Stewardship and Finance Committee Annual Reports
Every spring, each Committee of the Yearly Meeting is requested to prepare a report of their activities over the prior 12 months. These reports are gathered and shared during Annual Session, and then are printed in the Yearbook for that year.
|2011 Report||2012 Report||2013 Report||2014 Report||2015 Report|
|2016 Report||2017 Report|
The Stewardship and Finance Committee had a very busy year. In addition to its normal and customary responsibility for developing the operating budget and the capital budget for BYM for 2018, the Committee was engaged in two institutional challenges. First, the Apportionment Subcommittee of the Committee continued its work on the review and analysis of the existing apportionment formula. Second, the Committee was very active in developing the revised capital budget to accommodate the cost increase of the Catoctin Bathhouse that was presented at Tenth Month Interim Meeting.
The Apportionment Subcommittee began its work with a survey of Monthly Meetings regarding the types (rental vs. ownership) and costs for their meeting space; responsibility for multiple meeting houses and burial grounds; rental income and associated costs; and investments and investment income. The results led the Subcommittee to recommend that further study be given to including rental income, and that the new apportionment formula not have variables added relative to any of these issues. The Subcommittee felt that those few cases where any of these issues causes a Monthly Meeting difficulty in paying its operating expenses and its apportionment were best dealt with as exceptional situations.
The proposed formula developed by the Subcommittee retains the ability to pay aspects of the current version, but drops two factors which have had impacts which were different than what was intended. These are the 25% cap on apportionment increases and the differential weight given to contributions over and under $100. The proposal can be summarized by the following formula:
Monthly Meeting A’s Income Total Meeting A’s
Income of all Monthly Meetings X Apportionment = Apportionment
This results in each Monthly Meeting being asked to pay the same proportion of its income as all other Meetings. The exception will be Meetings which have a demonstrated financial hardship. The Subcommittee prepared guidelines for approving reductions to apportionment which are pending Stewardship and Finance Committee approval at the time of this report.
The proposed formula received is first reading at June Interim Meeting and was approved for forwarding to Annual Session for final review and approval.
In addition to work on the formula, the Subcommittee prepared new guidelines on what income is subject to apportionment and what is exempt from it. These do not represent a policy change, but are intended to be easier to understand and to result in greater consistency in how Monthly Meetings report income.
The BYM Operating Budget for 2017 and the BYM Capital Budget for 2017 were constructed by the Budget Subcommittee based upon information and advice from various other BYM Committees as well as the BYM Comptroller. The full Committee approved both Budgets at its Committee meeting at Annual Session in August 2016. The Co-Clerks of the Committee presented both the BYM Operating Budget for 2017 and the BYM Capital Budget for 2017 at Annual Session and both Budgets were approved as presented.
A few weeks thereafter, three construction bids were obtained for the proposed new bathhouse at the Catoctin Quaker Camp. The variance between each of these bids with the total amount budgeted for the project gave rise to an intensive and wide-ranging discernment process within BYM as to the way forward. The Committee was integrally and actively involved in this discernment process and, among other things, worked with the General Secretary in developing a revised construction budget for the project as well as revised Capital Budgets for 2016 and 2017, both of which were approved at Tenth Month Interim Meeting. The Committee also worked with Trustees to develop a template for the 10 Friendly Loans that were originated to finance, in part, the construction costs for the Catoctin Bathhouse. The Catoctin Bathhouse construction project was completed in time for the opening of the 2017 camping season and was also completed at a lower total cost than what was contemplated in the revised construction budget.
Prompted by the experience with the Catoctin Bathhouse project, the Committee revised its procedures with respect to the consideration and approval of capital projects at its meeting at Third Month Interim Meeting. In short, the Committee has requested the Camp Property Management Committee to develop a priority list of contemplated capital projects within BYM based exclusively on the physical condition of the asset. The Camping Program Committee will then review the list of assets and have the authority to re-prioritize a specific capital project based upon the needs of the camping program. The final list of capital projects will then be submitted to the Stewardship and Finance Committee for its consideration in the formulation of the following year’s Capital Budget. For major construction projects, such as a project on the scale of the Catoctin Bathhouse, at least three competitive bids must be obtained by May 1 so that the discernment process can include all relevant Committees, including Stewardship and Finance, Camp Property Management, Camping Program, and Development, as well as within BYM at large, including Sixth Month Interim Meeting and Annual Session. If the discernment process moves towards approval for any such major construction project, the objective should be to have construction activity commence as soon as possible after the end of the camping season.
