
“We have less money than we thought we did for doing what we hoped
to do. Now we know different,” said MC Canada moderator Henry Krause,
adding that “we now have a full year of experience operating as
Mennonite Church Canada.”
What are the implications?
Realigning the budget to match last year’s revenues means Mennonite
Church Canada’s programs are drastically reduced. Although some
reductions were achieved by foregoing projected increases in staff and
program costs, the extent of reductions required resulted in 21 staff
released and several reassignments for a total reduction of 18.75 full-time
equivalent positions. Most of the changes will take effect on April 10.
While Resource Centre, Christian Education and Nurture, Multi-cultural
Ministries, regional Mission Partnership Facilitators (area conference
based) and the Mennonite Heritage Centre continue with modest changes,
other programs face major cuts and elimination.
Christian Service Ministries (Mennonite Voluntary Service Canada, Service
Adventure, and other short term service ministries) is eliminated entirely;
Congregational Partnerships staff is reduced.
Worship and Spirituality, Congregational Leadership Development, Peace
and Justice, and Outreach and Church Planting, all full or part-time staff
positions with related program budgets, are eliminated.
Remaining Native Ministries staff will focus on leadership development
and constituency education.
The MHC Art Gallery and Der Bote, MC Canada’s German language newspaper,
are completely self-sustaining and are therefore unaffected.
International ministries, though less hard hit, will see a reduction
of five couples in international work as planned in January: the terms
of three couples will not be renewed, one new application was terminated
in process, and one couple will move to a self-supporting classification.
Administrative costs have also been reduced; additional program reductions
may yet be made.
Reductions in Human Resources, Communications, Resource Development and
overhead costs such as office rent and telecommunications complete the
round of cuts.
MC Canada moderator Henry Krause said executive staff positions will
be reviewed at a General Board meeting scheduled for April 24-26. Meanwhile,
staff will be added to the finance department to provide adequate support
until stability in finance staff and in the accounting system is achieved.
Leadership acknowledged, in hindsight, that mistakes were made along
the way. While these cuts are now needed to help create a budget that
reflects income, the door has not been completely closed for future reconfiguration
of these ministries, should funding become available in coming years.
The cuts were painful. In a meeting announcing reductions, staff first
and foremost expressed concern for the recipients of ministries that will
end, particularly in native communities and with youth/young adult voluntary
service opportunities. Anger and bitterness also surfaced.
Krause acknowledged the hurt, and spoke of the agony that board and council
members experienced in making the cuts. He said that Councils and the
General Board approached the task from the perspective of maintaining
those ministries that would be most difficult for area conferences or
individual congregations to deliver.
What we learned by asking
Leaders were gratified by the nearly 350 responses to a short-notice
survey that went out in late February, asking members and congregational
leaders for input into the program cuts. Krause said the responses were
included in the discernment process General Board used to make decisions
during Leadership Assembly. “The ideas that surfaced were also identified
by people in the General Board and Councils,” said Krause.
Trends in the responses included:
- Support, encouragement and offers of prayer during this difficult
time, and trust in the judgment of the board;
- Lack of confidence in leadership, specifically around financial decision
making and the need for more skills in working with the budget;
- Concerns about the survey itself; unclear questions and lack of time
to respond;
- Lack of clear understanding about MC Canada programs and ministries;
- Encouragement to focus on work that only the national church can
do;
- Encouragement for a renewed focus on fundraising/stewardship, including
setting aside one day in 2003 for churches to make special donations;
- Increase communication between MC Canada and congregations by connecting
with frontline people in congregations, use Canadian Mennonite more,
and increase visits to congregations.
Where to from here?
Board and council members and executive staff emphasized that a sustainable
future is at the heart of the excruciating process of making these decisions.
A special invitation is immediately extended to anyone wishing to help
support the financial situation. The $2 million in cuts would amount to
about $57 per person when spread over MC Canada’s 35,000 members.
Notes and letters of both criticism and encouragement have been received
from concerned members, some with donations. Correspondents expressed
loss of hope, others dismay, while some are prepared to move ahead.
In a written statement that accompanied face-to-face announcements of
cuts to staff, leadership offered encouragement for the times ahead. “The
vision [Healing and Hope] that has energized us and many across the church
has not been diminished. It will continue to guide us in our reduced and
re-shaped ministries.”
Signs of hope included a Mennonite Church Alberta vote to give $5,000
to MC Canada (delegate sessions Feb 28 – March 1). A Saskatchewan
farmer wrote to say he would respond with a $1,000 cheque to take up the
challenge of Walter Quiring (see letter to editor, Feb. 10, 2003, Canadian
Mennonite). An Ontario congregation pledged $2,500 in additional support
and committed itself to further congregational fundraising for MC Canada.
And a southern Manitoba congregation pledged $10 in additional giving
from each member, with a goal to broaden the drive into its cluster and
then across Manitoba.
Leaders said gift support is welcome, and add that prayer support is
critical in these financially challenging times. More information will
be released as it becomes available.
Reductions in Ministry, Program and Staff
Some positions are shared; some individuals performed two functions.
Formation:
- Director of Worship and Spirituality/Director Congregational Partnership
(Witness position)—Marilyn Houser Hamm
- Director, Christian Education and Nurture, Elsie Rempel (reduced by
0.2 FTE (Full Time Equivalent))
- Director of Congregational Leadership Development—Maurice Martin
- Director of Peace and Justice—currently vacant
- Director of Youth Ministries—Anne Campion reduced to 0.25 FTE
(youth assembly planning will continue by contract)
Witness:
Christian Service Ministries:
- Director of Christian Service Ministries—Shirley Redekop
- Director of Mennonite Voluntary Service and Service Adventure—Brad
Reimer
- Short Term Voluntary Service Program Coordinator—Raul Bogoya
- Administrative Assistant, Christian Service Ministries —Monika
Selluski
Native Ministries:
- Director, Walter Franz (reduced by 0.5 FTE)
- Pastoral Team, Manigotagan—Vic and Norma Funk
- Pastoral Team, Riverton—Neill and Edith von Gunten
- Itinerant Ministries Staff—John and Pat Pankratz
- Chaplain—Willie Guenther
Congregational Partnerships:
- BC Mission Partnership Facilitator—Gerd Bartel (reduced by 0.5
FTE but remains Western Director of Resource Development)
- Constituency Connections Coordinator—Steve Plenert
- MB Mission Partnership Facilitator—Norm Voth
- Administrative Assistant—Vicki Friesen
Outreach and Church Planting:
- Director—Jean Jacques Goulet
International Ministries:
- Asia and the Middle East Field Administrator—Sheldon Sawatzky
- Administrative Assistant—Flora Umurisa
Support Services:
- Receptionist—Debbie Loewen
- Human Resources Coordinator—Adam Robinson
- News Writer—Daniel Rempel (reduced by 0.2 FTE, retains webmaster
position)
- Director, Human Resources—Kirsten Schroeder (reduced by 0.2
FTE)
Executive staff positions will be reviewed at a General Board meeting
scheduled for April 24-26.
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