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Women’s Division addresses overspending issues

Jan Love

Actions taken during the division’s March 31-April 3 spring meeting will mean a reduction in both staff and programs. The division is the administrative arm of United Methodist Women.

Currently, the division, based in New York, has about 100 paid staff. Specific cuts are yet to be determined.

Upon recommendation of the division’s executive committee for appropriation, directors agreed that the 2007 budget would be fully integrated, “displaying all sources of income and all spending in one comprehensive document.”

The budget for 2007 and beyond will be balanced and income based on three-year rolling averages of all sources of income, unless a certain source of income shows a recent significant decrease. A spending reduction of about $5.5 million from 2006 is expected.

Jan Love, the division’s chief executive, told United Methodist News Service that in the past, even though directors had “voted on every penny” of the money that was spent, about one fourth to one third of the money was not shown as part of the general budget. That made it difficult to assess overall spending, she explained.

An integrated budget will allow the total income and total expenditures of the division to be “managed comprehensively,” according to Love.

“This is overdue and now it is mandatory to keep us in financial good health,” she said.

Love told directors that the division was chronically overspending about $4 million a year. “Our passion for mission has outstripped our income,” she said.

The “sobering reality,” she pointed out, is that the number of programs and number of staff will get smaller. “Where are the priorities that cannot be sacrificed for the work of United Methodist Women?” she asked.

It was agreed that staff would be reduced and realigned, beginning this year, in order to accomplish the budget reductions for 2007. Directors will receive a plan at the annual meeting in October “for reducing and reorganizing the division’s work to reflect lower levels of material and human resources.”

Women's Division

Most functions of communications, current and deferred giving and development currently being handled by the larger Board of Global Ministries staff will be moved to the division, part of the plan to be presented in October. That will mean a further realignment of division staff, the creation of some new positions and possibly the hiring of new staff. It also will effect several departments within the board, Love explained.

She said it is expected that the division’s Service Center, which produces and distributes materials for United Methodist Women, would “break even” financially in 2007. The center ? which is based in Cincinnati and has about 30 employees ? often has been subsidized by the Women’s Division, she added. The subsidy in 2005, for example, was more than $800,000.

”We’re undertaking a very careful evaluation of how to do work better and cheaper out of the Service Center,” she told directors.

Another cost savings will be realized by paying the salaries of some staff at the Church Center for the United Nations out of that building’s budget rather than the Women’s Division budget. The building, owned by the Women’s Division, earns its income from rental tenants.

The May 4-7 Women’s Assembly will cost the division $2 million after registration fees are counted and directors agreed that expense should be covered by the already-authorized sale of property in San Antonio and unexpected income from 2004 and 2005.

Directors also will receive a plan in October to strengthen fundraising, both from traditional sources and new sources of income.

The overspending problem was first identified in 2005. Between 2001 and 2004, the cumulative over-expenditure was $11.2 million and net assets in unrestricted funds had declined from $16.4 million at the end of 2000 to $5.2 million at the end of 2004.

Factors accounting for the overspending, in addition to the problem of segregated budgets, include a long-term decline in undesignated giving, a declining return on investments, and rising costs for program and administration, particularly for health, property and liability insurance.

During the March 31-April 4 meeting, Andrea Hatcher, division treasurer, reported that undesignated giving was down by $1.4 million, or 7.6 percent, in 2005 and that operating revenues had dropped by 4.4 percent, or $1.25 million.

”Every channel of giving was down from 2004,” she told directors.

Total operating revenue for 2005 was $27.8 million. The operating deficit for 2005 was $8.02 million, compared to a deficit of $6.49 million in 2004.

As a response to financial needs, the division will make more giving opportunities available during the May 4-7 Women’s Assembly in Anaheim, Calif. It will provide more interpretive materials and will work with conference finance committees to analyze giving trends, Hatcher reported.

Strategic responses will include the establishment of fund development focus groups and provision for online giving opportunities.

Since last October, an internal review of 600 endowment funds has been conducted and a comprehensive data base on properties established, according to Hatcher.

*Bloom is a United Methodist News Service news writer based in New York.

News media contact: Linda Bloom, New York, (646) 369-3759 or newsdesk@umcom.org.