As of this writing, the Budget Subcommittee is working on the development of the 2018 Capital Budget and the 2018 Operating Budget, both of which will be presented to Annual Session in August 2017.
The Stewardship and Finance Committee held one committee meeting at Annual Session, as well as an interest group session to answer questions on the operating and capital budgets. In addition, the Committee had a joint meeting with Trustees. The Committee also met at October, March, and June Interim Meetings. In addition, the budget subcommittee met by telephone conference call several times. As was the case last year, our major activities were the development of an operating and a capital budget for approval by the Yearly Meeting, plus even more work on apportionment.
In an effort to build stronger connections between Monthly Meetings and the Yearly Meeting, each member of the Committee was assigned three or four Monthly Meetings for which he or she will act as liaison from the Stewardship and Finance Committee. We believe this will help the Committee develop a better understanding of the financial situation in each of our Monthly Meetings, as well as provide easier access to information for the Monthly Meetings. However, we expect that it will take time for this to become a routine process and fully effective.
The Committee continued to monitor the progress of fund raising and preparation for the demolition of the Catoctin bath houses and the construction of new and more environmentally friendly structure. The capital budget also includes funds for other improvements at Catoctin, and for improvements at Shiloh and Opequon as well.
In recent years we have heard from an increasing number of Monthly Meetings that their apportionment has become a burden to them, and the number and intensity of those complaints increased again this year. At March Interim Meeting, the Committee responded by recommending that the total amount of the 2017 apportionment remain the same as the 2016 level ($462,200.) The recommended operating budget for 2017 also includes an increased amount for unpaid apportionments. The recommended operating and capital budgets for 2017 will be presented for approval at the Yearly Meeting at Annual Session.
The Stewardship and Finance Committee concluded that it is time to take a closer look at the apportionment formula, and appointed a subcommittee to carry out that activity. The process began with careful listening at the two apportionment meetings (this year held at Carlisle, Pennsylvania and Midlothian, Virginia) and the compilation of a list of questions and concerns. Analysis on these began in June and will continue through early spring 2017, with formal reports to the full committee and to Interim Meeting as the process moves forward. We intend to have a proposal for approval by the full Stewardship and Finance Committee ready for June Interim Meeting, and for the Yearly Meeting at Annual Session in 2017.
In an effort to both make the process as transparent as possible and to gather as much feedback as possible, we have had major documents used in the analysis posted to the Stewardship and Finance page of the Baltimore Yearly Meeting website, and will continue to add more as the work evolves. We hope that Monthly Meetings will follow along and stay in touch, so that what we present as our recommendation in 2017 is a surprise to no one, and can be supported by all.
Stewardship and Finance Committee met three times at Interim Meeting, three times at Annual Session and two times by telephone conference call in the last year. In addition to developing and presenting for approval an operating and a capital budget for the Yearly Meeting, our main focus this year was working with various Monthly Meetings around the topic of apportionment.
In recent years we have heard from an increasing number of Monthly Meetings that their apportionment has become a burden to them. While the Apportionment Formula is the same for every Monthly Meeting, some have questioned the fairness of the Apportionment Formula as it is applied to the unique or particular circumstances of an individual Monthly Meeting. Since the Stewardship and Finance Committee and the Yearly Meeting have labored with this subject in very recent years, we did not feel the time was right to examine our method of apportionment yet again. Instead we have endeavored to reach out to Monthly Meetings via direct communication and to host two Apportionment Meetings, one at Blacksburg for the Virginia Meetings and one in Frederick for the Pennsylvania and central Meetings. Both were fairly well attended and Meeting representatives shared information about how they generate ancillary income, such as renting their facilities for use by outside groups. Even though we have improved and increased the amount of information that is sent with Apportionment Questionnaire, there are always Friends who need some clarification of the apportionment process. These Apportionment Meetings give us a chance to answer questions face to face and we are grateful for the opportunity.
