wfn.org | Economist says recession over, church giving to increase

["NewsDesk" <NewsDesk@UMCOM.ORG>]

June 19, 2003	     News media contact: Joretta Purdue7(202)
546-87227Washington	10-21-71B{325}
 
By Joretta Purdue*

WASHINGTON (UMNS) - Don House has good news for the United Methodist Church.
An economist, not an evangelist, he believes the economy is improving. 

Everyone knows there is a connection between the state of the economy and the
dollars - or lack of them - in Sunday's collection plate. Few people, with
the exception of professional fund-raisers - are as aware of that connection
as House, a United Methodist and economic consultant from Bryan, Texas.

House is on his way to becoming the denomination's economist, if he hasn't
already arrived. Now a voting member of the church's financial administrative
agency, House was a member of the United Methodist Funding Patterns Task
Force (2001-04), which was charged with looking at how the denomination funds
churchwide ministries. 

The task force's study led the General Council on Finance and Administration
to recommend, and the General Conference to adopt, a new formula for figuring
the apportionments asked of each annual conference and, through them, of each
local church.

House sensed the need for apportionments to be more in tune with the
financial reality of the local churches and annual conferences, so he
suggested incorporating into the formula a factor that reflects the economic
health of the local church. The formula that is being phased in during this
four-year period, or quadrennium, uses local church spending figures to
achieve this.

As a member of GCFA's General Funds Coordinating Committee, House is
participating in discussions that will lead to the 2005-08 budget proposal
that the finance agency will present to the church's highest legislative
assembly next year. He recently told other members of the council he believes
the U.S. economy is no longer in recession.

"The numbers show we are out of the recession and in a period of growth, but
church records don't yet show that, and they shouldn't," House said at the
committee's May meeting.

Asked to explain what he meant, House told United Methodist News Service, "We
have now experienced five consecutive quarters of sustained economic growth.
This is strong evidence that we have 'bottomed out' and that we are well on
the road to economic recovery."

The "sustained economic growth" House refers to is based on figures produced
by the U.S. Department of Commerce that show inflation-adjusted increases in
domestic productivity. A recession, on the other hand, is a period when the
gross domestic product figure decreases, showing that output has fallen.

"Our apportionment payments are suffering from the impact of the recent
recession that began in early 2001," he added. "The general press has not yet
reported an end to the recession. However, the facts speak for themselves."

He expects giving to increase and payment of apportionments to grow as church
members become aware that economic growth has returned, he said.
Apportionment income at the end of May was down 7 percent - more than $2
million - from last year's comparable figure, to the consternation of church
officials. Giving to the World Service Fund, which supports most of the
churchwide ministries - from creating curriculum to mission outreach and
international advocacy - was down 7.7 percent.

"Improvements should be evident as early as the end of the summer," he
predicted. 

Knowing that apportionments to the annual conferences are now "governed by
the actual financial experiences of the local churches" is comforting to
those engaged in developing the 2005-08 budget for churchwide ministry, House
said. 

"Apportionments for the 2005-2008 quadrennium are not 'set' at the 2004
General Conference as in years past," he noted. "Apportionments are now based
upon percentages to be applied to local church expenditures. Only the
percentages are set at General Conference - not the amount of the
apportionments."

No one can predict with certainty what the economy is going to do, House
remarked. However, the new formula offers what he called a self-correcting
feature.

"If the economy falls back into recession, apportionments will adjust
downward. If the economy continues to grow unexpectedly through 2005,
apportionments will adjust upward," he said. "Today, much of the pressure of
knowing exactly how the local churches will fare financially throughout the
quadrennium is gone." 

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United Methodist News Service
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