On April 14, 2020, during its regular spring conference call, the Missouri Conference Finance and Administrative Council (CFA) voted to provide apportionment relief to local churches. CFA, the Conference Treasurer, Rev. Nate Berneking, Bishop Farr, and the entire Conference leadership team are well-aware of the struggles during the time of social distancing and inability to meet for regular worship. Worse, we are also aware that at least some of our churches have members who have contracted COVID-19. Our prayers continue for all those affected by the pandemic.
While only the session of Annual Conference is authorized to adopt and change the budget, CFA adopted a resolution that sets 75% of each church’s current apportioned amount as meeting the Conference’s requirements for receiving a “Paid in Full Certificate.” CFA also requests that Bishop Farr and the Cabinet treat any church meeting the threshold of 75% as paying in full. Bishop and Cabinet have already indicated their agreement and willingness.
Understand what this means. CFA set 75% recognizing that many churches divide their total apportioned amount into twelve equal installments. The relief provided equals three of those equal monthly installments. However, the statement that churches receive each month will not change because only the session has authority to change the budget. And, as always, while we appreciate regular installments (even if reduced by 25%) to ease cash flow, we also do not hold churches accountable for payment until the end of the year.
Are there potential consequences that
may not be obvious?
We have tried to think through all possibilities associated with giving this relief. But we have never actually provided for such a situation. For example, for the 2022 Apportioned Budget, CFA will likely need to rethink its strategy for “stabilizing” fixed costs. Currently, the Conference has always utilized the percentage shortfall in the previous year’s apportionment payments to increase the apportionment ask for fixed costs the following year. That ensures enough revenue and avoids problems with cash flow. CFA recognizes that the same factor, because it will be inflated, will make less sense for next year’s budgeting process. Fortunately, CFA has the authority to determine how it stabilizes the budget in the current CFA Policies & Procedures. It will act as necessary.
Will this damage the Conference’s finances?
The Conference currently has a general reserve (approximately $1.5 million) and fund balances that allow it to offer this relief. Though it will weaken the Conference’s strong financial position, CFA has also utilized an SBA Paycheck Protection Program loan to deal with the expected reduction in apportionment revenue. We will certainly need to ensure that we build back our reserves when this crisis ends, but for now, and assuming apportionment revenue restarts this summer, we anticipate a continued ability to operate our normal ministries.
What if we’ve already paid more than 75% of our apportionments?
We recognize that many churches have already paid 100%. Several have been in a long-time habit of simply sending the entire amount in January, February or March. To those churches, we offer our highest gratitude and will work to ensure that any church paying 100% gets the recognition they deserve. In fact, CFA asks that if churches are not adversely affected financially, or if churches bounce back strongly once in-person worship resumes, they work to pay 100% as usual. Any church meeting thresholds higher than 75% will be celebrated accordingly.
Finally, what about district apportionments?
CFA’s vote only relates to Conference apportionments. Each district will need to decide what action it can take and whether relief can be extended to the district level.
Rev. Nate Berneking, Director of Finance and Administrative Ministries
Rev. Sherri Swanson, Council on Finance and Administration chairperson