The nature of our budget and approval process dictates that current year apportionments are based on a Meeting's financial circumstances two years prior. Realizing that sometimes those financial circumstances change significantly, Stewardship and Finance has included a line item in our proposed operating budget, for the fourth year now, labeled "Allowance for Unpaid Apportionment". By including this reduction of expected income in our budget, the Yearly Meeting can absorb some of the shortfall that appears to be inherent in our process. Some have asked why we don't simply lower the apportionment amount for these Monthly Meetings, but the committee members who have worked closely with the formula and the spreadsheet used to calculate individual apportionments have learned just how interconnected we all are in the Yearly Meeting. Even the slightest change in the figures for one Monthly Meeting can have significant impact on another. Rather than changing everyone's calculated amount we have felt it more practical to budget for some possible shortfalls on apportionment payments. These shortfalls have averaged 2.3% of the total apportionment income over the last five years.
In addition to the budgets and our work with Monthly Meetings and apportionment, the committee has also approved increasing the amount for checks written on our primary account requiring two signatures from $2,000 to $5,000. We were happy to receive statistical information compiled by our Treasurer, Tom Hill, which made our decision to do this much easier. Along with this we approved adding the requirement of approval from the Treasurer, the Assistant Treasurer, or the Clerk of Trustees for any transfer between our various accounts that exceeds $5,000.
Finally, the Committee started to discuss its role in intervisitation with Monthly Meetings throughout Baltimore Yearly Meeting. We see the need to reach out to individual Monthly Meetings on an ongoing basis so that we can listen and learn from the Members and Attenders of each Meeting. We also stand ready to work with each Meeting to find ways to strengthen and enhance the Meeting itself.
No report received.
The main task of BYM’s Stewardship and Finance Committee is to develop the Yearly Meeting budget and present it for approval at Annual Session. Our committee meets at every Interim Meeting and several times at Annual Session. In addition, we hold conference calls as needed at other times. We work with BYM staff, Supervisory Committee, Trustees and the Development Committee to create a first draft of the budget. Other committees and programs submit budget requests which are gathered during the early part of the year for the following year’s budget. We also consider how much revenue the budget should include from apportionment payments from Monthly Meetings.
A proposal to change the way apportionment amounts are computed for individual Monthly Meetings was presented in 2011. Individual meetings were asked to provide feedback. After gathering this information, the issue was brought back to Interim Meeting in 2012 and the Yearly Meeting approved retaining the current formula for computing apportionment amounts. So during our spring budget process, after we have set the apportionment amount and recomputed individual meeting amounts based on their submitted information, we hold an Apportionment Meeting to give Monthly Meetings the opportunity to comment on their proposed apportionment for the following year. This year, Charlottesville Meeting hosted the Apportionment Meeting in April. At that meeting we also heard presentations by David Hunter and Riley Robinson on green initiatives and energy saving steps at the camps and the Yearly Meeting office.
In developing the 2014 budget we paid particular attention to several items. After keeping the total apportionment amount level for the last two years, we decided to increase it for 2014 by approximately 3%. We also continue to include in the budget an allowance for unpaid apportionments. We increased this amount for 2014 based on our experience with meetings who cannot pay their full apportionment amount. We continue to budget for an amount to be added to our unrestricted reserves based on our discussions from several years ago. The committee hopes that this will continue so that the unrestricted reserves balance will continue to grow.
Another item which we considered further was the amount to set aside in the budget for staff sabbaticals. If a staff member goes on sabbatical, his or her normal salary is paid which is covered in the budget. However we also budget for extra expenses which may be incurred in order to cover that staff member’s responsibilities. In addition the committee feels it is important to continue to budget for a contingent contribution to FUM. This item was included in the 2013 budget with the Yearly Meeting approving $2,600 for Ann Riggs’ ministry.
We continue to consider the best way to allocate our contributions to the big three Quaker organizations; Friends United Meeting, Friends General Conference and Friends World Committee for Consultation. We have been able to increase somewhat the total amount budgeted for these three organizations over the last several years but the total remains below the level of ten years ago. Our study of how best to allocate among the three is ongoing and we hope to have a recommendation by 2013 Annual Session.
In addition to the operating budget for the Yearly Meeting, Stewardship and Finance is working to develop a capital budget. The capital budget would show additional information not included in our normal operating budget. This information would include planned expenditures for capital improvements to the camp properties and the office building in Sandy Spring. A capital budget would also show projected receipts from restricted contributions, special fund raising projects (like the Shiloh Pond) and amounts released from restricted funds to pay for capital projects. We plan to submit a capital budget at the 2013 Annual Session.
The committee feels that the annual apportionment questionnaire may be in need of revision. Although the basic information asked (total number of contributing households, number of households making small contributions, household contributed dollars and investment income) would remain, we have found that meetings tend to interpret sources of income and what constitutes restricted income differently. The form may have to be expanded to provide more clarification and examples. Several members of the committee are working on this and we hope to have a revised form available by 2014.
We are continuing to work on a format for financial statement reporting for Interim Meetings. We need to report useful and accurate information without overwhelming the membership. Our new accounting software is much more flexible in producing various reports.
Next year’s committee should continue working on the reporting format, refining our capital budget presentation and revising the apportionment questionnaire.
Although the work of the committee sometimes seems daunting, we are continually supported by our amazing staff. Many thanks to Margo Lehman for her thorough and caring work and also to Riley Robinson who continues to move us forward with love and compassion.
Jim Riley, Clerk
The Stewardship and Finance Committee spent most of its time developing the proposed FY 2013 budget. We worked with the supervisory committee in regards to personnel issues including annual wage increases for staff, budgeting for sabbaticals, changing the Comptroller’s position from part-time to full-time, and addressing the need for additional part-time staff in the office. Our first draft of the budget reflected a deficit of approximately $17,000. Included in the initial budget was an estimate that the Development Committee provided for unrestricted contributions, an estimate for personnel insurance costs, and other items that needed to be estimated because actual requests were not provided. Based on this information (April, 2012), we recommended that total apportionment income be increased by 3%.
The Development Committee spent considerable time studying the history of giving since the development program was established, and recalculated their proposed estimates. With this change and lower insurance costs for employee benefits, the revised 2013 budget had an excess of income over expenses. The committee then reconsidered the apportionment increase and decided to reduce the total back to the 2012 amount. Letters then went out to all meetings informing them of their 2013 apportionment amount.
Other work of the committee related to the issue of increasing the unrestricted reserves of BYM. A sub-committee composed of members of the Trustees and Stewardship and Finance was established and met at Annual Session in 2011. A follow up meeting was held by phone in February, 2012. After much discussion, the committee recommended that we plan to increase the unrestricted fund balance to an amount equal to twenty-five percent of the total expenses in the 2012 budget. This amount is $389,895. The unrestricted fund balance based on an unaudited report of December 31, 2011 is $271,251. The committee suggested that we plan to reach this goal in a ten year period if possible.
At Annual Session in 2011, the Stewardship and Finance Committee recommended a change in the way apportionments are computed. The suggested new method would be a move away from the current formula method and be based more on voluntary increases or decreases from year to year by the Monthly Meetings themselves. After discussion at Annual Session, the matter was referred to the individual Monthly Meetings for more feedback. An information packet was sent to Monthly Meetings in October, 2011. The Yearly Meeting office has been collecting comments and they will be reported back at the next Annual Session.
The annual meeting to discuss Monthly Meeting apportionments was held at the Valley Friends Meeting at Dayton, Virginia on April 21, 2012. In addition to discussion regarding apportionments, there was discussion on the proposal regarding the possibility of changing the method of setting apportionment amounts. There were also presentations made on three programs that are offered for adults by Baltimore Yearly Meeting: Spiritual Formation, Women’s Retreat, and Intervisitation.
The Camp Finances study is at a stage that all reports have been returned to Stewardship and Finance. The next step will be for Stewardship and Finance Committee to work on a proposal to come before a Meeting for Business.
Letty Collins (Roanoke) and Jim Riley (Hopewell Centre) Co-Clerks
DEVELOPING THE FY 2012 BUDGET: The committee has worked diligently on this budget for some time. We met with the full committee at interim meetings, and a sub-committee had several conference calls in between the meetings. This current year has been a painful year, as Baltimore Yearly Meeting has not had an adequate financial response from its members in unrestricted contributions. Our first draft of the budget, after including all requests from committees, reflected a shortfall of more than $70,000.
During our meetings, we took into consideration the March 19, 2011 open meeting that was held in Frederick that asked us to consider how we support our memberships with Friends General Conference, Friends World Committee for Consultation, and Friends United Meeting. The sense of that meeting seemed to be that BYM places equal importance to each of these three memberships. We decided that whatever amount we could contribute to these three organizations would be equally divided. Also, last year we found that when we did not fund any of the extended services, that the Yearly Meeting responded that we needed to show some support to reflect BYM recognition of each of the organizations. We also looked at what each committee expended their prior funds for, and made some decisions based on prior experiences. We also contacted each committee clerk, to ask that the committee review their budget request, and reduce their budget request, if possible.
The annual meeting to discuss Monthly Meeting apportionments, open to all, was also held at the very hospitable Frederick Meeting on April 16. Those present shared about how their Monthly Meetings handle finances.
Our next step was to go about reducing the budget from that originally proposed, so that we could come to Annual Session with a proposed balanced budget. Each and every item was looked at. Staff positions were reviewed as well as staff benefits.
Working with staff and the Supervisory Committee, some very painful decisions were made.
- One part-time office position was eliminated, and will actually cease next month. This person has helped with student loans, and also went through decades of old financial records. Those that needed to be kept were put in order and filed so that important documentation could be easily found,
- The decision was made to place the staff on a furloughed leave. This means that staff will not receive a salary for a three-day period. The Stewardship and Finance committee feels that if there is any unexpected funding or expense reduction that this will be the first item restored,
- A substantially less expensive health insurance plan for staff was found,
- Young Friends and the Camping Program also came back with some reductions,
- Our largest reduction was made to Contributions to Outside Organization. Last year the total budget for these organizations was $44,700.00. We needed to reduce this by $32,700. We divided the $12,000 balance and divided it equally between the three organizations. Religious education requested that we reduce their budget by $500,
- The Intervisitation program did come back with a reduced budget, but there was still no way this work could be funded even at their reduced request. The original request of $9,200 was reduced to $2,000,
- We reduced other committees either by 10% or based on the history of expenditures, we reduced some committees to a greater extent.
BYM APPORTIONMENT PROCESS: We also have had an ad hoc committee working for the last three years to try and simplify the apportionment formula for Monthly Meeting contributions to the Yearly Meeting. The committee has come up with a proposal. A Meeting will take place at Annual Session to discuss this further.
CAMP FINANCES: The Stewardship and Finance Committee has initiated is a study of the way the camps are financed. We asked that a working group be comprised of a person from the Trustees, Stewardship and Finance Committee, Camping Programs Committee, Camp Property Committee, and the Development Committee. It met several times and has come up with a proposal that has gone back to each of the named committees for their comments. It will then be sent to the Stewardship and Finance Committee to work on a proposal to come to Meeting for Business.
BYM PROPERTIES AND THEIR CARE: We support Tom Hill, a member of the Stewardship and Finance Committee, in his research into where Quaker cemeteries are located and how they are being maintained.
Last but not least, we wish to thank all Meetings for their support of the Baltimore Yearly Meeting, and all individual donors who have been so generous.
Letty Collins, (Roanoke), Clerk